THE CARGO preference bill is back--and, as always, it is pure poison ivy. It says that a certain proportion of all bulk cargoes moving by sea in or out of American ports must be carried in American- flag ships. Because most American ship builders and owners have long since lost control of their costs, they survive only where they can get this kind of legislative protection. That's also why most American-owned ships are registered in other countries, avoiding the extremely expensive requirements for doing business with the tight alliance of overpriced American shipyards, owners and maritime unions. This triangular alliance keeps trying to get Congress to force American traders to use its ships despite the fact that they are uncompetitive by a very wide margin.
Cargo preference would provide still another subsidy to an industry that is already one of the most heavily subsidized in the country. There are fat subsidies to build ships, fat subsidies to run them, and fat subsidies to train personnel. This year the total will run well over half a billion dollars. The Reagan administration is currently trying to cut off at least the construction subsidies. This threat evokes understandable anxiety within the maritime industry, which fears worse to come and has revived the cargo preference bill in an attempt to get a lock on a fixed share of the shipping business, regardless of the prices that it charges.
What better solution--from the industry's point of view--than to augment those vulnerable federal subsidies with a much larger but less visible one, paid by American consumers through higher shipping costs? The American Petroleum Institute, representing the oil companies, says that by the time the legislation became fully effective around the year 2000, it would add perhaps $29 billion a year to the country's oil bill. That is not a disinterested estimate, but it is fair warning of the magnitude of the price tag attached to this legislation.
The maritime lobby argues that these lavish multiple subsidies are necessary because, in time of war, the military might need the ships. To the very limited extent to which the argument is valid, any subsidy-- new or old--ought to appear explicit in each year's federal budget where Congress can watch it and challenge it. That is precisely the kind of scrutiny that the cargo preference bill is designed to avoid.