Jonesing for Shipping Reform: The Merchant Marine Act in the 21st Century

By Will Frankel (CMC ’21)

The Merchant Marine Act of 1920, commonly known as the “Jones Act,” protects the American shipping industry at the expense of American consumers. Its basic requirement is that any ship which is transporting goods from one American port to another American port must be built in the U.S., registered in the U.S., owned by mostly Americans, and staffed by mostly Americans. The protections which the Jones Act provides can, however, be waived in limited circumstances, including cases of natural and manmade disasters. These waivers, which require the approval of the Secretary of Defense or Homeland Security, have prompted the question of whether the Jones Act should be repealed. Supporters of such a reform argue that the Jones Act harms non-contiguous American states and territories, distorts the market for air and land transportation, and hurts American industries, which struggle to compete with imports that are not subject to Jones Act regulation. The harms to non-contiguous territories have hit Puerto Rico especially hard in its efforts to rebuild after Hurricane Maria, as the Act’s regulations pushed up prices on any goods imported from the mainland United States. Puerto Rico’s ongoing suffering has thrust the Act into mainstream American political debate. Some defend the Jones Act on the grounds that it protects both American shipping companies and national security. The economic argument, however, privileges one industry over the health of the economy on the whole, while the security-based argument is badly outdated. The weight of the evidence therefore supports Jones Act reform.

Context

The Merchant Marine, which the Jones Act exists to protect, is comprised of domestic civilian ships engaging in peacetime commerce which are also able to be conscripted into military service during wartime.1 Naval strategists have traditionally preferred these vessels to be American ones in order to be trusted with potential military tasks.2

Americans have long perceived the independence of the America Merchant Marine as a lynchpin of the United States’ economy, history, and even national-identity. George Washington warned in his second State of the Union address, “I recommend it to your serious reflections how … to guard against … contingencies … to our own navigation as will render our commerce … less dependent on foreign bottoms …. [T]he transportation of our own produce offer[s] us abundant means for guarding ourselves.”3  John Adams wrote in his memoirs, “no group of individuals did more for establishing our country than the American Merchant Seamen.”4 Thomas Jefferson agreed: “For a navigating people to purchase its marine afloat would be a strange speculation, as the marine would always be dependent upon the merchants furnishing them …. We must, therefore, build them for ourselves.”5 Influential Americans from the nation’s founding have put a high premium on domestic shipping. American history is rife with support for nationalist shipping policies. This historical outlook culminated with the Jones Act.

Merchant Marine Protectionism 

The most notable landmark legislation in this tradition is the Merchant Marine Act of 1920. The act, often called the Jones Act in reference to its sponsor, Senator Wesley Livsey Jones (R-WA) built on prior legislation. Caught up in the nationalist shipping sentiment of the time, the First Congress in 1789 passed “An Act for Registering and Clearing Vessels, Regulating the Coasting Trade, and for other purposes,”6 which enacted a tax on foreign built and owned ships to protect the American trading industry from British competition.7 While this legislation was initially seen as sufficient protection, the frequent use of naval blockades and submarine attacks during World War I increased America’s focus on the link between maritime commerce and warfare, providing a new reason to tighten protections for the domestic industry.8

 

The Jones Act primarily sought to raise standards for ships9 engaging in cabotage—the shipping of goods between American ports.10 The Act created four primary requirements for vessels transporting “merchandise between points in United States”: they must be owned by companies that are at least 75 percent U.S. citizen owned, operated by a crew that is at least 75 percent U.S. citizens, built in the U.S., and registered in the U.S. Multiple administrative agencies enforce these rules, including the Coast Guard and the Federal Maritime Commission, and those agencies have interpreted the Act to apply to nearly every commercial vessel, including cruise ships.11 Federal courts have also extended the definition of the kind of “merchandise” Jones Act-applicable vessels must carry to include anything of a commercial value, including dredged materials used for landfill.12 Despite the expansive definition granted to the Jones Act, it covers very few actual ships. While the Act covers 30,000 total vessels, the most recent estimates suggest there are only 91 large Jones Act-eligible vessels in existence because 89 percent of commercial vessels produced in U.S. shipyards since 2010 are barges or tugboats.13 The Jones Act, then, is significant in how restrictive it is. It has effectively limited all large-material American cabotage trips to just 91 vessels.

