AAPA Voices Tariff Concerns

Capitol Hill

Published Jul 19, 2018 6:06 PM by The Maritime Executive

On July 18, CEO of the American Association of Port Authorities (AAPA) Kurt Nagle testified before the U.S. Senate Finance Committee's Subcommittee on International Trade, Customs and Global Competitiveness noting the Association' concern about trade tariffs.

“Ports are concerned about potential trade sanctions that could result in significant losses of good paying U.S. trade-related jobs, including those in the seaport industry. Seaports are at the frontlines of the current uncertainties surrounding U.S. trade policy. It is important to recognize that international trade, both exports and imports, is good for American workers and our national economy,” said Nagle.

Recently, AAPA joined the U.S. Global Value Chain Coalition (USGVC). According to the USGVC, one in five American jobs are linked to exports and imports of goods and services, and millions of those jobs are tied to the global value chain. AAPA believes U.S. trade policy must take a comprehensive view of the millions of U.S. jobs related to trade and ensure that seaport and other trade-related employment are not negatively impacted by trade actions. In addition, the $155 million in planned investment by ports and their private-sector partners is at risk, as an uncertain trade environment creates concerns about making these sizable port-related investments.

Nagle also spoke in funding and border control issues. “To remain internationally competitive in today’s economy, America needs a coordinated, multimodal freight network that incorporates and leverages every mode of freight transportation, both on land and in the water,” said Nagle. “AAPA projects the seaport industry will require about $66 billion in infrastructure investments over the next decade, including nearly $34 billion for waterside projects, like deep-draft dredging of our harbors and channels, and about $32 billion for landside projects, like road and rail connectors to our ports.”

In Nagle’s remarks, he recommended that the best way to provide needed navigation maintenance funding is for Congress to adopt the long-term funding solution AAPA developed earlier this year. AAPA’s solution devotes 100 percent of the funds collected from shippers for the HMT while requiring no additional tax burden on the transportation industry or on taxpayers. This system assures a fair, equitable and reliable way to keep this part of America’s critical transportation system healthy.

In terms of increasing investments in landside freight movement infrastructure, particularly road and rail connections with ports, Nagle recommended the Senate adopt the House Appropriations Committee’s provision to mandate that one-third of FY 2019 BUILD/TIGER program grants be allocated to ports. He also asked Subcommittee members to support AAPA’s proposal to raise the multimodal caps on FAST Act programs so that multimodal port projects have resources to build connecting projects.

With regard to Customs and Border Protection (CBP) staffing shortages amid record increases in passenger and cargo volumes, Nagle suggested that hiring additional CBP officers at America’s seaports, rather than expecting the ports to pay for existing officers’ overtime, is a better solution. He explained that CBP’s Reimbursable Services Program, which allows seaports to enter into agreements to allow CBP to provide, but then charge for, additional services upon the request of stakeholders, is quite costly to ports and sets up an uneven playing field. While the transportation industry already pays user fees to support CBP inspection activities, the additional charges assessed in the Reimbursable Services Program creates competitive disadvantages to U.S. ports.

“Ports are often asked how the federal government can improve port performance,” said Nagle. “Fulfilling what has traditionally been a federal obligation to ensure sufficient CBP inspection activity is a key place to start.”