Friday, August 16, 2013

Arthur Laffer, please pick up the courtesy phone

A bevy of major shippers are finding a way to outflank the federal government’s Harbor Maintenance Tax, threatening thousands of jobs in the Puget Sound area and the lower Columbia River.
The strategy:  Go north.  Bypass the ports of Seattle, Tacoma, Everett and Portland,  unload cargoes in Prince Rupert or Vancouver in British Columbia, and then ship goods into the United States.
Which wouldn't be this;
Sens. Patty Murray and Maria Cantwell, D-Wash., along with Puget Sound maritime interests, are trying to head this off.
The two senators are introducing legislation that would replace the Harbor Tax with a Maritime Goods Movement User Fee, which would be levied on all cargoes coming to the United States from the Asia-Pacific market,  including those that enter North America via ports in Canada and Mexico. 
Because taxes never distorted behavior, everyone knows that;
Seattle and Tacoma have, over the last 12 years, declined from 18.4 percent of the West Coast container market to 15.2 percent.  Canadian ports have soared from 7.8 to 13.9 percent, with expansion that will allow Prince Rupert to take more cargoes than Seattle, Tacoma and Portland combined.
“Cargo traditionally handled by U.S. ports is being targeted by Canada and Mexico.  The shipping business is extremely competitive and I’ve seen a few dollars make a difference in port choice,” said Tay Yoshitani, the top executive of the Port of Seattle.
About 70 percent of the Port of Seattle’s import volume is discretionary cargo headed inland, which could be shipped through any number of West Coast ports.
Added John Wolfe from the Port of Tacoma, “I’ve never experienced the type of competitive aspect that we face today.” 

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