Study Confirms Jones Act Benefits for Puerto Rico

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Bless your heart, you are just adorable.

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So that study echos the one previously by the GAO and fills in some gaps.
Sounds to me like in light of that study the argument against the Jones act fall flat on it’s face.
Still, some people and their employers have ulterior motives (reference the above) and will argue in favor of repealing such as the CATO institute and the other McCains of the world.

Most mariners could care less where the vessels are built (most shipyards bus in Mexicans to do the work anyway, or have a bunkhouse where they keep Filipinos 6 months out of the year circumventing hiring of American welders) so perhaps that should be talked about, ll…but if we allow any change to the one part we know what will happen to the cabotage portion.

If my my employer gets to choose between me or a Filipino officer for $100/day and a bag of rice pretty sure they’re picking the Filipino officer. Surely all of the deck department would be replaced immediately.

Hope they never get their way but with enough monetary persuasion in the form of lobbying, anything’s possible I guess.

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Seems like an article of faith among mariners but I’ve never seen the logic fleshed out. Can someone explain to me how repealing US-built to bring the Jones Act in line with every other U.S. cabotage law leads to repeal?

A few points -

It offends my sense of logic that the Jones Act can be argued to be economically beneficial to users, when it is only used when it absolutely has to be, and never used when workarounds are possible. If you want to argue the extra cost is worth the US security benefits it proports - well that is different.

The Jones Act, is, was, and will always be a shipyard subsidy. It is completely possible to undo the US build requirement and maintain a US crew requirement. I know of no basis of the “slippery slope” argument.

A larger issue is compensation for those companies that built, own and charter Jones Act tonnage for losses in asset value/current long term hire rates if the US Build is removed.

It is certainly well past time to review the objectives of the Jones Act, dispassionately evaluate if those objectives are being met, and be open to changes if the current law has proved ineffective.

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Well, the argument relies on the same arguments as the Cato Institute (you’ve heard of them, right?) uses in dispensing with the crew, so, validating the arguments by repealing build provisions would validate the same arguments used for crew.

I see no “but if the build provisions were repealed, we’re OK despite our belief that…” in the Cato Institute paper to get rid if US crews:

“Much has been written about the first three provisions, especially the U.S.-build requirement, but the mandate for the crew also impacts the U.S. economy and shipping industry. This requirement drives up the cost of U.S. shipping, especially to locations outside the continental United States. It also discriminates unfairly against U.S. residents who are non‐​citizens but otherwise authorized to work in the United States, all while doing nothing to protect the security of the American homeland or enhance the capability of the U.S. military. Any conversation about reforming the Jones Act to better serve America’s national interest must include a reasonable relaxation of the crew requirement.“

And to those who say, “but thats just citizenship, we can leave the American officers in charge as is currently allowed in certain circumstances anyway!” ? Thats the slope, and it is slippery.

Now you have. Plus, vessels wont just come to US flag absent the build requirement, without getting a subsidy, MSP proves this. Curiously its a subsidy the Cato Institute is OK with, and it is all a big coincidence that the Venn diagram of beneficiaries of repeal of the JA and MSP subsidies is basically a bullseye.

The objectives are irrelevant when repeal is the question, the effects of repeal the only consideration and the Act is not exclusively about national security. Or to use a previous argument—-do you want to repeal the Second Amendment too? Total failure in accomplishing its objective of preventing a standing Army. The Jones Act is expensive but established, and it forces the re-injection of private capital into US communities and peoples’ wallets. Cato couldn’t less what happens after repeal, since they wont have to fund anything necessary to alleviate the direct effects of repeal on the US economy which means more costs to do so bourne by the public.

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Appreciate your response, but I’m very skeptical. For example, the 2017 JA waiver for Puerto Rico validated Cato’s arguments, yet I don’t recall the law then collapsing (ditto with the PVSA after PR was given a permanent exemption or Alaska last year for the cruise season). Other countries have liberalized their cabotage laws without removing them entirely.

Curiously its a subsidy the Cato Institute is OK with

I’m OK with it. No idea about my colleagues. Cato doesn’t take institutional positions.

Quite possibly the best anti Jones Act argument I have seen in some time.

Oh, are you some kind of socialist “it’s government’s job to provide for people” type considering industry shouldn’t pay its way by hiring local and putting money into communities?

Odd choice in capitalist country to advocate policies that put tens of thousands out of work so wealthy ship owners can shave their costs yet charge the market set rates, but you do you, I suppose.

Let me explain…
Once there is open talk of cracking open the Jones Act to amend the build provision, Big Ag and Big Oil will use the opportunity to gut the cabotage provision. I’ve heard this from knowledgeable lawyers for three decades now, and I believe them. There are other aspects of the Jones Act the USMM would like modernized but they don’t dare to.

If politicians are children, do you actually expect that once the piñata that is the Jones Act is broken open all the children will politely stay on the sidelines while only one kid scoops up the candy? No. All the kids will swarm the loot and grab what they can get. So the USMM refuses to give any of them the bat. (BY USMM I mean all American vessels, not just the big ones.)

You actually ask us to believe you when you say if the Jones Act was broken CATO’s lobby would grab just the build provision and nothing else? When CATO talks about amending just one portion of the Act and leaving the rest alone, ships operators/mariners know it’s a trick. Evidence: Mr. Grabnow’s often expressed hostility to the cabotage provision.

There is common ground in the build-controversy that could be found, but CATO is uninterested in common ground. Example: alter the build provision to allow the building of American vessels with modular sections built in foreign countries, which is a common practice in Europe. The North American auto industry operates exactly this way, as does increasingly the American airplane industry. Shipyards would be busier, ship costs would be less. Everyone profits.

If CATO, and orgs like CATO parleyed with the USMM and swore to advocate for this, and not touch cabotage, there could be room to negotiate. But CATO is not interested in political results, which takes years of compromise, trust-building, and hard work.

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I don’t think anyone can. It isn’t the build requirement that drives the anties, it’s the labor cost they would rather keep for themselves.

The airline industry appears to be very comfortable with the cabotage laws that prevent Air Bumfukistan from flying to Orlando instead of an American Airlines Airbus built in Toulouse. They wouldn’t hire foreign pilots anyway because senior US pilots take home far less than than their European and Asian colleagues.

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Sincere thanks for sharing your thoughts.

You actually ask us to believe you when you say if the Jones Act was broken CATO’s lobby would grab just the build provision and nothing else? When CATO talks about amending just one portion of the Act and leaving the rest alone, ships operators/mariners know it’s a trick. Evidence: Mr. Grabnow’s often expressed hostility to the cabotage provision.

To be clear, Cato doesn’t lobby. It’s against organization policy and as opensecrets.org shows, we don’t do it: Cato Institute Profile: Summary • OpenSecrets

But if you are referring to Cato as a thought leader or source of advocacy on this issue, fair enough. As for what Cato could or would do in certain situations, again, I can only speak for myself. So what would I do if US-built was repealed? Well, I’d also like to see a waiver system implemented based on economic considerations (as opposed to only waivers for natsec reasons currently) so that goods can be moved if no US ship is available (e.g. LNG tankers). And I think Puerto Rico and Guam should be given coastwise exemptions too. But if US-built was removed and a waiver system implemented, I think a lot of the law’s damage would be ameliorated and I’d focus more on to other harmful laws. Would I still take swipes at the law from time to time? I’m sure. But it would be a much lower priority. And I suspect the impact of the crew/cabotage requirements will wane over time anyway as we see semi or fully autonomous shipping, reducing much of the delta between US vessel costs and those of FOCs (understand there is some debate over whether ships will ever be 100% autonomous, but I think we can all agree crew sizes are likely to further decline).

I think airlines are perhaps a useful example here. Do I think there should be airline cabotage? Yes. Do Cato folks make the occasional criticism of not letting foreign airlines operate on domestic routes? Yes. But I guarantee you that if all planes had to be US-built that the damage inflicted by the prohibition on foreign airlines would be much greater and the level of criticism against such restrictions much, much higher.

Example: alter the build provision to allow the building of American vessels with modular sections built in foreign countries, which is a common practice in Europe.

Yes, I’m aware of Norwegian yards doing this with hulls being brought in from Poland and elsewhere while the Norwegians do the assembly of hull sections and outfitting. And I would support such a change. But it wouldn’t be sufficient for me to then turn away from the law.

Anyway, again, appreciate the forthright response.

Because Koch has a different division for that, Americans for Prosperity and they do it, don’t act like there’s an unconnectedness to your operation.

Here’s the lobbying arm:

Hmm, is that a link to the 2019 OECD Report?

Oh, nope.

Well, surely the Institute itself must be seeing itself as a dry policy analysis organization without thinking about advocacy just letting the data speak, and avoiding the politics, perhaps using the annual reports to assess the economics playing out pointing to policy pts that may have rung true or false each year….

Let’s see what this policy oriented apolitical organization said in their 2021 Annual Report, probably dry data points statistics, oh, never mind pretty clear there’s one thing on their minds and nothing worth talking about except legislative actions:

Don’t know what me, Tim Phillips, and Daniel Garza all taking note of an OECD report proves, but OK (pretty sure the WSJ mentioned it in an editorial as well—the conspiracy grows!).

Well, surely the Institute itself must be seeing itself as a dry policy analysis organization without thinking about advocacy

In my last post: “But if you are referring to Cato as a thought leader or source of advocacy on this issue, fair enough.”

Yes, it is important to remember it’s exclusively “advocacy”, clearly no “analysis” takes place despite the curious repetition of the word here:

Yes indeed. The “policy analysis” they talk about is the policy of their donors to bleed as much cash as possible from policies that exploit the American taxpayer to the greatest degree.

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“policy analysis” does not equal facts. Its the same as saying “in our opinion based on the interests of the people that pay us” Catos policy is established by the Koch conglomerate who pays them.

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