Exporters in protest over shipping cartel

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SHIPOWNERS have been accused of putting pressure on the European Union to maintain their Atlantic cartel.

Shippers, concerned by rising prices and the lack of competition on the Atlantic routes, took their case to the European Commission. But now they claim that shipowners have lobbied governments to block investigations and give approval to what shippers regard as restrictive practices.

A resolution put forward by the Belgian government would, in effect, sanction the Trans-Atlantic Agreement, a cartel established in 1992 by large shipping lines operating liner services between Europe and the US, they said.

The move would 'usurp the exclusive competence of the Commission to interpret competition law,' according to Sir Christopher Prout, leader of the Conservative group in the European Parliament.

The British Shippers Council has complained to the Commission on behalf of companies such as ICI, United Distillers and Imperial Tobacco. It says that the TAA imposed huge price increases on exporters in 1993 and that more are planned for next year. This poses 'a threat to business and to jobs at a time of high unemployment', a briefing paper prepared by the Freight Transport Association said.

The BSC claims that the cartel infringes EU competition policy in three ways. It fixes rates and prices in a way that ignores market forces. It keeps some shipping capacity out of the market to keep rates high. And it extends price fixing into the market for road haulage.

The Commission in Brussels is about to announce a statement of objection to the TAA, according to sources among the shippers. But they say that the Belgian government, under pressure from the shipping industry, has put together a resolution that would pre-empt the Commission's inquiries. Belgium currently holds the presidency of the EU, and it will chair a forthcoming meeting of the Transport Council.

The FTA claims that a resolution passed by the Transport Council would bring to an end investigations into the Atlantic price-fixing arrangements and a parallel scheme in the Far East. The shipowners, led by Sir Jeffrey Sterling, say that the arrangements are necessary to assure the survival of the industry.