Politics harry Japanese trade Once again, Japan finds herself immersed in a political imbroglio over export of a synthetic fiber plant to a Communist country. This time, the protagonists, in addition to Japan, are the two Koreas, South and North. The plant is a 30 metric-ton-a-day acrylic fiber plant worth about $12 million. North Korea signed a provisional contract for the plant with Japan's Toko Bussan, Ltd., in early 1964. The issue revolves around Japan's recent decision to permit three North Korean technicians to enter Japan in connection with the plant. South Korea, sensitive in matters involving her northern brethren, has bristled with displeasure. Among other things, South Korea has suspended all visas for Japanese, except those issued for diplomatic or official reasons. She is also recalling South Korean businessmen from Japan. All this less than one year after Japan and South Korea signed a much-heralded friendship treaty aimed at normalizing relations. Japan, for her part, is showing restraint. That doesn't mean she is likely to knuckle under to foreign interference in a question of trade. The Japanese press points out that the contract in question was negotiated almost two years before the Japan/South Korea treaty. On the other hand, Japan's trade with South Korea far outstrips that with North Korea. Last year, for example, Japan's exports to South Korea amounted to about $180 million, those to North Korea about $16 million. South Korea, with its industrial development plans, represents a potentially good plant market for Japan. Still, South Korea needs help for its future growth, and Japan has promised economic aid. It's hard to see any advantage to either government in allowing this issue to fester much longer. Meanwhile, Japan's Kure Shipbuilding and Engineering Co. of Tokyo, which had been part of the group of Japanese firms involved in the plant sale, has withdrawn from the deal. Last year, Japan found herself caught in the middle in a similar manner over sale of a vinylon plant to Red China (C&EN, March 1, 1965, page 48). The issue then was whether Japan would permit long-term financing of the project by the government's Export-Import Bank. Nationalist China protested such financing. Red China insisted on it. In the end, Japan refused to allow Exim Bank financing (though she approved private financing), and Red China cancelled the deal (C&EN, May 17, 1965, page 25). 12 C&EN AUG. l t 1966
The Eisenhower lock at Massena, N.Y. Midwest politicians maneuver to head off toll increases
St. Lawrence meets a goal This may be the year when the St. Lawrence Seaway finally comes up to expectations in terms of cargo tonnage. But, ironically, 1966 may also be the year when the decision is made to raise tolls for the first time on the Great Lakes-to-Atlantic link. Cargoes through the seaway should reach 48 million tons, right on the 1966 target set by officials seven years ago when the seaway was opened. However, disappointing cargoes up until this year have put the seaway $60 million behind in interest payments and triggered a proposed 10% toll increase for next year. But the increase is not yet certain to take place, as Midwest politicians are maneuvering to try to head it off. Joseph McCann, head of St. Lawrence Seaway Development Corp., the federal agency sharing administration of the system with Canada's St. Lawrence Seaway Authority, predicts that seaway cargoes will increase to more than 60 million tons per year by the early 1970's. Biggest growth will come in grain and iron ore. Today, bulk shipments of agricultural products, mostly grain, account for 40% of seaway tonnage. Minerals, mostly iron ore from Labrador, add another 3 5 % . Chemical shipments are relatively small, but they are growing. Last year they reached 182,000 tons, compared with 50,000 tons in 1959. Big chemical industry users include Dow and Canada's Polymer Corp. Dow's exports from Bay City, Mich., and Sarnia, Ont., have increased from 14,000 tons in 1959 to an average of 75,000 tons per year for 1963-65. Polymer Corp.'s exports of synthetic rubber from Sarnia rose 7 3 % between 1959 and 1965. However, increasing business is not solving the seaway's financial problems. By law, tolls must cover opera-
tion and maintenance as well as pay off the system's $470 million construction costs within 50 years. Present tolls are based on estimates made when the seaway opened. Between 1959 and 1965, total cargoes fell 53 million tons short of the estimate. To overcome the resulting arrears, the U.S. and Canadian seaway agencies favor increasing tolls from 40 to 44 cents per ton of bulk cargo and from 90 cents to $1.00 per ton for general cargo. In addition, the agencies favor applying a charge to the nowfree Welland Canal. Just what the increases would do to shipping volume on the seaway seems to be anybody's guess. Midwest shipping people and politicians say it would stifle seaway trade just when it is getting started. The seaway agencies maintain that the increases are only modest and will mainly serve to attract larger ships, thus helping to ensure efficient use of the system. The threat of the increases provoked a flurry of activity in Congress last month. Fifteen Great Lakes Congressmen, for example, introduced identical bills to give the seaway "relief from its present backbreaking financial burden." These bills would make a 10% toll increase unnecessary for the period 1967-71. The Congressmen oppose a toll increase because it would retard growth of seaway traffic and because they believe that the present rates are adequate. Rep. Henry S. Reuss (D.-Wis.) says the most "onerous and grossly inequitable financial burden" placed upon the seaway is the required repayment of capital cost of its construction in 50 years. The St. Lawrence Seaway is virtually the only transportation system, he says, which is required by law not only to cover its own operating and maintenance costs, but also to pay interest at the going rate and to amortize the investment over a relatively short period.
