Proceedings of the 41 St Annual Meeting of The

PROCEEDINGS OF THE 41 ST ANNUAL MEETING OF THE • TRANSPORTATION RESEARCH FORUM Washington, D.C. September 30 - October 1, 1999 The Magnitude of the U.S. Cabotage Market THE MAGNITUDE OF THE U.S. CABOTAGE MARKET L. Milton Glisson and Michael Jones WHAT IS CABOTAGE? CONCEPT There are some sources that say "cabotage" comes from the Portuguese word cabo, meaning cape or tip. Yet, there are others who say it is derived from the French verb, caboter, which means to coast.' For literally centuries, before the airplane was invented, sailors from northern Europe en route to the Mediterranean Sea would stop at prominent capes along the coast of Portugal to drop off aGnd pick up cargo and passengers, making their trips more profitable. In an effort to protect their own sea trade, the Portuguese outlawed the practice to outsiders and were the first to develop cabotage laws.' In trying to describe what led up to this situation, the reasons are buried in antiquity. For instance, according to the Black Book of the Admiralty, the deputies and lieutenants of newly ordained Admirals must have constituted the first Admiralty Court in England. Sir Thomas Beaufort, Earl of Dorset and Duke of Exeter and who was to be appointed "Admiral of England, Ireland and Aquitaine" in 1412, was appointed Lord High Admiral in 1425. He had a regular Tribunal subject to the legal forms of procedure then in force and endowed with a marshal and other law officers. With the passage of time, the Courts of the various Admirals were merged in one Court of Admiralty for the whole of England.' There were continuous struggles between the Courts of Common Law and the Admiralty Court. These were generated by the efforts ofthe Courts of Common Law to gather unto themselves as many maritime disputes as possible. That is, they were attempting to become the court of original jurisdiction in all maritime matters. As a result, an Act implemented in 1400 by Henry IV was used as a precedent because it provided for remedies against any encroachments by the Admiralty Court. It provided that the "the statute and the common law be holden against the Admiral and his Lieutenant and that the party aggrieved shall have his action on the case against him that cloth unlawfully pursue?' At this point in time, the fifteenth century, a law has been established which includes remedies for breech of its code and a court system has begun to evolve. By the seventeenth century, the Admiralty Court was successful in exercising a very wide jurisdiction. The prevailing thought of the day was expressed aptly by the Admiralty Judge of the day,Dr. John Exton, when he said that"Justice had two wings,one of which spread itself over the land and the other over the water, which was this Admiralty Court" C. John Colombos states that"Custom is the most important source ofthe international law ofthe sea and the usages of the great maritime States must therefore always exercise a weighty influence on its development.' The literature indicates that the value of custom ass source ofinternational law was underscored in a speech by ChiefJustice Marshall ofthe United States Supreme Court in 1833 when he said that:"... the usage of nations becomes law and that which is an established rule of practice is a rule of law."' A second major source of international law is to be found in treaties. An initial serious attempt to codify the principles of the international law of the sea was conducted at the Congress of Paris in 1856. It was there that the famous Declaration of Paris identified the four fundamental rules of: abolition of pirateering, on the immunity of neutral goods in enemy vessels,of enemy goods in neutral vessels and on the effectiveness of blockades. The literature points out that these rules have been constantly treated as binding by all nations including the United States, which, 31 The Magnitude of the U.S. Cabotage Market while it was not a signatory, adopted its principles in all the wars in which it has been engaged after the termination of the American Civil War.' The end of World War 1 witnessed the establishment of the League of Nations which attempted to codify various portions of maritime law for peace time efforts. Within that effort was an attempt to embody "freedom of communications and of transit and equitable treatment for the commerce of all members of the League"' However, World War I advanced the technology of aviation and demonstrated its military potential. As a result, the states recognized the necessity of adopting uniform principles to foster the development of international air transportation. However, the threat which aviation posed to their security also led them to affirm their sovereignty over the airspace above their territories and territorial waters. The Paris Convention of 1919 granted to the contracting parties the freedom of transit - - - ultimately to become known as the "First Air Freedom"- - - it provided no information about the "Second Air Freedom," the freedom to land on foreign territory. In articles 2 and 15, it granted the freedom ofinnocent passage but the last paragraph of article 15 provided that the establishment of international airways was subject to the consent of the states flown over. Interestingly, the United States signed but did not ratify the treaty. Yet, it has followed the foundations of Customary International Law by abiding by its tenants!' Throughout time,international law evolved from "Customary Rules" which have,in turn, evolved from along historical process resulting in their recognition by the international community of nations. However, the volume of customary rules has diminished because of a large number of law-making type of treaties that have been negotiated between and among nations since the middle of the last century. These numbers will continue to decline as the International Law Commission continues its work of codifying and restating customary rules and converting them into treaties such as the Vienna Conventions of 1961, 1963 and 1969, the topics of which were Diplomatic Relations, Consular Relations, and the Law of Treaties, respectively!' While the terms "custom" and "usage" are commonly used interchangeably, there really is a clear technical distinction between them. Barry and Trimble describe "usage" as the twilight stage of custom. Custom,then, begins where usage ends!' Usage is an international habit of action that varies among nations which has prevented it from receiving full legal recognition. While usages vary and conflict, custom must be consistent and unified. As regards the intent of the law, custom is a usage that has obtained the force of law!' TIIE LAW The first serious attempt to codify the principles of the international law ofthe sea was at the Congress ofParis in 1856. Other attempts at codification of the law included the Geneva Convention and Declaration of St. Petersburg in 1864; the Hague Conferences of 1899 and 1907; and the Declaration of London in 1909. Codification of maritime law was an important element of the Conventions signed under the auspices of the League of Nations in 1914, 1921, 1923,and 1925. It was in article 23 ofthe Covenant of the League in 1914 in which an important clause was inserted to be that said that "subject to and in accordance with the provisions of international Conventions existing or hereafter and agreed upon,the members of the League will make provision to secure and maintain freedom of communications relation to "of transit"[emphasis added] and equitable treatment for the commerce of all members of the League." In "freedom this clause, a Conference met at Barcelona in 1921 and agreed on two Conventions and Statutes relating to of transit" and the "regime of navigable waterways of international concern."" The Hague Conference of 1930 was the result of a report by the Committee of Experts which recommended (2)territorial that such a conference should be convened for the purpose of codifying three subjects: (1) nationality; foreigners. waters and(3) the responsibility of States for damage done in their territory to the person or property of law by the In America, attention was first directed toward the importance of codification of international initiated in 1889 at Panama Congress in 1826. This attention was focused on a series of Pan-American Conferences continued to Washington, D.C. and have continued since that time. Conferences in 1906, 1927, 1928, 1933, and 1948 dwell on aspects of codifying international law. 32 The Magnitude of the U.S. Cabotage Market As mentioned earlier,the Paris Convention of 1919 identified the first air freedom,i.e, the freedom ofinnocent passage. For instance, the first sentence of article I stated:"The high Contracting Parties recognize that every Power has complete and exclusive sovereignty over the air space above its territory."" However,the Convention did not define "sovereignty"or delineate fully its implications for purposes ofregulating international air transportation. Sovereignty, as commonly understood in international law, is the right of a state to exercise exclusive jurisdiction over persons and things to the exclusion of the jurisdiction of other states. The Paris Convention established an incomplete basis for international aviation in the post-era of World War I. While it granted to the contracting parties the freedom of transit - - - ultimately to become known as the "First Freedom"- - - nothing was mentioned about the "Second Freedom," the freedom to land on foreign territory. While some researchers have indicated that, as a result ofthe second freedom not being mentioned,it was not granted. Others have indicated that it was implied. A more important defect ofthe Convention was its failure to come to grips with the problem of commercial aviation.

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