Monday, 12 December 2011

Canada- US spat as New York State's ballast water regulations threaten trade

The Canadian Minister of Transport has said that Canada will not let the state of New York dictate ballast water regulations that will have major ramifications on trade on the vital St. Laurence Seaway that connects the Atlantic to the Great Lakes. The Minister was talking on a teleconference on ballast water requirements on the Seaway.

Canada is said to be extremely concerned at the State of New York's proposed ballast water treatment standards that are, according to scientists, 100 times more stringent than the IMO's standards that are due to be ratified. Pierre Poilievre, Parliamentary Secretary to the Canadian Minister of Transport told reporters that New York's position could shut down Seaway traffic and trade, including trade with the United States. The two countries are set to hold a series of talks to try to sort out the matter.

The Canadian government says that New York's rules are so strict that the technology and testing capabilities to comply with them does not exist. Other major concerns include the fact that the New York regulations, if passed, would apply not only to ships entering that State's ports but even to those in transit- whether they plan to discharge ballast or not. With two locks at the entrance to the Lakes lying in New York waters, Canada says that this would effectively stop all traffic, including Canadian domestic ships plying on the Seaway.

Poilievre says that ship owners would not want to transit New York waters because of concerns over insurance cover. He is calling for "compatible regulations for all jurisdictions along the Seaway" as the way to solve the issue. 

Analysts say that the root of the problem is the absence of a federal standard on ballast regulation in the US. As a result, more than two dozen states have enacted their own laws, some so stringent that they have been called unachievable by scientists working on the problem of invasive species borne in ships' ballast.  A new Bill by the US House of Representatives may provide a glimmer of hope- it proposes to set a US national standard for ballast water regulation of vessels with benchmarks in line with those of the IMO. Observers say that with the New York regulations slated to take effect in 2013, the federal government will need to hasten this alternate process to avoid a souring of relations with their neighbours to the north- and severe commercial repercussions.

Amidst reports that New York may be softening its stand, New York senator Diane Savino said this week that she hopes to work with Canada to "advance achievable ballast water standards in New York State that will ensure environmental conservation while promoting jobs and the North American maritime economy." The President of the New York Shipping Association Joseph Curto has also backed the Canadian position. 

Meanwhile, ship owners are waiting on the sidelines before making expensive investment decisions. Even without the New York rules, scientists estimate that as many as 10,000 ships a year- and around 68,000 in total- will have to be fitted with expensive Ballast Water Treatment (BWT) equipment to comply with upcoming IMO benchmarks- at a cost of roughly USD $1 million per ship. A massive $68 billion will be spent in all. 

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