The Reagan administration, which has sent out conflicting signals about its antitrust policy, is so split over a bill to grant sweeping antitrust immunity to the U.S.-flag merchant marine that it will not take a public position on the legislation, government sources said yesterday.
No administration representative is scheduled to testify in Senate hearings that began yesterday on bills that would give operators of U.S.-registered vessels that carry goods the broadest antitrust exemptions since the 1916 Shipping Act and also would allow them to take part in closed international rate-fixing conferences.
Sources in Congress and the administration confirmed reports in the maritime trade press that the Department of Transportation favors the legislation but the Justice Department opposes it. "It's possible that an administration position could be articulated in the next couple of days, but right now there isn't one," a high-ranking Justice Department official said.
The merchant marine subcommittee of the Senate Commerce Committee is considering two bills that would rewrite this country's maritime freight regulations. The broader bill, introduced by subcommittee chairman Slade Gorton (R-Wash.), would in his words grant "complete antitrust immunity" to U.S.-flag carriers taking part in international rate-fixing conferences.
"This is not only consistent with international shipping practice but would also remove a constant irritant between the United States and our foreign trading partners," Gorton said.
Only nine companies still operate U.S.-flag merchant ships in international commerce, and their share of U.S. international trade has dwindled steadily to less than 5 percent. The companies long have argued that among the world's merchant fleets they alone are restricted by their government's antitrust policies, and Gorton agrees.
Congress intended in 1916 to "insulate" the merchant fleet from antitrust constraints, he said, and his bill would override Supreme Court decisions that have "stood that policy on its head." His bill is cosponsored by Sens. Ted Stevens (R-Alaska), Robert W. Kasten Jr. (R-Wis.), Bob Packwood (R-Ore.) and Daniel K. Inouye (D-Hawaii).
Retired Navy admiral James L. Holloway III, president of the Council of American Flag Ship Operators, expressed that group's strong support for the bill, as expected. He said that "clear antitrust immunity would be a major step toward the administration's goal of revitalizing our maritime industry by removing a significant handicap created by uneven enforcement."
The Reagan administration has called for revitalizing of the U.S. merchant marine, but has not yet said what policies it will propose to achieve that goal. An interdepartmental committee has been established to develop a program, and Transportation Secretary Drew Lewis has said only that he favors "regulatory reform legislation."
Alan Green Jr., chairman of the Federal Maritime Commission, stopped short of endorsing full antitrust immunity, but he said he could think of no other country that subjects its merchant fleet to the same regulations imposed on American carriers and added, "I don't see why Americans should be penalized for being American."
He told the subcommittee, "Many of our trading partners have economic systems which are based on the premise that competition is wasteful and to be avoided. It is naive to believe that the United States can impose its antitrust laws on such nations."
International ocean freight rates generally are controlled by conferences, or groups, of shipping lines. American carriers have been permitted to take part in open conferences, which any company may join, but Gorton's bill would permit them to also participate in closed conferences, in which members pool their resources to keep out new competitors.