Posted on: Jan 26, 2015
A bi-partisan group of U.S. House members are pushing back and criticizing a recently submitted amendment that would do away with the Merchant Marine Act of 1920, also known as the Jones Act. In summary, the Jones Act requires that domestic waterborne cargo be shipped in U.S.-flag ships owned, built and operated by Americans. Opponents have long criticized the Jones Act for raising the cost of shipping between the continental U.S. and Hawaii, Alaska, Puerto Rico and Guam. High costs of U.S. shipbuilding create barriers of entry, limiting the number of competitors to the protected U.S. domestic market.
“I have long advocated for a full repeal of The Jones Act, an antiquated law that has for too long hindered free trade, made U.S. industry less competitive and raised prices for American consumers,” Sen. John McCain said in a prepared statement. He said his amendment would eliminate an unnecessary, protectionist restriction.”
The major argument against this amendment is the loss of the industrial base that could occur. Without the U.S. dictating that the ships be American, cheaper foreign vessels could eventually eliminate American jobs and knowledge base. The bi-partisan group pointed to a Maritime Administration study that concluded U.S. shipbuilding supports more than 40,000 jobs and injects nearly $60 billion into the economy annually.
The amendment could be voted on in the Senate as early as this week. However, since it is being proposed as an attachment to the Keystone XL authorization bill, which the President has promised to veto, there will be little chance the amendment will become law unless the bill surpasses a 67-member veto-proof majority. Stay tuned as more develops.