Search

 

Cablegate: 2nd China-U.S. Maritime Consultative Meeting

VZCZCXRO8722
RR RUEHCN RUEHGH
DE RUEHGH #0762/01 3331113
ZNR UUUUU ZZH
R 291113Z NOV 07
FM AMCONSUL SHANGHAI
TO RUEHC/SECSTATE WASHDC 6478
RULSDMK/DEPT OF TRANSPORTATION WASHINGTON DC
INFO RUEHBJ/AMEMBASSY BEIJING 1546
RUEHSH/AMCONSUL SHENYANG 0974
RUEHCN/AMCONSUL CHENGDU 0974
RUEHIN/AIT TAIPEI 0793
RUEHHK/AMCONSUL HONG KONG 1099
RUEHKO/AMEMBASSY TOKYO 0228
RUEHUL/AMEMBASSY SEOUL 0139
RUEHGP/AMEMBASSY SINGAPORE 0092
RHEHAAA/NSC WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHGH/AMCONSUL SHANGHAI 6993

UNCLAS SECTION 01 OF 07 SHANGHAI 000762

SIPDIS

SENSITIVE
SIPDIS

STATE FOR EAP/CM, EB AND E
DOT FOR MARAD
TREASURY FOR AMB. HOLMER, WRIGHT, TSMITH
USDOC FOR ITA MAC DAS KASOFF, MELCHER, MCQUEEN
NSC FOR HUBBARD AND TONG

E.O. 12958: N/A
TAGS: EWWT ELTN CVIS EINV ETRD OVIP CH
SUBJECT: 2ND CHINA-U.S. MARITIME CONSULTATIVE MEETING

This cable is Sensitive But Unclassified (SBU) and for official
use only. Not for transmission outside USG channels.

1. (SBU) Summary: On November 28 and 29, members of the U.S.
Maritime Administration delegation led by Maritime Administrator
Sean Connaughton met with the Chinese Ministry of Communications
delegation led by Vice Minister Xu Zuyuan in Shanghai. The two
sides discussed a wide range of bilateral maritime issues,
including the implementation of the bilateral maritime
agreement. The U.S. side raised the issue of a pending wholly
foreign-owned enterprise (WFOE) application of Matson
Navigation, tonnage dues on U.S.-owned foreign registered
vessels, and the U.S.-China Maritime Agreement treatment of
non-vessel operating common carriers (NVOCCs). The Chinese side
raised visa issues regarding Chinese seafarers, U.S. Customs
regulations on the transmission of manifest information,
regulations at U.S. ports regarding environmental protection,
financial responsibility of U.S. NVOCCs doing business in China,
and inland transportation efficiency in the U.S. Both sides
exchanged views on container shipping of bulk grains and
competition policy for ocean carriers. The two sides agreed on
the minutes of the meeting and signed the following text. End
Summary

Begin Text

----------

AGREED MINUTES OF THE 2ND CHINA-U.S. MARITIME CONSULTATIVE
MEETING

1. Delegations from the People's Republic of China, led by the
Ministry of Communications, and the United States, led by the
Maritime Administration met in Shanghai on November 28th and
29th, 2007, to discuss the implementation of the bilateral
maritime agreement and other related matters in the maritime
service sector. The consultative meeting was held in a friendly
atmosphere and was pragmatic, frank and fruitful. The Chinese
delegation was led by Vice Minister Xu Zuyuan, and the United
States' delegation was led by Maritime Administrator Sean T.
Connaughton. Full delegation lists are attached.

2. Vice Minister Xu and Maritime Administrator Connaughton
placed a high value on the role played by the bilateral maritime
agreement in strengthening bilateral maritime cooperation and
promoting bilateral trade. Both sides expressed satisfaction on
the implementation of the bilateral maritime agreement. They
expressed the view that China and the U.S. are not only two
important trade partners, but also big shipping countries. Since
both countries are Category A members of the IMO Council, both
sides have the responsibility to strengthen cooperation in
maintaining safety, increasing efficiency of maritime services
and protecting the environment. Both sides agreed to maintain
the annual consultation mechanism with a positive and
cooperative attitude, to further promote bilateral maritime
relations.

3. Both sides introduced current developments in their shipping
policies and other information on maritime-related fields. The
Chinese side explained the measures they are adopting for energy
saving and environmental protection, and gave an introduction to
their port development plan, inland shipping development,
endeavors for promoting the development of private shipping
enterprises, and measures to strengthen port and shipping safety
and security. The U.S. side explained their goals for
infrastructure investment and congestion mitigation. The U.S.
side also expressed their interests in new Arctic shipping
routes, the expansion of the Panama Canal, the shortage of
seafarers and protection of the environment. The U.S. side
explained new legislation for container security. Both sides
expressed the view that there are many issues and concerns in
the maritime field which merit further communication between the
two sides.


