1. The Law of the Sea Convention and US
Policy
On October 7, 1994, President Clinton transmitted
to the Senate the 1982 United Nations Convention on the Law of the
Sea and the 1994 Agreement relating to the Implementation of Part
XI of the United Nations Convention. The package was referred to
the Senate Committee on Foreign Relations. On November 16, 1994,
the U.N. Law of the Sea Convention entered into force but without
accession by the United States. The 1994 Agreement entered into
force on July 28, 1996, again without US ratification.
The United States had provisional membership in the International
Seabed Authority (ISA) and its organs and bodies through November
16, 1998. The opportunity for provisional membership, providing
time for adherence to the convention and agreement, ended on November
16. Since the Senate had not given its advice and consent to US
adherence, the President could not bring those documents into force
for the United States. Since November 16, 1998, the United States
has observer status at the ISA.
The major part of the 1982 Law of the Sea Convention had been supported
by US Administrations, beginning with President Reagan, as fulfilling
US interests in having a comprehensive legal framework relating
to competing uses of the world's oceans. However, the United States
and many industrialized countries found some of the provisions relating
to deep seabed mining in Part XI and Annexes III and IV of the Convention
contrary to their interests and would not sign or act to ratify
the Convention. Among the unacceptable elements were a decision-making
process in the ISA Council and Assembly that would not give the
United States or other Western industrialized countries influence
commensurate with their interests; "Review Conference" provisions
that would allow Convention amendments to enter into force without
express US approval; stipulations relating to mandatory transfer
of private technology; provisions that would deter rather than promote
future development of deep seabed mineral resources by incorporating
economic principles inconsistent with free market philosophy; and
the absence of assured access to future deep seabed mineral resources.
The Clinton Administration maintains that the provisions of the
1994 Agreement and Annex correct the objectionable elements in the
Convention on deep seabed issues.
A number of questions face the Senate as it considers the Convention/Agreement
package. Does the Agreement sufficiently resolve opposing concerns
expressed above about the deep seabed mining provisions? Are the
compulsory dispute settlement provisions and the US declaration
acceptable to the Senate? What is the impact of US adherence on
current US statutes? What changes must be made by legislation? What
precedent does US acceptance of the Convention/Agreement definition
of the common heritage of mankind concept establish? Were the provisional
application procedures used for the 1994 Agreement a good or bad
precedent for the US treaty process? What is the nature of US commitments
undertaken in decisions of the ISA Council? Should Congress have
a role and under what circumstances? What authority should Congress
exert over the expenses of another international organization—the
ISA?
MOST RECENT DEVELOPMENTS
The 106th Congress continued without consideration of US adherence
to the 1982 UN Law of the Sea Convention and 1994 Agreement, which
remain pending in the Senate Committee on Foreign Relations. US
provisional membership in the International Seabed Authority (ISA)
and its bodies ended on November 16, 1998. The United States participates
in meetings of the ISA as an observer.
BACKGROUND AND ANALYSIS
The UN Convention on the Law of the Sea, which was open for signature
between December 1982 and December 1984, established a legal regime
governing activities on, over, and under the world's oceans. The
Convention resulted from the third UN Conference on the Law of the
Sea, which met for a total of 93 weeks between December 1973 and
December 1982. The United States and other industrialized countries,
however, while supporting most of the treaty, did not sign the Convention
or announced they could not ratify the Convention without important
changes to the parts that dealt with deep seabed resources beyond
national jurisdiction. In 1990, UN Secretary-general Javier Perez
de Cuellar initiated consultations among interested governments
aimed at achieving universal participation in the Convention. Since
late 1992, pressures mounted to revise or amend what were viewed
as unacceptable parts of the Convention. Factors contributing to
this renewed pressure included the desire for universal participation
in a convention that in most respects was acceptable worldwide,
improvements in the international political climate, changes in
economic ideology that meant greater acceptance of free market principles,
and the steady increase in the number of ratifications toward the
60 required to bring the convention into force.
In April 1993, the Clinton Administration announced it would actively
participate in these consultations on the outstanding issues in
the deep seabed portions of the Convention. On November 16, 1993,
receipt by the UN Secretary-general of the 60th instrument of ratification/accession
marked the start of the one-year waiting period after which the
Convention would enter into force. The consultations led to adoption,
on July 28, 1994, by the UN General Assembly (by a vote of 121 in
favor (including the United States) to 0 against, with 7 (Colombia,
Nicaragua, Panama, Peru, Russian Federation, Thailand, Venezuela)
abstentions and 36 nations absent) of Resolution 48/263, opening
for signature an Agreement relating to the Implementation of Part
XI of the United Nations Convention on the Law of the Sea. The Agreement
amended various seabed-related parts of the Convention.
On July 29, 1994, the United States joined 40 other countries and
the European Union at UN headquarters in signing that Agreement.
On October 7, 1994, President Clinton transmitted to the Senate
the 1982 UN Convention on the Law of the Sea and 1994 Agreement
relating to the Implementation of Part XI of the UN Convention (Treaty
Document 103-39). The package was referred to the Senate Committee
on Foreign Relations. On November 16, 1994, the UN Law of the Sea
Convention entered into force but without accession by the United
States. On July 28, 1996, the Agreement entered into force, but
without US ratification.
As of March 31, 2000, 132 entities (131 independent States and the
European Community) were parties to the 1982 Convention. At the
same time, 96 entities (including the Cook Islands) were parties
to the 1994 Agreement. Eight countries, formerly provisional members
of the ISA, became Observer states on November 16, 1998. They included
Bangladesh, Belarus, Canada, Qatar, Switzerland, Ukraine, United
Arab Emirates, and the United States. Current information on status
of the Convention and Agreement may be obtained from the UN web
page on the Internet at http://www.un.org/Depts/los.
A primary issue in 2000 arises in the absence of US ratification.
This country did not adhere to the convention/agreement package
by November 16, 1998, and thus no longer participates as a member
of the International Seabed Authority. It lost its seats in the
four bodies of the ISA. It remains up to the Senate to judge whether
the amendments offered in the Agreement sufficiently alter the direction
of the Convention's deep seabed mining provisions to make it acceptable
to those who oppose US ratification. At issue is whether the United
States will ever adhere to the Convention/Agreement package and
whether it is in the best US interests to remain outside the treaty
or to join it.
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2. The Maritime Security Program
The Maritime Security Program (MSP) is a national
defense sealift program that provides commercial assistance to ocean
ship operators, primarily container-ship operators. The MSP makes
ships and ship crews, and the inter-model transportation and communication
network of the ship operator, available for sealift to the Department
of Defense upon request. These ship services, if required, would
be compensated at commercial rates. A substantial portion of ship
crews for reserve ships for military sealift are drawn from the
trained and experienced ship crews associated with U.S. flag ships,
many of which are in the MSP. The MSP is funded from the civilian
side of the federal budget, rather than from the military side.
The MSP is administered by the Maritime Administration (MARAD) in
the US Department of Transportation, in consultation with the US
Department of Defense (DoD). The MSP program was established in
1996 to replace the Operating Differential Subsidy (ODS) program
that was established in 1936.
The MSP provides $2.1 million per ship per year through FY2005.
The MSP is authorized at $100 million each year through FY2005,
enough to fund 47 ships per year through the life of the program.
The program is subject to annual appropriations. The Clinton Administration
requested $97.650 million for the MSP for FY1999, and Congress enacted
that amount of funding. Forty-seven ships are in the MSP; 39 of
them are container-ships There are 57 privately owned, U.S. flags
container-ships in US foreign trade, none in foreign-to-foreign
trade, and 23 in domestic trade. All 47 ships qualified on the basis
of military usefulness. Ten companies have ships in the MSP.
