Thursday, July 19, 2018

Sen. McCain introduces legislation to repeal Jones Act

By on July 19, 2017

SAN JUAN – Arizona’s Republican Sen. John McCain has introduced legislation that would repeal the Jones Act, which requires that all goods shipped between U.S. ports be shipped in U.S. flagged vessels.

It is the second time in over a year that McCain has introduced a Senate bill to amend or repeal the act. He has been trying for years to do so. Puerto Rico officials have long advocated for the repeal of the Jones Act, contending it would help reduce the price of goods on the island because shipping costs are passed on to consumers. Local businesses also argue that bringing goods through U.S. distributors hikes prices because of costs.

“I have long advocated the repeal of the Jones Act, an archaic and burdensome law that hinders free trade, stifles the economy, and ultimately harms consumers,” McCain said in a statement.

Sen. John McCain, R-Ariz (AP Photo/Jacquelyn Martin, File)

“My legislation would eliminate this regulation, freeing American shippers from the requirement that they act against their own business interests. By allowing U.S. shippers to purchase affordable foreign-made carriers, this legislation would reduce shipping costs, make American farmers and businesses more competitive in the global marketplace, and bring down the cost of goods and services for American consumers.

“The protectionist mentality” embodied by the Jones Act, he said, “contradicts the lessons we have learned about the benefits of a free and open market. Free trade expands economic growth, creates jobs, and lowers costs for consumers. I urge my colleagues to support this bill and finally repeal the outdated and protectionist Jones Act.”

The Alliance for Innovation and Infrastructure, a nonprofit formed in 2015, in a study last year said that because the Jones Act requires U.S.-built and -crewed vessels, “the cargo fleet has slowly deteriorated and become unnecessarily expensive to operate.” The study was widely criticized.

In January 2015, the veteran senator had filed an amendment to federal legislation that would remove a major stumbling block to Puerto Rico importing U.S.-sourced liquified natural gas (LNG).

His amendment to the Keystone XL Pipeline bill, would have specifically exempted U.S. LNG from the Jones Act requirement, which would allay concerns that there were not enough U.S. ships to bring LNG from the mainland U.S. to Puerto Rico and allow the island to purchase the gas at a more economical rate.

“Federal laws have hampered our maritime trade and have increased energy costs on the island. It pleases me to announce this amendment has been filed for the benefit of our people,” then-Puerto Rico Federal Affairs Administrator Juan Eugenio Hernández Mayoral said at the time, adding that the federal law forced the island to buy higher-priced natural gas from Trinidad and Tobago.

The administration of Gov. Alejandro García Padilla shied away from inking a long-term contract with U.S.-based suppliers, citing Jones Act restrictions.

President Trump signed an order asking TransCanada to re-submit its application to build Keystone XL, which had been blocked by President Obama.

The 1,179-mile Keystone XL pipeline would carry an estimated 800,000 barrels of crude oil a day from Canada to Nebraska, where it would connect with existing pipelines on its way to Gulf Coast refineries.


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