The wall round American waters for Flemish dredgers

14th June 2013, Comments 0 comments

European trade ministers meet today to discuss Euro Comissioner Karel De Gucht’s mandate to negotiate a free trade agreement with the US. Many European countries are keen to exclude the audiovisual sector from this agreement, but it is feared that the Americans may then refuse to discuss public procurement contracts. Today non-US companies are mainly excluded from US public contracts. A key obstacle for European companies keen to do business across the Atlantic is the Jones Act, a protectionist act introduced in 1920 to protect the scrupulous American maritime sector. The act’s prohibition of foreign players to engage in large-scale actitivies such as dredging has a negative effect on major Flemish dredging companies like DEME and Jan De Nul, who are active in practically every corner of the globe except that much in the lucrative US market. According to the Jones Act ships may only operate under the American flag when in US waters. The Buy American Act, which dates from the interbellum period, also serves as an obstacle for many Flemish companies as it allows discrimination against foreign companies in public procurement projects. Europe now hopes the trade agreements will level the playing field for its companies. Most of Flanders’ interests in the US are focused in the chemical, biotechnological, interior design, ICT and textile industries and, to a lesser degree, environmental service providers and liquor and food companies. America currently serves as the region’s fifth biggest export destination and almost 6% of Flemish exports or 17.09 billion euros were destined for the US last year. The ‘classic’ import levies between Europe and the US are rather low at 4%. Companies who wish to do business with the US struggle with less obvious barriers such as rules that apply to some products but not to others. The European Commission estimates that non-tariff restrictions amount to 10 to 20 percent on product prices, which as a matter of fact exceed the ‘real’ tariffs.

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