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corresponding rate charged by national-flag carriers in the U.S. trades 
unless such rates could be justified on a commercial cost basis. 
Objections to the bill have been raised on the grounds that it 
might lead to higher rate levels because of the limitation placed upon 
competition: That it would aline rates at a given level and place 
the burden of justification on those carriers filing lower rates. It is 
feared that the direct impact of this legislation would likely fall on 
U.S. shippers and consumers if a special burden were placed on those 
filing lower rates. Moreover, it is said that the legislation, if applied 
broadly, could eliminate competition based on divergence of rates, 
thereby removing a barrier to higher rate levels and monopolistic 
controls. An added objection to S. 868, in its present form, maintains 
that it goes further than necessary to deal with the problem of 
third-flag carriers and places the United States in potential violation 
of certain obligations under its Friendship, Commerce, and Navigation 
Treaties. 
It is not disputed that the primary purpose of the bill in seeking 
to eliminate predatory rate practices in the U.S. foreign trades is 
well motivated and laudable, since it is generally agreed that these 
practices pose a serious threat and are leading to an increasingly 
troublesome situation in the international waterborne commerce of 
the United States. While the Commission strongly supports legislation 
which meets the objectives of S. 868, it feels that amendments should 
be made to the proposed legislation in order that the level of rates 
will be tied to the conference system; the proven stabilizer in interna- 
tional trade. 
Another suggested approach to deal with the problems created by 
non-national-flag carriers operating in U.S. sealanes might be to at- 
tempt to resolve the issues by means of a rulemaking procedure con- 
ducted by the Federal Maritime Commission in which all parties could 
participate. 
Finally, a solution might be sought in the acceptance of an interna- 
tional convention conceived along the lines of the ““Code of Conduct 
for Liner Conferences” proposed and endorsed by the less-developed 
countries. However, it is unlikely that this Convention will be adopted 
either in its present form or in the foreseeable future. Certainly, 
the code as it now stands would require extensive modification and 
clarification in order to serve as a workable basis for international 
shipping relations. In view of the wide divergence of opinion exposed 
by the recent UNCTAD negotiations, it seems unlikely that a conven- 
tion could be drafted: that would be acceptable to a broad enough 
segment of the international trade community to be effective and 
enforceable. 
