Report to the Chairman, Committee on Merchant Marine and Fisheries House of Representatives: Economic Effects of Cargo Preference Laws
GENERAL ACCOUNTING OFFICE WASHINGTON DC WASHINGTON DC United States
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At your request, we have analyzed the dependency of the U.S.-flag merchant fleet on cargo preference laws, the economic effects of cargo preference, and the effect of eliminating the preference requirement for Public Law No. 480 Food for Peace cargo. We looked at agencies that provide government cargo shipped on foreign trade routes to estimate how much of that cargo that now travels on U.S. -flag ships would travel on foreign-flag ships in the absence of cargo preference. On the basis of that analysis, we estimated the number of ships and workers used to carry the cargo U.S. -flag ships carry because of preference laws and the additional shipping cost to the government due to cargo preference. We also estimated how much of the increased use of U.S.-flag ships and workers and increased government shipping costs due to cargo preference results from the preference requirement for P.L. 480 cargo. Our analysis is based on 1980 data and our numerical estimates apply to that year only.