SHANGHAI 00000762 002 OF 007


4. The U.S. side expressed their strong interests in obtaining
WFOE status for Matson Navigation, a new entrant in the trade
between China and the U.S. In view of the cooperative spirit of
U.S./China maritime relations and obligations of the bilateral
maritime agreement, the U.S. side requested the Chinese side to
approve the application before December 31, 2007. The Chinese
side replied that they recognized the importance of this matter
to the bilateral relationship and stated that they would take
positive steps to process the application.

5. The Chinese side held the view that the visa system in the
U.S. creates many difficulties and inconveniences for Chinese
seafarers to enter U.S. ports and asked the U.S. side to take
into consideration the special nature of the shipping business
and seafarers and to extend the validity of the seafarers' visas
to five years on a reciprocal basis. The U.S. side explained
U.S. visa policy and agreed to contact the competent U.S.
authority about measures to address these concerns as part of a
resolution of broader visa issues between the two countries. The
Chinese side holds the view that this issue should not be linked
with broader visa issues and should be resolved on a reciprocal
basis.

6. In accordance with Article 1 paragraph 2 and Article 6
paragraph 2 of the bilateral maritime agreement, the U.S. side
asked the Chinese side to charge the same tonnage dues on U.S.
owned foreign registered vessels as on vessels registered in the
U.S. The Chinese side explained that they had fully implemented
the provisions of paragraph 2 of Article 6 of the bilateral
maritime agreement. The Chinese side gave further explanation on
their tonnage dues policy which allowed favorable treatment
relating to levying of tonnage dues on a vessel at Chinese ports
if the vessel flies the flag of a country whose government had
entered into a bilateral maritime agreement or other related
agreement on favorable taxation. The Chinese side further
explained that vessels flying the flag of third countries and
owned or operated by U.S. shipping companies enjoy the same
treatment relating to levying of tonnage dues as those of
Chinese shipping companies flying the flag of third countries.
The U.S. side requested further information from the Chinese
side on this matter. The Chinese side agreed to provide the
relevant information.

7. The Chinese side pointed out that in accordance with U.S.
regulations, when a vessel carries cargo loaded in U.S. ports
and bound for China, complete manifest information and shipper's
declaration must be submitted to U.S. Customs and Border
Protection before the vessel's departure. The Chinese side noted
that China is on a list of countries subject to this
differentiated treatment and asked the U.S. side to eliminate
the differentiated treatment. The Chinese side asked the U.S.
side to eliminate this differentiated treatment problem in order
to provide more convenient, fair maritime transport for the
bilateral trade. The U.S. side expressed their willingness to
provide further information on the legislative background and
implementation status of this measure and would give the Chinese
side further explanation on this regulation.

8. Both sides exchanged viewpoints on the transportation of bulk
grains in containers in the China-U.S. trade and expressed their
willingness to communicate with their respective competent
authorities to explore ways to increase container transport
efficiency and alleviate container imbalance. Both sides
exchanged views on alleviating congestion in U.S. inland
transport networks.

9. The Chinese side raised the issue of inconsistency of
environmental protection standards in different states of the
U.S., which was inconvenient and increased operating costs for
carriers. The U.S. side explained that U.S. law gives states
considerable authority to set their own environmental standards.
In order to avoid unilateral action and to implement uniform
international standards, both sides recognize the importance of
close cooperation in the IMO framework.

SHANGHAI 00000762 003 OF 007

10. The U.S side raised the issue of problems U.S. NVOCCs are
experiencing in China. The U.S. side proposed that the bond
required by the FMC should extend to China cross trades as well
as the bilateral trade. The Chinese side held the view that this
issue involves an adjustment of the arrangement between the two
sides reached in 2003. The Chinese side indicated that they had
fully implemented the Memorandum of Consultations signed on
December 8th, 2003 by providing facilitation to qualified U.S.
NVOCCs to conduct their business in China. The Chinese side also
pointed out that due to the change of the exchange rate between
the Chinese Yuan to U.S. dollar, the amount of financial
responsibility in U.S. dollars (which used to be equivalent to
800 thousand RMB) should also be adjusted accordingly. The U.S.
side stated that they would provide a written proposal to
address these issues. Both sides agreed to further exchange
ideas on the above mentioned issues.

11. Both sides exchanged views on the competition policy for
ocean carriers. Both sides emphasized the importance of
consistency in international competition policy in order to
avoid any negative effects on the shipping industry due to
conflicts of law. Both sides noted that at present there are no
plans to change the competition laws in either country which
grant anti-trust immunity for ocean carriers.

12. Both sides listened to the views of shipping company
representatives of both countries, and both sides expressed
their willingness to keep open communication with the industry.

13. Both sides agreed to hold the 3rd bilateral Maritime
Consultative Meeting in the U.S. in 2008.

DONE on November 29th, 2007 in Shanghai, in the Chinese and
English languages.

Xu Zuyuan

For the Ministry of Communications

People's Republic of China

Sean T. Connaughton

For the Department of Transportation

United States of America

End text.