Jones Act Exceptions

Nonetheless, the Jones Act has not always been enforced to the fullest extent of the law. It has become increasingly common for the government to permit foreign-owned, -staffed, -registered, and/or -built vessels to operate where only Jones Act vessels could before. For example, the Bowaters Act of 1958 reduced the minimum fraction of U.S. citizens staffing a vessel, for the purposes of Jones Act compliance, to only half of the crew if the ship is heavily engaged in the American manufacturing or mineral industries.14 A 2006 amendment, the most recent categorical change to the Jones Act, provided that the Secretary of Transportation can waive the requirements for foreign-built passenger vessels that carry no more than 12 clients if he or she determines that doing so will not adversely affect U.S. vessel builders or vessel employers.15 Such waivers are permanent, and they are granted roughly 75 times annually.16

Jones Act Waiver System

The most significant Jones Act exceptions are temporary waivers offered in the interest of national defense. There are two legal avenues for the executive branch to waive the Jones Act.17 First, U.S. Code Title 46 provides that Jones Act requirements can be waived “to the extent the Secretary [of Defense] considers necessary in the interest of national defense.”18 For example, Secretary of Defense Donald Rumsfeld ordered a Jones Act waiver in 2006 to transport military helicopters from Tacoma, Washington to Anchorage, Alaska.19 Second, Title 46 continues that Jones Act requirements can be waived “following a determination by the Maritime Administrator … of the non-availability of qualified United States flag capacity to meet national defense requirements.”20 In other words, the executive may waive the Jones Act if the Maritime Administrator determines that a Jones Act vessel is not available to do the job. In the 21st century, precedent has vested this power in the Secretary of Homeland Security, whom this statute empowers to offer “discretionary” Jones Act waivers, which are only distinguished from the Secretary of Defense’s waiver system in that “discretionary” waivers must be effectively precleared by the Administrator of the Maritime Administration (MARAD).21 Regardless of which Secretary orders the waiver, the law states that it “shall terminate at such time as the Congress by concurrent resolution or the President may designate.”22

Historical precedent has also stretched the definition of “national defense” to make humanitarian response efforts the most frequent cause of recent Jones Act waivers. Following the 1989 Exxon Valdez oil tanker spill in Alaskan waters, Exxon requested foreign oil skimming barges to help clean-up efforts. MARAD and the Department of Defense both supported a Jones Act waiver, with the Department of Energy adding that a slow or inefficient response could jeopardize American energy supplies and therefore the interest of national defense.23 In 2005, Secretary of Homeland Security Michael Chertoff suspended the Jones Act during the aftermath of Hurricane Katrina.24 Chertoff reasoned that the hurricane disrupted oil and gas production and transportation, causing “large runups in the price of oil, gasoline and other refined products” as well as “threatened or actual shortages of gasoline, jet fuel, and other refined products.”25 He thus concluded, “a waiver, in accordance with the terms set forth below, is in the interest of the national defense.”26

The BP Deepwater Horizon oil spill, though, marked a turning point in Jones Act waiver precedent. Writing in the Washington University in Global Studies Law Review, former Special Assistant District Attorney for Kings County Joseph M. Conley27 explains that “in contrast to Hurricane Katrina … the BP oil spill did not effectively inflict damage to infrastructure or limit the availability of oil and gas. Instead, the spill caused massive economic and environmental damage.”28  Conley thus concludes that the precedent of the BP oil spill established “the availability and practicality of a Jones Act waiver when necessary” for a broad array of interests, such that “any interested party could apply for a Jones Act waiver.”29 With the precedent of the waiver President Obama offered to BP baked into the Jones Act waiver system, the executive has since offered waivers in response to crises as wide reaching as the American 2011 military efforts in Libya,30 Superstorm Sandy in 2012,31 and hurricanes Irma and Harvey in 2017.32

Hurricane Maria

On Wednesday, 20 September 2017, Category 4 Hurricane Maria—the fifth strongest storm to ever hit the United States—made direct landfall on Puerto Rico.33 Within hours of landfall, the hurricane destroyed 80 percent of the crop value in Puerto Rico.34 Maria also knocked down 80 percent of the island’s transmission lines.35 In late October 2017, 75 percent of Puerto Ricans were still without power according to a Rhodium Group report which concluded, “Hurricane Maria has caused the largest blackout in American history.”36 Efforts to restore power were estimated to take four to six months as of November,37 and at the start of 2018, nearly half of power customers in Puerto Rico still lacked electricity.38 While the Federal Emergency Management Agency (FEMA) and its partners were providing 200,000 meals a day as of October 2017, it was nonetheless running a daily shortfall of between 1.8 million and 5.8 million meals.39 Compounding the aid shortfall, FEMA announced on January 17 that it would withhold a Congressionally approved billion-dollar emergency loan to help Puerto Rico recover from Hurricane Maria on account of the island’s lack of financial transparency.40 Moody’s Analytics’ estimated that Maria will cost Puerto Rico between $45 billion and $95 billion, equivalent to 65-135 percent of its gross national product.41

Despite the magnitude of the disaster, the Trump administration’s attitude towards a Jones Act waiver has been parsimonious. On September 27, a full week after the hurricane made landfall, President Trump stated publicly that the administration was “thinking about” issuing a waiver, “but we have a lot of shippers and a lot of people that work in the shipping industry that don’t want the Jones Act lifted, and we have a lot of ships out there right now.”42 On the same day, a Department of Homeland Security official told reporters, “As based upon our current conversations, there is not a lack of vessels to move the goods that we need to support the humanitarian relief efforts.”43 Despite this public restraint, the next day, with the President’s authorization, Acting Secretary of Homeland Security Elaine Duke issued a 10-day Jones Act waiver covering all products shipped to Puerto Rico.44 Citing 46 U.S.C. 501, as discussed above, Duke stated, “I am exercising my authority to waive the Jones Act for a 10-day period, commencing immediately … This waiver applies to covered merchandise laded on board a vessel within the 10-day period of the waiver and delivered by October 18, 2017.”45 On October 9, 2017, the administration allowed the waiver to expire without an extension, in contrast to the September waivers issued in response to hurricanes Harvey and Irma, which the administration extended for an extra week after their expiration.46

With the precedent of Jones Act waivers for hurricanes established by prior administrations and continued by the Trump administration for Hurricanes Irma and Harvey, the initial reluctance of President Trump to support a Jones Act waiver in response to Hurricane Maria renewed public discussion of the merits of the Act.47

Arguments in Support of Jones Act Reform

Economic Harms of the Act to non-Contiguous Territories

The principle argument against the Jones Act pertains to its effect on consumer prices in Puerto Rico. The Jones Act prevents American vessels from having to compete with foreign ones during domestic shipments. These foreign competitors may offer lower prices, or pressure domestic shippers to bring down their prices to compete.48 Indeed, foreign ships do offer more competitive prices: Jones Act vessels’ daily operating costs are more than twice those of foreign-flagged vessels.49 Shippers with less competition can charge their business-clients more, and those clients pass the increased shipping cost onto their consumers. While this is mostly irrelevant for trade among the contiguous 48 states, which have little reason to use the merchant marine to transport goods, Hawaii, Alaska, Guam, and especially Puerto Rico do experience the consequences of this market-distorting protectionism.50

A wealth of empirical evidence supports the economic theory. The Federal Reserve Bank of New York found in 2012 that the same twenty-foot container of household and commercial goods that costs $3,063 to ship from the East Coast of the U.S. to Puerto Rico would cost only $1,504 to ship from the Dominican Republic or $1,687 from Jamaica—destinations that are not subject to Jones Act restrictions.51 Regardless of which foreign island one benchmarks status quo costs against, then, the Act doubles shipping costs. Indeed, a 2015 report commissioned by the Puerto Rican government and written by three current and former International Monetary Fund economists found that Puerto Rico pays “import costs at least twice as high as in neighboring islands on account of the Jones Act.”52 These high import costs manifest themselves in higher prices for Puerto Rican consumers. Another 2015 report, prepared by Puerto Rico’s Institute of Statistics, found the cost of living in Puerto Rico was 13 percent higher than that of a collection of more than 325 urban areas in the U.S., with supermarket items 21 percent more expensive than in U.S. states, gasoline 12 cents more expensive per gallon, and monthly household energy costs more than 2.5 times higher.53 While this cannot be entirely attributed to the Jones Act, Puerto Rico’s combination of a low per capita income and high cost of living suggests that detrimental public policy almost certainly is to blame. Economists have found that, in general, variations in cost of living across the United States are largely a function of variations in per capita income.54 However, per capita income in Puerto Rico is half the U.S. average,55 suggesting that its price inflation is not merely a natural product of high wages pushing up consumer prices. These numbers, of course, also do not account for how much considerably more expensive items are during a natural disaster.56

Former New York State assemblyman Nelson A. Denis thus summarized in the New York Times, “this is a shakedown, a mob protection racket, with Puerto Rico a captive market.”57

Similar effects exist for other non-contiguous parts of the U.S. For example, shipping prices contribute greatly to Hawaii’s highest-in-the-country cost of living, which is 12 percent higher than the next most expensive state in the Union.58 In 2002, the U.S. International Trade Commission concluded that the annual economic gain from repealing the Jones Act to the residents of Puerto Rico, Alaska and Hawaii would be, in current dollar values, between $5 billion and $15 billion.59

Increased Reliance on Air and Land Transportation due to the Act

By driving up the price of cabotage, the Jones Act distorts the American transportation sector in general. The Act increases reliance on land and air transport. As an odd result, the Act has pushed ranchers to fly their cows on airplanes rather than having them loaded and shipped on boats.60 The end result of this and other similar cases is that only 2 percent of domestic freight distributed among the lower forty-eight states travels by water, even though half the population lives near the coast. In contrast, Europeans ship over 40 percent of their domestic freight along so-called motorways of the sea.61

This has the harmful side effect of increasing highway congestion.62 The Jones Act leaves Americans with virtually no coastal shipping for cargo between U.S. ports in the lower forty-eight states despite the interstate highway system being at or near capacity, and road infrastructure crumbling.63 Without the Jones Act, estimates suggest that such coastal water transport would be about 60 percent cheaper.64

Harms of the Act to Other Domestic Industries’ Competitiveness

But where goods are still transported on the water, the Jones Act does not just hurt consumers who have to pay higher prices. Because the Act pushes up input costs on American industries, forcing them to increase prices, it therefore also encourages consumers to turn to foreign firms who offer a lower price. If an American firm must charge a higher shipping cost because of the Jones Act, American consumers will not buy American. For  example, in Boston, getting oil from Texas is three times more expensive than getting it from Europe, which economists attribute directly to the Act.65 For another example, mid-Atlantic states import road salt from Chile and Mexico rather than buying it from mines in Ohio and Louisiana, and U.S. steel plants avoid deals with American scrap metal sellers, in both cases due to cheaper transport costs.66 Similarly, cruise ships cannot carry passengers directly from Washington to Alaska without paying for the higher price of a Jones Act vessel, so many Alaskan cruises originate in Vancouver, hurting the potential Washingtonian cruise industry.67 The Jones Act thus protects the domestic shipping industry at the expense of all other industries, making them less competitive than their foreign counterparts who need not limit their transportation options. Holistically, a 1996 analysis estimated that if Congress repealed the Jones Act, American industries would boom, with $1.5 billion growth in the water sector, $158 million in petroleum, $103 million in chemicals, $91 million in air transportation, $50 million in steel, $40 million in plastics, and $32 million in lumber.68

Arguments Against Jones Act Reform

Benefits of the Act to the Domestic Shipping Industry

The Jones Act’s benefits to the American Merchant Marine are without a doubt the primary source of its political strength.69 The Jones Act is indeed the lifeline of the American shipping industry—in the face of consistently subsidized foreign competition, the U.S. would face a rapid decline in its merchant marine fleet without the Act’s protection.70 In addition to subsidies, foreign ships are not subject to the American level of taxes and wages, complying with an American level regulatory apparatus, and defending themselves from litigation in our court system.71

All these facts would make American ships uncompetitive in a post-Jones Act world. On the other hand, a 2001 Department of Commerce assessment of the U.S. shipbuilding industry explains, “the Jones Act … provides a fleet of sealift capable vessels, a workforce of experienced and knowledgeable people and a shipbuilding industrial base.”72

The suffering of the American shipping industry could have serious economic effects. As of 2006, the Jones Act fleet employed nearly 74,000 Americans, including vessel construction and maintenance, the crewing of vessels, and shore-side trade management, in addition to 425,000 more jobs attributed to the JoAct through indirect and induced employment.73 Moreover, in 2011, domestic shipping goods and services contributed $33.6 billion in sales taxes, $21.7 billion in taxes on labor compensation, and $9.9 billion in taxes to state and local governments.74

Benefits of the Act to National Security

There are multiple avenues through which the Jones Act might protect American national security. First, Jones Act vessels can play an active role in responding to national security emergencies.75 For example, the SS Northern Lights, which normally runs between Tacoma and Anchorage as a merchant mariner, made 25 voyages and 49 port calls to the Iraqi war zone during Operation Iraqi Freedom due to a need for a fast and shallow vessel to move military vehicles and hardware to the conflict area.76 On the whole, U.S. merchant mariners moved 90 percent of the combat cargo and supplies used by the military in the Iraq war.77

But if Congress repealed the Jones Act and economic incentives drove the domestic shipping industry into the subsidized hands of foreign competition, it may leave the U.S. to pick from one of several undesirable options: provide massive subsidies to the shipping industry to (literally) keep it afloat, rely on foreign-owned vessels to carry American military cargoes, or build a government-owned fleet of cargo vessels.78

Another national security benefit offered by the Jones Act concerns American border security. Daniel Goure of the Lexington Institute notes that while the current debate on U.S. border security has focused on the undocumented movement of people and goods from the border with Mexico, in fact, the 95,000 miles of national shoreline dwarf all U.S. land borders taken together.79 He writes, “for regulatory, safety and security purposes, it includes 361 ports, over 3,000 facilities and more than 14,000 regulated domestic vessels.”80 U.S. Coast Guard Assistant Commandant for Prevention Policy Rear Admiral Joseph Servidio testified in committee at the House of Representatives in 2012, “The vastness of this system and its widespread and diverse critical infrastructure leave the nation vulnerable to terrorist acts within our ports, waterways, and coastal zones, as well as exploitation of maritime commerce as a means of transporting terrorists and their weapons.”81 Moreover, access to America’s internal waterways would give a terrorist a path to many of America’s most important urban centers, as well as close proximity to other vessels, land lines of communications, and oil and gas pipelines.82 To prevent such a threat, the Department of Defense, Department of Homeland Security, and law enforcement agencies at the state and federal levels expend enormous resources to monitor any foreign vessels that enter the U.S. from abroad.83 The same is not the case for U.S. vessels and their crews engaged in the movement of goods or the provision of services solely within U.S. waters, where laws and regulations governing ships involved in cabotage are far less demanding.84 Without the Jones Act, the federal government, as well as the state and local governments with which it collaborates, would have to either increase the budgets of those regulatory agencies, or accept the enhanced national security threat that they might bring.

Rejoinder to Arguments Against Jones Act Reform

Rejoinder to Benefits of the Act to the Domestic Shipping Industry

The argument for the Jones Act based on its benefits to the American shipping industry goes against the weight of the economic evidence. Insofar as proponents of the Jones Act concede that foreign vessels would outcompete domestic ones, they are also admitting that there would be benefits to all the consumers who enjoy less shipping price passed on to them in turn. Indeed, foreign vessels would outcompete domestic ones because of their lower maintenance costs and longer trade routes that let each vessel spread its costs over a larger amount of cargo, making operating costs cheaper.85 Economists, including 100 percent of economists who responded to a University of Chicago survey, tend to agree as a general rule that the macroeconomic benefit of these sorts of cheaper prices for consumers will outweigh the benefit of protecting a domestic industry.86

Rejoinder to Benefits of the Act to National Security

The argument for the Jones Act from national security is plainly outdated. As noted above, only 91 large Jones Act vessels exist.

While Operation Iraqi Freedom—hardly a moment in recent history that should serve as a model for the future—might seem to indicate that the Jones Act fleet can play a continuing role in military operations, the United States’ previous military engagement with Iraq prove it unnecessary: during the Persian Gulf war, 85 percent of dry-cargo ships chartered by the United States Military Sealift Command were foreign-flagged.87 Indeed, the Department of Defense itself has stated that the when the Military Sealift Command “has a requirement to charter a vessel, nearly all of the offers are for foreign-built ships.”88 Jones Act defenders need not fret, then, about who would carry American military cargo to battle without a strong American merchant marine: foreign ships already do it.

Finally, the suggestion that foreign vessels bring with them terrorism sounds alarming but has little factual basis. There have been thousands of foreign ships per year docked in U.S. ports since 2001 without a single terrorist incident tied to them.89 Additionally, the suggestion that foreign crewmembers will be able to enter the U.S. without breaks, enabling terrorist infiltration, is erroneous. A strict system for airplane crewmember visas already exists90 and has worked continuously to keep Americans safe. Congress could use that same system for post-Jones Act maritime crews.

