In January 2016, the government of the United States of America announced a change in production support.



  • 1 harmful
  • 0 neutral
  • 0 liberalising
Inception date: 01 Jan 2016 | Removal date: open ended

Production subsidy

Existing U.S. law provides for the expenditure of$186,000,000 in Fiscal Year 2015 "For necessary expenses to maintain and preserve a U.S.-flag merchant fleet to serve the national security needs of the United States." That funding was provided in a provision (Division K, Title I, Section 168) of the 'Consolidated and Further Continuing Appropriations Act, 2015' (H.R.83) that President Obama signed into law on December 16, 2014.
In its budget proposal for Fiscal Year 2016 the Obama administration asked that Congress increase this spending to $211,000,000, "of which $25,000,000 is to support retention of merchant mariners in the United States merchant marine: Provided, that these funds shall only be available to the extent that any fiscal year 2016 legislation is enacted that permits at least 25 percent of funds appropriated for Title II of the Food For Peace Act (P.L. 83-480), as amended, to be used for monetary awards for emergency programs."
In other words, the $25 million appropriation is intended to act as compensation to the merchant marine in the event that Congress enacts separate legislation that would relax the existing cargo-preference laws that reserve 25% of food-aid shipments to U.S. ships.
The proposal further specifies that "at least $1,000,000 of these funds shall be used to support training programs to retain and advance U.S. citizen mariners for critical positions as determined by the Secretary of Transportation in consultation with the Commandant of the Coast Guard," and further provides that "up to $24,000,000 of the remaining funds shall be used for other support to mariners, such as providing payments to operators of vessels and foreign trade separate from Maritime Security Program payments, on such terms and conditions as the Secretary of Transportation may determine in consultation with the Secretary of Defense."
The GTA includes state guarantees and other financial incentives that are likely to affect the restructuring and performance of firms facing international competition, whether from imports, in export markets, and from foreign subsidiaries.