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Repeal The Jones Act

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By any measure, the Jones Act has been a failure.” This conclusion comes from the Cato Institute study of the Jones Act. It claims, “Under its watch [Jones Act] the U.S. shipbuilding has atrophied, the [U.S.] shipping fleet has withered, and any contribution to the military’s sealift capability has been trivial at best.” Are we more secure?

The main argument for the Jones Act, which requires goods shipped between U.S. ports to be transported on ships that are built, owned, and operated by United States citizens or permanent residents, has been that the nation is more secure. Cato points out that when U.S. forces were sent to Saudi Arabia for operations Desert Shield and Desert Storm only 12.7% of U.S. military equipment was carried by Jones Act ships. ”Only one U.S.-flagged ship was Jones Act compliant.”

Cato asserts astoundingly that at least on two occasions “…the United States requested transport ships from the Soviet Union and was rejected both times.” During Desert Shield and Desert Storm the deputy commander of the U.S. transportation command indicated that without foreign flag vessels to assist the United States, “It would have taken us three more months to complete the sealift ourselves.”

During this military operation, supporters of the Jones Act crowed that a Jones Act vessel had supported both military operations. Apparently, it was the only ship to do so. Since the 2003 Iraq war, our Jones Act fleet has decreased from 151 ships to 99 ships.

Another reason the Jones Act is irrelevant is that during World War I and World War II, our soldiers were transported by ships. Today they are flown to their destinations by jets. So, the military reason for the Jones Act has been destroyed.

Politics gets in the way

Why has the Jones Act not been repealed you may ask? POLITICS!

The Jones Act hurts agriculture but no one in agriculture speaks up against the Jones Act. Hundreds of millions of Americans are hostage to politicians such as Sen. Lisa Murkowski (R-Alaska), as is Alaska’s powerful Republican Don Young. Republican Steve Scalise of Louisiana is also a powerful supporter because huge numbers of barges are built in his district.

No one should be surprised that these politicians receive political funds from a web of special interests. Puerto Rico’s and Hawaii’s economies are a disaster. This is due in large part to the Jones Act. “Among Jones Act supporters are U.S. shipbuilders, merchant mariners, various maritime unions, and those who actually believe the law is essential to national security. Meanwhile, there are no fewer than six federal agencies and 16 congressional committees with Jones Act enforcement and oversight authorities.”

As you can see, citizens of Puerto Rico and Hawaii suffer outrageous prices for food and supplies as a result of the Jones Act. In 2015 Cato claims trucks carried 11.5 billion tons of goods, but ships under the Jones Act carried only 1 billion tons of freight.

Thirty eight states and the District of Columbia are connected by navigable waters. Approximately 40% of the U.S. population lives in coastal counties which have ports. However, only a negligible 2% of goods and materials are involved in coastal shipping.

Therefore, as Cato claims, most goods travel on congested interstates by truck.

To show how crazy the Jones Act is “…airlines operating in Puerto Rico typically import jet fuel from foreign countries such as Venezuela rather than bring it in from Gulf Coast refineries. This practice is attributable to the difficulty of finding available Jones Act vessels to transport fuel in the first place, and the exorbitant cost of doing so when such vessels are found.”

President Trump and his administration need to end this monopoly which has burdened the U.S. economy for over 100 years.

This commentary originally appeared in the July 23, 2019 issue of Farm Futures.

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