Conclusion

Reform Proposals

The expiration of the Maria waiver despite ongoing relief efforts in Puerto Rico have prompted calls for sweeping Jones Act reform.91 These proposals include a modernization of the Act’s language so that the Executive can issue waivers more broadly,92 Rep. Nydia Velazquez (D-NY)’s more limited proposal for a full-year Jones Act waiver for Puerto Rico,93 Senators John McCain (R-AZ) and Mike Lee (R-UT)’s introduced legislation to permanently exempt Puerto Rico from the Jones Act,94 and a full repeal of the Act.95

North Carolina State Professor Emeritus Thomas Grennes floated several more methodologically complex reform ideas in his recent analysis of the Jones Act for the Mercatus Center. They include a repeal of the Jones Act paired with a subsidy for the production of domestic vessels and a temporary but complete repeal with an evaluation of the effects of the repeal after it sunsets, and then a revote in Congress on the issue.96

Evaluating the Issue

The Jones Act is a law whose time has passed. It puts American industrial transportation in a chokehold of unnaturally high prices that are felt both by consumers and American industries that struggle to compete with foreign corporations not subject to the same regulations. While subjecting Americans, especially Puerto Ricans, to harsher economic conditions, it does little to support one specific interest group—the shipping industry—while doing even less to aid national security in a modern context. The Jones Act is disadvantageous for the same reason that all tariffs are; they inevitably harm a wider range of interests than they help.97 The dwindling size of the Jones Act fleet and the essential early days of response that Hurricane Maria put on display make the reality of America’s shipping problem abundantly clear: it is not worth keeping a law on the books to waive it every time it becomes relevant. The time it takes the legislative or bureaucratic processes to act during crises are not worth meager, if existent, protections that the Act offers.

Congress would be well advised to implement a full and permanent repeal of the Merchant Marine Act to help move American transportation into the 21st century, American industry into a more competitive market standing, and Puerto Rico into a more viable economic condition •

