If the shiet hadent hit the fan already, this will push it a lot closer. Forget global recession, look out for depression. And I am already depressed alright.
US bans ships from 24 nations, trade hit
Nidhi Nath Srinivas
NEW DELHI
GLOBAL trade and international shipping have hit a rock. The US has a directive ready not to allow entry of ships with crew or flying the flag of 24 identified nations. This means a ship cannot enter US harbours if it belongs to any of these nations, nor will it be allowed to berth if it carries crew from these countries.
They will also not be able to touch these countries as the last port of call before sailing for America.
The directive, proposed by the US Coast Guard, has turning into a virtual nightmare for the shipping industry. It is desperately seeking to make vessels US-directive compliant, causing an upheaval in the industry — routes are being altered, crews changed and vessel contracts are being reworked.
The order will also introduce mind-numbing complications in the movement of cargo which, in turn, means global trade has just become a lot more tedious, if not very difficult.
The 24 countries being named by the US Coast Guard in its proscribed list are: UAE, Jordan, Kuwait, Turkey, Syria, Yemen, Iran, Iraq, Libya in the Middle East; Egypt, Libya, Tunisia, Algeria, Somalia and Sudan in Africa; Maldives, Malaysia and North Korea in Asia; Yugoslavia in eastern Europe; and the CIS states of Tajikistan, Turkmenistan, and Uzbekistan.
The remaining three are Cuba, Afghanistan and Cameroon.
Indian exports to the US is worth $12 billion, or one-thirds roughly of all exports. The new American law is expected to make life awfully tough for Indian exporters.
For one thing, they will no longer be able to export goods to the US in vessels that touch Dubai — which at present, is a usual stopover. For another, transhipment of Indian goods through Dubai will no longer be possible.
Said a representative of an international trading house here: “We don’t know what has hit us. We are now desperately seeking alternative routes.
Apart from affecting the availability of ships to move cargo to the US, the directive effectively bars exports from these countries to the US unless the goods are sent through another country’s vessel and on a carefully plotted route map which avoids all barred ports. In current circumstances, this is virtually impossible to achieve.’’
The international trading companies fear that other US allies, like its European allies, Japan and Australia may also follow suit in a knee-jerk reaction.
“Even if these allies bar a few of these countries for a short while, the impact on trade and prices would be substantial. In fact, goods from these barred countries will be impossible to move,’’ they said.
For India, the US Coast Guard fatwa could be a mixed blessing. Indian ships and crew can continue entering US ports and it may become the preferred carrier for neighbouring countries, like Malaysia and the Middle East, which are now barred from doing business themselves.
However, Indian exports that reach USA via Dubai could be badly affected by this decision. Basmati rice, engineering goods, machinery, garments, and steel follow this route.
“If the ban is not lifted in the next few months, the resultant impact on Indian trade could become very grim,’’ sources said. Already, Indian importers have begun to feel the pinch as foreign ships are increasingly reluctant to dock at ports on the west coast like Kandla and JNPT.
