June 30, 2010

McCain introduces bill to repeal Jones Act

Critics say move would cost U.S. jobs and threaten national security.

By Mark B. Solomon

Sen. John McCain (R-Ariz.) has introduced legislation to repeal the Jones Act, a 1920 law requiring that all goods shipped between U.S. ports be carried by U.S.-built ships and that the vessels be owned and operated by Americans.

In a bill introduced on Friday, McCain called the Jones Act "antiquated and protectionist" and said it favors labor unions over U.S. consumers. He cited several studies that showed that a repeal of the Jones Act could provide a boost to the U.S. economy of between $650 million and $1 billion by introducing lower-cost foreign competition and labor into what are now U.S. monopoly trades.

McCain said the burden of the Jones Act falls most heavily on residents of Alaska and Hawaii, states that rely heavily on goods shipped via Jones Act vessels from the mainland. The senator cited a comment made in 1997 by a Hawaiian government official that Hawaiian residents at the time paid $1 billion more a year in higher prices because of the cost of complying with the Jones Act.

The Transportation Trades Department (TTD) of the AFL-CIO criticized the bill, saying in a statement that it would lead to the elimination of as many as half a million American jobs and threaten national security by depleting the pool of U.S. ships and skilled crews who could be deployed during wartime.

The TTD said "only U.S.-flag vessels crewed by U.S. citizen mariners comply with the U.S. government-imposed homeland security rules designed to protect the nation from maritime-related terrorist threats."

The American Association of Port Authorities had no comment on the McCain legislation or the Jones Act in general.

The Bush administration in 2005 granted a waiver of the Jones Act to allow foreign-owned and -crewed vessels to help with relief and recovery efforts following Hurricane Katrina. Though as many as 17 nations have offered maritime aid to the United States to help contain and clean up the massive oil spill in the Gulf of Mexico, the Obama administration has yet to grant any Jones Act waivers, according to McCain.

A Department of Transportation official did not return a telephone call requesting comment. But Adm. Thad Allen, who is heading the U.S. government's cleanup efforts in the Gulf, said in comments posted online that 15 foreign-flagged vessels are currently involved in the effort, and that no Jones Act waivers have been granted because none of these vessels have required exemptions

"Should any waivers be needed, we are prepared to process them as quickly as possible to allow vital spill response activities being undertaken by foreign-flagged vessels to continue without delay," Adm. Allen said.

About the Author

Mark B. Solomon
Senior Editor
Mark Solomon has spent 25 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. Mr. Solomon graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.

More articles by Mark B. Solomon

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