U.S. flag container-ships transport 8.6% of US ocean-borne commercial
foreign trade, measured in tons, and 9.9% measured by value. The
U.S. operated container-ships fleet is significantly larger when
foreign-flag ships controlled by US citizens are included. Since
1970, many nations have been increasing the size of their merchant
marine as a means of projecting visibility and earning hard currency.
One key rationale for the commercial assistance funding in the MSP
is to assure a continuing presence of U.S. flag ships in international
trade. The key rationale for the MSP is to assure, in the event
of a national defense need, the availability of an adequate number
of ships, and trained and experienced ship personnel who are US
citizens to operate these and other ships. Some suggest that alternative
approaches to these goals would be preferable.
This report discusses the MSP in an international commercial context.
Maritime policies of other nations that may adversely affect the
U.S. flag container-ships industry could be addressed in international
negotiations. In such negotiations, the MSP may be an issue. A US
response to such objections in the past has been that: (1) the MSP
is a small program having a largely military objective; (2) the
United States already has some of the most market-based national
maritime policies among maritime countries; and (3) the United States
is ready to negotiate more market-based maritime policies as soon
as "a critical mass of countries" is willing to do the same.
The Maritime Security Program (MSP) is a national defense sealift
program that provides commercial assistance to ocean ship operators,
primarily container-ships operators.(1) A rationale for the commercial
assistance is to assure a continuing presence of U.S. flag ships
in international trade. Another rationale is to assure, in the event
of a national defense need, the availability of an adequate number
of trained and experienced ship personnel who are US citizens to
operate these and other ships.
This report discusses the MSP in an international commercial context.
Maritime policies of other nations may adversely affect the U.S.
flag container-ships industry. These policies could be addressed
in international negotiations.
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3. Commercial Fishing:
Economic Aid and Capacity Reduction
Both experience and economic models show that,
in the absence of enforceable access or catch restrictions, competition
among commercial fishermen results in an expansion of fishing capacity,
and resultant fishing effort, beyond the sustainable limits of the
fish population being pursued. The spiral of increasing effort and
diminishing returns (i.e., rent dissipation) has helped to fuel
increases in fish prices that reduce benefits to consumers and processors;
has shifted many fish populations toward smaller, younger fish that
typically command lower prices; and in many cases has reduced yields
far below achievable levels.
Congress has considered several approaches to address concerns about
overcapitalization and excess capacity in the fishing industry.
The economic aid and capacity reduction programs discussed in this
document are some possible approaches to reducing overcapitalization
and over-fishing Alternative approaches, such as community development
quotas and individual transferable quotas, seek to meet some of
the same objectives, but are not discussed in this report.
Although some US fisheries remain open to new entrants, access to
many fisheries is limited or restricted. If new entry to a fishery
is permitted, any capacity removed could be replaced or increased,
negating the effects of any capacity reduction scheme. Capacity
reduction in a limited access fishery may be feasible if vessels
or licenses that are removed cannot be replaced. However, without
measures to prevent upgrading (i.e., "capital stuffing")—increasing
the size or fishing power (i.e., efficiency or effectiveness) --
of remaining vessels, the benefits of capacity removal could again
be negated.
Bodies governing limited access fisheries at local, state, national,
and international levels have initiated various "buyback" or retirement
schemes to reduce over-capacity and the consequent over-fishing
The nature and scope of these programs have been as varied as the
fisheries they have covered. The common objective of vessel buybacks
or license retirement is the permanent withdrawal of effort (i.e.,
fishermen and their vessels) from a particular fishery. In most
cases, however, the reduction in the number of vessels or licenses
has had a relatively modest effect on fleet capacity, since the
first to accept buybacks are usually the oldest and least efficient
units.
Although sometimes conceived as a means for easing financial hardship
caused by reduced landings of fish, capacity reduction is more often
viewed as a measure to realign effort and eventually increase sustainable
catch levels. Unlike economic aid, however, capacity reduction aims
to provide long-term benefits to those choosing, or able, to remain
within the industry and may thus indirectly confer benefits to some
of the communities that these fisheries support.
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