McCain bill would repeal Jones Act, open cabotage to all

FORMER Republican US presidential candidate Senator John McCain of Arizona has introduced a bill that would repeal the Jones Act, the protectionist law that keeps coastal shipping to American carriers, shipyards and crews.

"The Jones Act adds a real, direct cost to consumers - particularly consumers in Hawaii and Alaska. A 1988 GAO [General Accounting Office] report found that the Jones Act was costing Alaskan families between US$1,921 and $4,821 annually for increased prices paid on goods shipped from the mainland," said Senator McCain on introducing his Open America's Waters Act.

In 1997, a Hawaii government official asserted that "'Hawaii residents pay an additional $1 billion per year in higher prices because of the Jones Act. This amounts to $3,000 for every household in Hawaii,'" he said.

Senator McCain said the 1999 US International Trade Commission economic study "suggested that a repeal of the Jones Act would lower shipping costs 22 per cent. Also, a 2002 economic study from the same commission found that repealing the Jones Act would have an annual positive welfare effect of US$656 million on the overall US economy.

Calling it a law that hinders free trade and favours labour unions over consumers, Senator McCain said: "This restriction only serves to raise shipping costs, thereby making US farmers less competitive and increasing costs for American consumers."

Tim Brown, president of the Masters, Mates, and Pilots Union, said the repeal of the Jones Act might reduce shipping costs, but would also result in the displacement of hundreds of jobs for American seafarers.

Some have called for a repeal of the Jones Act to allow additional foreign-flag vessels to be used in the BP oil spill cleanup, reported American Shipper. But those who oppose its repeal there are enough laid-up American ships that could be used instead.

Mr Brown said Senator McCain was using the crisis of the Gulf of Mexico BP rig explosion to gain more support for a bill that would not otherwise "have a prayer" of passing.

But Senator McCain said the Obama administration has the ability to grant a waiver of the Jones Act as did George W Bush during Hurricane Katrina disaster.

His bill, he said, went far beyond disaster relief. "The best course of action is to permanently repeal the Jones Act to boost the economy, saving consumers hundreds of millions of dollars. I hope my colleagues will join me in this effort to repeal this unnecessary, antiquated legislation in order to spur job creation and promote free trade."
(Source:www.schednet.com)