The OECD Shipbuilding Agreement and Legislation in the 105th Congress

In December 1994, the United States, the European Union, Japan, Korea, and Norway signed an agreement on shipbuilding that was negotiated under the Organization for Economic Cooperation and Development (OECD). The agreement prohibits most subsidies for shipbuilding, limits financing assistance, allows actions against injurious pricing, and establishes a dispute resolution process. Although the United States was the lead proponent of the agreement, it is the only signatory that has not ratified the agreement. U.S. maritime industries are split. The largest shipyards oppose the agreement without modifications such as a longer phase-out of the U.S. vessel financing guarantee program. Mid-level shipyards and vessel operators support the agreement, primarily for its provision to end most shipbuilding subsidies. Legislation to approve the agreement and make necessary statutory changes has been introduced in the 105th Congress.