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No, We Really Don’t Need the Jones Act


The American Maritime Partnership (AMP) is the national lobby for American shipping protectionists and a mouthpiece for the Jones Act. It isn’t all that surprising that Mr. James Henry, their chairman, would move so quickly to write a reply to our article. Rent seekers tend to aggressively defend their interests.

Let’s go to the facts. The fact is that the Jones Act is a disaster for the welfare of the average American. Despite Mr. Henry’s claims, freight rates for wet cargoes (such as crude oil and refined gasoline) on Jones Act vessels are near $100,000 per day, compared with less than $20,000 in the global market for non–Jones Act vessels. Those prices are passed on in the final cost to American consumers. Every time you fill up your gas tank you are paying a little bit extra to subsidize Mr. Henry and his colleagues.

According to an International Trade Commission (ITC) report issued during the Clinton administration, a repeal of the Jones Act would have a negligible impact on the maritime industry. Of the 11,000 workers engaged in coast-wide trade and services, some 2,450 could be displaced while only 36 jobs in the ship-building industry itself would be lost. What’s more, the ITC report indicated that the number of workers in the maintenance and repair sectors would increase as a result of a repeal. It is also worth noting that the Transportation Institute that Mr. Henry cites for his figures is a think tank and lobbying group, which he previously ran, devoted exclusively to defending the Jones Act.

The fear that proponents of the Jones Act seem to have of ships contracted abroad is surprising given that those concerns do not translate to other collaborative efforts such as the F-35 program. Turkey, Norway, and Denmark (all of whom have thriving shipbuilding industries) are partners in building the highly classified components for that warplane. So, we can build the F-35 together, but building and crewing ships with our allies is a national-security disaster?

It is extremely surprising to see the prospect of a “national emergency” referred to in defense of the Jones Act. After Hurricane Sandy, the Obama administration, ordered a temporary twelve-day waiver on the Jones Act across the northeast. The reason given was that: “The Administration’s highest priority is ensuring the health and safety of those impacted by Hurricane Sandy and this waiver will remove a potential obstacle to bringing additional fuel to the storm damaged region.” The same waiver was granted in the aftermath of Hurricane Katrina, and has been issued for other natural disasters. When disaster strikes, the first thing to go is the Jones Act.

— Eftychis John Gregos-Mourginakis and Joshua Jacobs are co-founders and members of the board of the Conservative Future Project, a think tank in Washington, D.C.


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