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NEW YORK (AP) -- A deal has been struck that temporarily averts a strike by 14,500 longshoremen at the Port of Virginia and other major ports on the East Coast and Gulf of Mexico.

A federal mediator announced Friday that an expired contract for workers in the International Association of Longshoremen would be extended for another 30 days while negotiations continue.

The longshoremen had been preparing for a possible strike Sunday that would probably have crippled operations at ports that handle about 40 percent of all U.S. container cargo.

The mediator says there have been major steps forward toward resolving the dispute.

More than 14,000 longshoremen threatened to go on strike at 12:01 a.m. on Dec. 30. A wide-ranging work stoppage would close the cargo ports to container ships.

'I think it's good news,' said Joe Harris, spokesman for the Port of Virginia.. 'What happens in the next 30 days remains to be seen, but I'd like to think that both sides recognize the gravity of this situation.'

The 15 ports involved in the labor dispute move more than 100 million tons of goods each year, or about 40 percent of the nation's containerized cargo traffic. Losing them to a shutdown, even for a few days, could cost the economy billions of dollars.

The Virginian-Pilot reported a complete shutdown would have an impact of about $25 million a day, or $700 million a month, according to James Koch, an Old Dominion University economist.

The Pilot also cited port employers who said a one-month shutdown would cost dockworkers here more than $10 million in lost wages and benefits.

Talks between the dockworkers and shipping companies broke down Dec. 18 amid unresolved issues such as wages and container royalties -- the payments to union workers based on cargo weight.

The mediator's statement says, in part, 'The container royalty payment issue has been agreed upon in principle by the parties, subject to achieving an overall collective bargaining agreement. The parties have further agreed to an additional extension of 30 days (i.e., until midnight, January 28, 2013) during which time the parties shall negotiate all remaining outstanding Master Agreement issues, including those relating to New York and New Jersey.'

AP-WF-12-28-12 0809GMT

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