361 
As of July 24, 1975, only nine nations had become contracting 
parties to the code.'® Officially, the code cannot enter into force 
until 6 months following the date when a minimum of 24 countries 
representing 25 percent of the world’s gross tonnage—18,226,166 
tons—have become “‘contracting parties” to the Convention. 
The United States finds the Code unacceptable and has already 
indicated that it does not intend to ratify it for two basic reasons: 
1. On substantive grounds, the Code would be harmful to U.S. 
commercial interests; it is inconsistent with our traditional regula- 
tory principles; it would impose additional cost burdens and ineffi- 
ciencies on the world ocean transport system; it is dubious that 
it would materially assist a majority of the developing countries; 
and finally it simply is not acceptable text from the standpoint 
of legal clarity. 
2. On procedural and political grounds, the United States con-: 
sidered it important to express its dissatisfaction with the results 
of the UNCTAD group system for negotiating an international 
convention, the inadequate time devoted to alternate 
proposals—especially some offered by the United States—the 
absence of any final review of the text by a legal drafting group 
as is customary in the elaboration of an international convention, 
and finally the possible harmful precedent of a weak U:S. position 
in this instance on subsequent negotiation in UNCTAD, and other 
U.N. bodies, for other codes that may be considered. 
The Soviets, on the other hand, have seemingly sought to gain 
potential political advantage with the less-developed countries in 
UNCTAD negotiations by lending their support to the code. 
POSSIBLE LEGISLATIVE SOLUTIONS 
The proliferation of predatory carriers operating in U.S. sealanes 
and charging rates on certain high-value commodities that may often 
be less than compensatory on a commercial cost basis poses a serious 
threat to the stability of United States and world shipping services. 
Rate-cutting practices are a continuing problem. In the late 1960's, 
turmoil existed in the North Atlantic trades. Malpractices were occur- 
ring and unwarranted rate reductions were being made. The advent 
of containerization only exacerbated the situation since it multiplied 
cargo carrying capacity beyond the needs of the trade and led to 
more rate-cutting than before. While the North Atlantic trades appear 
more stable today, the problem has since spread to the trans-Pacific 
trades. The overtonnaging in both regional trade areas leading to 
an overabundance of available cargo capacity has now been magnified 
by the entry into the trades of new Communist Bloc carriers compet- 
ing for cargoes. 
The stage has been set for shippers and carriers alike to resort 
to practices detrimental to ocean transportation in our trades. There 
are indications that rate-cutting practices of some carriers of between 
15These countries include: Bangladesh, Chile, Ethiopia, Ghana, Pakistan, Sri Lanka, Togo, The 
Gambia, and Venezuela representing only about 1.3 percent of the world’s tonnage. Several other 
countries—including Belgium, France, West Germany, and the U.S.S.R.—signed the code subject to 
ratification just before the deadline on June 30, 1975. The list oF signatories did not include a 
number of countries with large merchant fleets among which are: Japan, Norway, Sweden, the U-K. 
and the US. 