In the above text, the acronym "IMO" refers to International
Maritime Organization; and "FMC" refers to Federal Maritime
Commission.

LIST OF CHINESE MARITIME DELEGATION

-----------------------------------

Xu Zuyuan Vice Minister,

Ministry of Communications

Song Dexing Director General

Department of Water Transport

Ministry of Communications


SHANGHAI 00000762 004 OF 007


Zhang Shouguo Deputy Director General

Department of Water Transport

Ministry of Communications

Xiong Wei Director

Department of Water Transport

Ministry of Communications

Gao Haiyun Deputy Director

Department of Water Transport

Ministry of Communications

Li Juguang Officer

Foreign Affairs Office

Ministry of Communications

Wang Lu Deputy Director

Maritime Administration Bureau

Ministry of Communications

Teng Chen Attache

Department of America and Oceanic Affairs

Ministry of Foreign Affairs


OBSERVERS


---------

Xu Guibin Executive Vice Chairman

China Shipowners' Association

Wang Mingsheng Deputy Director

International Affairs Division

China Shipowners' Association

Yang Ting Deputy General Manager


SHANGHAI 00000762 005 OF 007


Transportation Management Department

China Ocean Shipping (Group) Co.

Chen Bin Deputy Manager

Transportation Management Department

China Ocean Shipping (Group) Co.

Zhu Tao Deputy Manager

COSCO Container Lines Co.

Zhao Yingtao General Manager

Transportation Management Department

China Shipping (Group) Co.

Zhao Hongzhou Deputy General Manager

China Shipping Container Lines Co.

Gu Jinsong General Manager

Commercial Department

China Shipping Container Lines Co.

Cai Ying Deputy General Manager

Transportation Management Department

Sinotrans (Group) Co.


LIST OF U.S. MARITIME DELEGATION

--------------------------------

Sean Connaughton Maritime Administrator

Maritime Administration

Department of Transportation

Bruce Carlton Assistant Maritime Administrator

Maritime Administration

Department of Transportation

Greg Hall Director

SHANGHAI 00000762 006 OF 007

Office of International Activities

Maritime Administration

Department of Transportation

Brian Varney International Economist

Maritime Administration

Department of Transportation

Christopher Moore Special Assistant

Maritime Administration

Department of Transportation

Stephen Miller Team Leader

Office of Transportation Policy

Bureau of Economic and Business Affairs

Department of State

Michael Layne Economic Officer

U.S. Consulate General Shanghai

Department of State

Kamal Latham Economic Officer

U.S. Embassy Beijing

Department of State

OBSERVERS

---------

Kevin O'Rourke Senior Vice President and General Counsel

Matson Navigation Company

David Hoppes Senior Vice President-Ocean Services

Matson Navigation Company

Qiang Gao Managing Director Asia

China Chief Representative

Matson Navigation Company

SHANGHAI 00000762 007 OF 007

William Chan Vice President & Managing Director North
China

American President Lines

Dan Ryan President, Greater China

American President Lines

Charles Wellins Maersk Lines

Vice President - Sales

Greater China Area

Maersk Hong Kong Ltd

Gareth Luk Maersk Lines

Deputy General Manager for Import

Greater China

Maersk Beijing
JARRETT

© Scoop Media

 
 
 
World Headlines

 

UN Rights Office On Syria: The “Monstrous Annihilation” Of Eastern Ghouta

Since the Syrian Government and their allies escalated their offensive against opposition-held Eastern Ghouta on 4 February, there have been more than 1,200 civilian casualties, including at least 346 killed and 878 injured, mostly in airstrikes hitting residential areas... Ninety-two of these civilian deaths allegedly occurred in just one 13-hour period on Monday. More>>

ALSO:

Cyclone Gita: 70% Of Tonga Population Affected

The full scale of destruction is beginning to emerge from Tonga in the aftermath of the severe tropical cyclone Gita. Around 50,000 people, or almost 70% of the country’s population, have been affected, a third of whom are children. More>>

ALSO:


Gita: Samoas Clean Up After Being Swamped By Cyclone

Apia in the wake of Gita Photo: Rudy Bartley The clean up is continuing in the two Samoas after Tropical Cyclone Gita hit on Saturday morning. More>>

ALSO:

Grand Coalition : Germany's two main political parties set to govern under Angela Merkel.

The liberal-conservative Christian Democratic Union (CDU) and the centre-left Social Democrats (SPD) negotiated through the night in a marathon final push to nail down an agreement. More>>


80 Passengers: Kiribati Ferry Disaster

The United Nations Children’s Fund (UNICEF) and the World Health Organization (WHO) are working with the Government of Kiribati to support children, families and communities affected by the recent Butiraoi ferry disaster. More>>

ALSO:

Campbell On: the US demonising of Iran

Satan may not exist, but the Evil One has always been a handy tool for priests and politicians alike. Currently, Iran is the latest bogey conjured up by Washington to (a) justify its foreign policy interventions and (b) distract attention from its foreign policy failures. More

ALSO: