Changes to US sea-trade law worry Bimco

PUBLISHED : Friday, 12 February, 1999, 12:00am
UPDATED : Friday, 12 February, 1999, 12:00am

The Baltic and International Maritime Council (Bimco) has urged the United States Senate to reject a draft revision of the US Carriage of Goods by Sea Act (Cogsa), which it claims encourages unilateralism in the conduct of international trade.

Bimco secretary-general Finn Frandsen, who has sent a statement to the US Senate protesting at the draft, said the draft jeopardised the international importance of the Hague and Hague-Visby Rules.

'The United States must honour its position as the world's largest trading nation, to act responsibly and actively to discourage unilateralism in the conduct of international trade,' he said.

He added that other countries might follow suit.

The draft revision is to be considered by Congress soon.

'In a worst-case scenario, the US initiative could be considered by other nations as a protectionist measure, which may conceivably lead to national- or regional-based counter-measures,' Mr Frandsen said.

This would result in greater fragmentation of international transport law to the ultimate detriment of commercial players and world trade.

While there were improvements in the act, some elements constituted a radical departure from the generally accepted structure of international maritime law.

The most significant negative element was the limitation on the right of commercial parties engaged in international maritime trade to contractually agree on the most appropriate venue and applicable law for the resolution of disputes, he said.

The freedom to choose foreign forums for dispute resolution was important to the international shipping community and to US shipping interests.

If US courts sought sole jurisdiction in all cases involving US interests, US business and industry might suffer negative consequences in the long term.

An estimated two-thirds of US trade was with countries that were signatories to the Hague-Visby Rules. That left open the possibility that those countries might take protective measures similar to those under consideration in the US, to the detriment of overall international commerce.

International trade would enjoy noticeable benefits from a US alignment of its legal and commercial practices with those of its main trading partners, benefits that would extend to the US itself.

The US had to uphold its role in the international business environment, particularly as a signatory to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

The Bimco is holding a seminar in Washington next Thursday and Friday which will include a discussion on the proposed revision of the Cogsa and the cornerstones of international maritime law relating to the carriage of goods by sea.