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Maritime Group issues public call against changing Jones Act for Puerto Rico

By on August 27, 2016

In anticipation of what may be one of the topics to be discussed by the congressional Task Force on Economic Growth for Puerto Rico, the American Maritime Partnership (AMP) reiterated Saturday that there is simply no justification for changing the Jones Act for Puerto Rico.

The Task Force imposed a Sept. 2 deadline for those interested in submitting modifications to federal laws that can help jumpstart the Puerto Rico economy. By Sept. 15, the panel must submit an initial report. For years, there has been a debate on the need to exempt Puerto Rico from the Jones Act to help the island deal with its economic crisis and spur the economy.

Illustration on the centrality of trade to national security (Linas Garsys /The Washington Times)

Illustration on the centrality of trade to national security (Linas Garsys /The Washington Times)

“The Jones Act ensures that companies operating in the domestic commerce of the United States, including service to Puerto Rico, are subject to American laws. The military strategy of the United States also relies on the availability of U.S. vessels and crews and a shipyard defense industrial base, which the Jones Act supports. Further, as a Lexington Institute report recently noted, the ‘venerable Jones Act provides an important barrier to terrorist infiltration of the homeland,” the organization declared in a statement.

Opponents of the law, the group says, ignore these national and economic security benefits and instead focus their attention on false and misleading statements about the cost impact of the Jones Act on Puerto Rico.

AMP chided a report by the group, The LIBRE Institute, which among other things, says that because of the Jones Act, Puerto Rico consumers are paying more than double the competitive price for everything shipped to the island and that “any product” shipped to the island comes at a higher cost.

“LIBRE’s claim is wildly off the mark. Ocean shipping costs for some of the most basic household goods – vegetable oil, canned soup, ketchup, milk, peanuts, pizza sauce – represent only 2 to 5 percent of the retail prices of these goods in Puerto Rico. That’s pennies on the dollar. If consumer goods really cost twice as much in Puerto Rico, another dubious statement to be sure, it is not because of the Jones Act,” the maritime group said.

While LIBRE asserts the Jones Act is adding $0.15 cents per gallon to gasoline in Puerto Rico, the organization noted that the Gasoline Retailers Association of Puerto Rico in January said that while gasoline in Puerto Rico was cheaper than in the mainland United States, it was currently higher than in the mainland because of the imposition of taxes on petroleum and its derivatives.

“Moreover, a majority of the gasoline used in Puerto Rico is imported from foreign locations using foreign-flag, non-Jones Act vessels,” AMP added.

“The facts – independent, unbiased facts – simply do not support the assertions being made about the Jones Act’s impact on Puerto Rico. But, one thing is supported by the facts: a sure way to undermine Puerto Rico’s economy and its chances to redevelop a thriving economy is to drop the reliable service that the Jones Act provides,” the group maintained.

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