References

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  3. George Washington, “Second Annual Address to Congress,” The American Presidency Project, December 8, 1790, accessed October 30, 2017, http://www.presidency.ucsb.edu/ws/index.php?pid=29432.
  4. John Adams, quoted in Tony Munoz, “Senator John McCain Leaves Washington,” June 29, 2010, accessed October 30, 2017, http://www.maritime-executive.com/article/mr-mccain-leaveswashington.
  5. Thomas Jefferson, quoted in “Annual Report of the Commissioner of Navigation,” (Washington: Government Printing Office, 1911), 26.
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  8. Matthew Yglesias, “The Jones Act, The Obscure 1920 Shipping Regulation Strangling Puerto Rico, Explained,” Vox, October 9, 2017, accessed November 12, 2017, https://www.vox.com/policy-and-politics/2017/9/27/16373484/jones-act-puerto-rico; and Elizabeth Chuck, “What Is the Jones Act? Opponents to 1920 Law Argue It’s Worsening Puerto Rico’s Crisis,” NBC News, September 28, 2017, accessed November 12, 2017, https://www.nbcnews.com/storyline/puerto-rico-crisis/what-jones-act-opponents-1920-law-argue-it-s-worsening-n805101. Additionally, Senator Wesley Jones had added incentive to pass the Merchant Marine Act as a representative of Washington state: The Act effectively created a monopoly for Seattle shipping companies that served Alaska. See Ivan L. Ascott, “The Alaska Statehood Act,” Seattle University Law Review, 27 (2004): 999-1034.
  9. In fact, the Act also includes certain provisions for the protection of seamen’s rights against their employers. See 46 U.S.C. 30104 (2006).
  10. Cabotage, in terms of what shipping is covered by the Jones Act, includes all trade between ports in the U.S. mainland, Alaska, Hawaii, and Puerto Rico. Guam is excluded from the Jones Act but covered by subsequent, similar legislation, and the U.S. Virgin Islands have been specifically exempt since 1922. See “Jones Act,” Transportation Institute, 2016, accessed November 12, 2017, https://transportationinstitute.org/jones-act/; and Henry Grabar, “We’ll Know Congress Is Serious About Helping Puerto Rico if It Axes This Obscure Shipping Law,” Slate, September 25, 2017, accessed November 12, 2017, https://slate.com/business/2017/09/congress-should-waive-the-jones-act-to-help-puerto-rico.html.
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  13. Ibid.
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  15. Grennes, supra note 11, and “U.S.-Flag Waterborne Domestic Trade and Related Programs,” Maritime Administration, accessed November 12, 2017, https://www.marad.dot.gov/ships-and-shipping/domestic-shipping/. For the full statute, see 46 U.S.C. 12121 (2006).
  16. “U.S.-Flag Waterborne Domestic Trade and Related Programs.”
  17. Jonathan Waldron, “How Difficult is it to Obtain a Jones Act Waiver?” Marine News, November 25, 2014, accessed November 12, 2017, https://www.marinelink.com/news/difficult-obtain-waiver381431.
  18. 46 U.S.C. 501 (2006).
  19. Waldron, supra note 17.
  20. U.S. Code, supra note 18.
  21. Waldron, supra note 17.
  22. U.S. Code, supra note 18.
  23. Waldron, supra note 17.
  24. Joseph M. Conley, “The Jones Act: Its Effect on the U.S. Response to the 2010 BP Deepwater Horizon Oil Spill and Its Relevance in International Law,” Washington University Global Studies Law Review, 11 (2012): 151-169.
  25. U.S. National Archives and Records Administration, Office of the Federal Register, “Waiver of Compliance with Navigation and Inspection Laws,” Federal Register 70, no. 172 (December 8, 2005): 53236-53237.
  26. Ibid.
  27. See “Joseph M. Conley,” Shukat Arrow Hafer Weber & Herbsman, LLP, accessed November 12, 2017, https://musiclaw.com/joseph-m-conley/.
  28. Conley, supra note 24.
  29. Ibid.
  30. Waldron, supra note 17.
  31. Kevin O’Shea, Rebecca Haffenden, and Karen Guziel, “Jones Act Resilience Considerations,” George Mason University Center for Infrastructure Protection and Homeland Security, Decemeber 11, 2015, accessed November 12, 2017, https://cip.gmu.edu/2015/12/11/jones-act-resilience-considerations/.
  32. Keli’i Akina, “Hurricanes Irma, Harvey Prove the Need to Reform the Jones Act,” The Hill, September 15, 2017, accessed November 12, 2017, http://thehill.com/opinion/international/350666-hurricanes-irma-harvey-prove-the-need-to-reform-the-jones-act.
  33. Brian Resnick and Eliza Barclay, “What Every American Needs to Know About Puerto Rico’s Hurricane Disaster,” Vox, October 16, 2017, November 12, 2017, https://www.vox.com/science-and-health/2017/9/26/16365994/hurricane-maria-2017-puerto-rico-san-juan-humanitarian-disaster-electricty-fuel-flights-facts.
  34. Frances Robles and Luis FerréSadurní, “Puerto Rico’s Agriculture and Farmers Decimated by Maria,” New York Times, September 24, 2017, accessed November 12, 2017,
  35. Danica Coto and David Koenig, “Prolonged Power Outage Will Have Long-Lasting Impact on Puerto Rico,” Associated Press, September 25, 2017, accessed November 12, 2017, http://www.pressherald.com/2017/09/25/hot-isolated-and-running-out-of-supplies-parts-of-puerto-rico-near-desperation/.
