[EN-BIZ] GSF : Shippers Seeking Fair Trading

ASC says Asia is last battleground after EU repealed block exemption to anti-competition laws, reports VINCENT WEE

A YEAR down the track from the repeal of the block exemption to anti-competition laws in the European Union (EU), the spotlight now turns to Asia, which Asian Shippers' Council (ASC) chairman John Lu says is the last battleground in the fight for fair shipping practices.

Mr Lu was speaking after the recent Global Shippers' Forum (GSF) meeting in London, where the issue of maritime reform was among the hot topics.

'Reforms enacted in Europe and North America have brought about a more market-based environment,' he said.

A similar environment must follow in Asia and 'efforts will be directed to realise this goal', GSF noted in its post-meeting release.

ASC says that it is at the forefront of a global campaign to bring about maritime reform in Asia, managing the initiatives and providing guidance on how reforms may best be accomplished.

As net exporters, Asian countries have much to gain from a market-based environment, yet regional governments have allowed cartels to operate unchecked. 'The policy of appeasement towards liner cartels is hurting shippers and damaging economies,' Mr Lu said.

For example, the convenor for Greater China region, Cai Jiaxiang, revealed the massive scale of the costs being borne by shippers in China alone.

'In 2008, China paid some 50 billion yuan (US$7.3 billion, S$10.2 billion) in surcharges and terminal handling charges on merchandise exports of US$1.43 trillion,' said Mr Cai.

'This will only increase. With its sizeable volume, every dollar increase in surcharges on Chinese shippers would translate into many more dollars for shipping lines than it would elsewhere.'

Mr Lu said: 'Liberalisation and regulatory reform are the key drivers of global trade and growth. Protectionism of any kind is counter-productive. The way forward to sustained and balanced global economic growth depends on open and competitive transport markets.'

ASC says that the situation has worsened for Asian shippers since the EU outlawed conferences and cartels last October.

More surcharges at higher rates have been imposed, bringing the total number to over 20 in some countries, ASC said.

According to Mr Lu, Singapore failed to take the lead in Asia by continuing to maintain a block exemption order from Singapore's competition law for liner conferences, when it could have responded to the EU's move and brought itself in line with global trade norms.

European Shippers' Council secretary-general Nicolette van der Jagt emphasised that Asia would remain the focal point of the GSF campaign for regulatory reform in the liner shipping sector.

'Therefore, it is important that the GSF supports regulatory reform in Asia, outlawing rate-making cartels and urging governments in Asia and elsewhere to initiate reforms which are in line with competitive global practices such as those that now exist in Europe,' she said.

Source : Business Times, 28.10.09.