371 
CARGO SHARING 
The cargo sharing issue initially was circumvented in accordance 
with the traditional view on that subject, namely, that the United 
States disapproves of exercising direct governmental control over the 
routing of ‘“‘normal commercial cargoes” to assure equal access for 
U.S. flag vessels unless such cargoes are owned or financed by the 
government. This position, however, failed to recognize that Soviet- 
controlled cargoes, which all grain cargoes were to be, were not 
directed in the spirit of free enterprise, thus making application of 
traditional U.S. policy on cargo sharing unworkable. Ultimately, the 
President instructed that any understanding in the area of national 
flag cargo carriage should include a provision to the effect that imple- 
mentation of the understanding would be contingent on agreement 
to be reached between the two sides in an effective mechanism to 
ensure equal participation. This instruction altered traditional U.S. 
policy regarding cargo sharing, at least as far as the Soviet undertaking 
was concerned, and made the negotiation of a cargo sharing arrange- 
ment possible. 
An expression of agreement by both sides on the issues of equal 
access and equal sharing of cargoes was necessary prior to attaining 
a meaningful bilateral shipping agreement and to this end the US. 
delegation tabled an outline of the underlying principles it considered 
essential in this regard calling for the approximate equal participation 
in the trade between the two nations by their respective fleets, and 
the carriage of a substantial part of the reciprocal trade in the national 
flag vessels of the two countries. 
After discussing these principles each nation obligated itself to give 
equal access to the vessels of the other in the carriage of controlled 
cargoes moving between the two nations. The Soviet obligation to 
assure equal and substantial United States and Soviet carriage of 
Soviet-controlled imports of bulk cargoes was made subject to prior 
agreement by the parties on an acceptable rate structure. 
Article 7 of the Agreement and the relevant operating document 
(Annex III)codify this understanding as follows: 
While recognizing the policy of each Party concerning participa- 
tion of third flags in its trade, each party also recognizes the 
interest of the other in carrying a substantial part of its foreign 
trade in vessels of its own registry, and thus both Parties intend 
that their national flag vessels will each carry equal and substantial 
shares of the trade between the two nations in accordance with 
Annex III which is a part of this Agreement. 
Each Party undertakes to ensure that its controlleu cargo is 
directed in a manner which 
(i) provides to vessels under the flag of the other Party an 
accountable liner share and an accountable charter share equal 
in each category to those vessels under its flag, and which con- 
tinually maintains parity during each accounting period, and 
(ii) is consistent with the intention of the Parties that their 
national flag vessels will each carry not less that one-third of 
the bilateral cargoes. 
With agreement on the above one of the primary objectives of 
the U.S. negotiating position was achieved, namely, that U.S. flag 
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