ANNEX J:

MARITIME SERVICES

SUMMARY

The proposed trade agreement should ensure elimination of the 50% ad valorem duty on ship

repairs to US flag vessels outside of the US

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.

The position on elimination of the 50% ad valorem duty is shared by major US flag maritime

companies and associations.

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 The 50% ad valorem duty is imposed on ship repairs to U.S. flag vessels outside of the U.S. It is clearly in the

interest of U.S. shipping companies that this burdensome duty be eliminated for repairs to U.S. flag vessels outside

of the United States.  The ad valorem duty has been in place to encourage job creation in U.S. shipyards, but has

been a policy failure that is nothing more than an unnecessary tax on U.S. flag ship owners.

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