October 18, 2011 / 12:27 AM / 6 years ago

Canadian ports compete fairly for U.S. cargo: trade minister

WASHINGTON (Reuters) - Canada's new international trade minister vowed on Monday to defend Canadian interests in a U.S. investigation into why ports in British Columbia are luring U.S.-bound container traffic away from American ports.

Ed Fast, in his first official visit to Washington, said he told U.S. Trade Representative Ron Kirk that any protectionist measures would hurt both the U.S. and Canadian economies.

The U.S. Federal Maritime Commission earlier this month decided to launch an inquiry into disparities that are driving U.S.-bound containers from Asia to Canadian and Mexican ports. A key focus of the study is on the Canadian ports of Prince Rupert and Vancouver, which are luring an increasing share of container traffic away from American West coast ports.

The containers are being shipped by rail into the United States and according to some analysts, arrive at Midwest destinations days faster than via Long Beach, California,

"We will be standing up for Canadians, we will be standing up for Canadian businesses and Canadian ports," Fast told reporters at the Canadian Embassy after his meeting with Kirk.

"We are committed to making our case, a very strong case, that any additional barriers to trade are hurtful to both of our economies."

Fast said the Canadian ports are competing fairly. They do not charge a harbor tax, as U.S. ports do, and that the Canadian ports have been modernized with $1.4 billion in new investments for road and rail connections.

"We're also going to impress upon our counterparts in the United States that what Canada has done is that it has invested in its ports," Fast said. "We operate on a level playing field. We have competitive advantages that we utilize to attract freight to our ports. We believe that there is no case to be made that this is unfair competition in any way."

Federal Maritime Commission Chairman Richard Lidinsky said in the October 5 decision that the study would consider the effects of the harbor tax and other considerations.

The study was first requested by U.S. senators Patty Murray and Maria Cantwell of Washington and eight other lawmakers, who said the harbor maintenance tax could be reducing U.S. competitiveness in the face of new West Coast ports in Canada and Mexico.

Some lawmakers have suggested the tax be imposed on container cargoes entering the United States via Canadian or Mexican ports in order to level the playing field.

"Canadian and Mexican ports are free to compete with U.S. ports for U.S. cargo. But they should do so on a playing field that is not artificially tilted by governments' policies. So the primary question is: are we handicapping our own ports in international competition?" Lidinsky said in a statement announcing the inquiry.

Reporting by David Lawder; editing by Andre Grenon

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