Is It Time to Repeal the Jones Act? [POLICYbrief]
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Is It Time to Repeal the Jones Act? [POLICYbrief]

The Jones Act is the Merchant Marine Act of
1920. It’s named after Wesley Jones, the senator
from Washington, and he justified the, his legislation on the grounds that we needed
to better sealift capacity and a ship-building capacity. The act comes into being as a direct result
of World War I. In 1914 when the world goes to war, the United
States finds itself in a very precarious situation. The U.S. does not have a large ocean-going
merchant marine. And so, the Merchant Marine Act of 1920 aims
to ensure that the United States never finds itself in that position where in time of war
or conflict, it’s basically beholden to foreign nations for their merchant fleets. The Jones Act has many sections, many provisions,
but the one that’s most well-known today is Section 27. Under Section 27 of the Jones Act, it requires
that if you’re going to move goods between two U.S. ports that the vessel that moves
it has to be built in the United States, it has to be registered in the United States,
it has to be owned by Americans, and at least 75% of the crew has to be American citizens. The idea here was to encourage the creation
and foster the evolution of a robust shipbuilding industry. That’s really not what we’ve seen as a result
of the Jones Act. Foreign ships are not allowed to compete for
business with, with the U.S.-built ships. That means that the prices charged for these
U.S. ships are very high, and the costs are high because there’s just no competitive incentive
to produce more efficiently. The cost of the Jones Act to the U.S. economy
is a number that’s been debated and been the subject of a lot of controversy over the years. The Organisation for Economic Co-operation
and Development, the OECD, estimates that the cost to the economy is about 64 billion dollars
a year, and that takes into account the effects on U.S. businesses that rely on transportation. This has to do with the shippers and those
receiving the goods. They would like to see the lower costs, and
the U.S. is a big proponent of that. We advocate free market, free trade. But in truth, throughout our history, we’ve
always had this element of protecting the maritime industry. The first laws and regulations passed by the
U.S. Congress were to protect U.S. ships and U.S. trade. Should vessels in the United States be able
to be built with low-interest loans, then you can offset some of those costs, and you
can bring down the cost to build the U.S. vessels. The Jones Act has failed to live up to its
original purpose, which was to ensure that we had a ship-building industry and that we
had a ready reserve of merchant mariners and that we had a diversity of ships that could
carry men and material to war zones and sites where there are national emergencies. During times of national crisis or emergency,
there are allowances for what is known as a Jones Act waiver, where ships can come
in and provide immediate relief and assistance to areas where there is not enough U.S.-flagged
vessels that meet the Jones Act requirement. We’ve had hurricanes and oil spills where
foreign ships that were turned away because they were not Jones Act compliant. But they’re the ones who have the technology. They’re the ones who are better equipped to
contain oil spills, to provide material for relief efforts in places like Puerto
Rico during hurricanes. There are many factors that went into what
happened in Puerto Rico. One of the first is it got hit by a massive
hurricane which disrupted the internal transportation network in Puerto Rico. You can get goods into the Port of San Juan. The difficulty was getting the goods out of
the Port of San Juan. And contingency should have been done to
be able to move cargo around the island in a more efficient manner. That wasn’t done. If we get rid of the Jones Act, or at least
get rid of the build requirement, we will see many more ships sailing under the U.S.
flag, owned by U.S. owners, crewed by U.S. staff. And we will likely see a renaissance in
U.S. shipyards. The U.S. benefits from the Jones Act through
several matters, and one of the ways that it benefits greatly is, of course, its
abilities to sustain its military forces overseas. By having its own transportation system, a
system whereby goods can be moved on U.S.-flagged vessels, that makes the U.S. independent of
foreign nations. If the United States decides to allow the
Jones Act to be repealed, for most Americans, they will not see a difference. They’ll be able to buy their goods with really
n- no seamless change. But in time of conflict or national emergency,
that’s when the United States would see the impact of not having the Jones Act.

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8 thoughts on “Is It Time to Repeal the Jones Act? [POLICYbrief]

  1. It would be a complete mistake to repeal this act or indeed to weaken its provisions. The protection of American maritime industrial interests cannot be underrated and in times of war it will be necessary to rely on vessels of American design and origin. Furthermore, if we look back to the Federalist economic policy of our founding fathers, it was not one of total free market deregulation but instead one of National Economics where the government works with the market to benefit American industry, American workers and American commerce. If we want to conserve a Federalist image of the United States, it is time to put down the Supply Side economics textbooks and return to a classical Hamiltonian economic program.

  2. Regardless of your position, and excellent film. I continued to be stunned at the quality of these video by the Federalist Society.

  3. The jones act protects the jobs of American Merchant Marines, it holds American ships to a higher standard than other countries and holds the crew to a higher standard.
    The job I do as a Merchant Marine would go away if the Jones act is repealed.
    A engineering officer from Mexico gets paid 180 dollars a day for a 12 hour shift, that’s 15$ and hour or minimum pay, where an American doing the same job gets 65$ an hour.
    Repealing the Jones act is not about competition it’s about corporate overhead, and profits.

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