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  37. Resnick and Barclay, supra note 33.
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  40. Danica Coto, “US withholds hurricane emergency loan sought by Puerto Rico,” Associated Press, January 17, 2018, accessed January 19, 2018, http://abcnews.go.com/International/wireStory/us-withholds-hurricane-emergency-loan-sought-puerto-rico-52416376.
  41. “Storms to Challenge Puerto Rico, Virgin Islands’ Credit Quality: Moody’s,” October 3, 2017, accessed November 12, 2017, https://www.reuters.com/article/us-moody-s-storm/storms-to-challenge-puerto-rico-virgin-islands-credit-quality-moodys-idUSKCN1C82IA.
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  43. John Bowden, “Trump ‘Thinking About’ Lifting Jones Act to Help Puerto Rico,” The Hill, September 27, 2017, accessed November 12, 2017, http://thehill.com/homenews/administration/352707-trump-thinking-about-lifting-jones-act-to-help-puerto-rico.
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  45. Elaine C. Duke, “Waiver of Compliance with Navigation Laws,” Department of Homeland Security, September 28, 2017, accessed January 19, 2018, https://www.dhs.gov/sites/default/files/publications/17_0928_AS1_Jones-Act-Waiver.pdf
  46. http://thehill.com/latino/354561-white-house-lets-jones-act-waiver-expire-for-puerto-rico.
  47. Niraj Choksi, “Would Repealing the Jones Act Help Puerto Rico?” The New York Times, October 24, 2017, accessed November 12, 2017 https://www.nytimes.com/2017/10/24/us/jones-act-puerto-rico.html.
  48. Grennes, supra note 11.
  49. Marc Scribner, “No Reason for Denying Puerto Rico a Jones Act Waiver,” Competitive Enterprise Institute, September 27, 2017, accessed January 19, 2018 https://cei.org/blog/no-reason-denying-puerto-rico-jones-act-waiver.
  50. Grennes, supra note 11.
  51. Jaison Abel, Jason Bram, Richard Deitz, Thomas Klitgaard, and James Orr, “Report on the Competitiveness of Puerto Rico’s Economy,” Federal Reserve Bank of New York, June 29, 2012, accessed January 18, 2018,
  52. Anne O. Krueger, Ranjit Teja, and Anrdrew Wolfe, Government Development Bank of Puerto Rico, June 29, 2015, accessed January 18, 2018, http://www.gdbpr.com/documents/PuertoRicoAWayForward.pdf.
  53. Ed Morales, “Puerto Rico’s Soaring Cost of Living, From Giant Electric Bills to $5 cornflakes,” The Guardian, July 12, 2015, accessed January 16, 2018, https://www.theguardian.com/world/2015/jul/12/puerto-rico-cost-of-living.
  54. Richard J. Cebula and Michael Toma, “An Empirical Analysis of Determinants of Interstate Living-Cost Differentials, 2005,” Journal of Regional Analysis and Policy, Vol. 38, No. 3 (2008), pp. 222-228.
  55. Ibid.
  56. Suzanne Gamboa, “Hurricane Maria is Hitting Puerto Ricans in their Pocket Books,” NBC News, October 28, 2017, accessed January 16, 2018, https://www.nbcnews.com/storyline/puerto-rico-crisis/hurricane-maria-hitting-puerto-ricans-their-pocketbook-n815161.
  57. Nelson A. Denis, “The Jones Act: The Law Strangling Puerto Rico,” The New York Times, September 25, 2017, accessed January 16, 2018, https://nyti.ms/2yoLLu5.
  58. Russ Kashian, Jeff Pagel, and Ike Brannon, “The Jones Act in Perspective: A survey of costs and effects of the 1920 Merchant Marine Act,” 2017, accessed January 16, 2018, http://assets.grassrootinstitute.org/wp-content/uploads/2017/04/Jones-Act-Final-4-8-17.pdf.
  59. Ibid.
  60. Erik Olsen, “An Arcane American Law Protected by Powerful Interests Is Causing Insane Traffic Jams,” Quartz August 7, 2017, accessed January 16, 2018, https://qz.com/1032288/how-a-100-year-old-american-law-helps-make-your-commute-miserable/.
  61. John Curtis Perry, et al, “America’s Deep Blue Highway: How Coastal Shipping Could Reduce Traffic Congestion, Lower Pollution, And Bolster National Security,” Institute for Global Maritime Studies, September 2008, accessed January 16, 2018, http://www.igms.org/sites/default/files/publishedworks/americas_deep_blue_highway_IGMS_report_sept_2008.pdf.
  62. Olsen, supra note 60.
  63. Perry et al., supra note 61.
  64. Justin Lewis, “Veiled Waters: Examining the Jones Act’s Consumer Welfare Effects,” Issues in Political Economy, vol. 22 (2013): 77-107.
  65. Kashian, Pagel, and Brannon, supra note 58.
  66. Keli’i Akina, “How the Jones Act Drives Up the Cost of Food and Gasoline for Millions of Americans,” The Hill, April 10, 2017, accessed January 16, 2018, http://thehill.com/blogs/pundits-blog/international/328025-how-the-jones-
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  68. Joseph F. Francois, Hugh M. Arce, Kenneth A. Reinert and Joseph E. Flynn, “Commercial Policy and the Domestic Carrying Trade,” The Canadian Journal of Economics, Vol. 29, No. 1 (February 1996), pp. 181-198.
  69. Lee Fang, “U.S. Shipping Lobby: Letting Foreign Ships Bring Goods to Puerto Rico Could Endanger National Security,” September 28, 2017, accessed January 16, 2018, https://theintercept.com/2017/09/28/u-s-shipping-lobby-letting-foreign-ships-bring-goods-to-puerto-rico-could-endanger-national-security/.
  70. Daniel Goure, “The Contribution of the Jones Act to U.S. Security,” Lexington Institute, October 2011, accessed January 16, 2018, http://www.lexingtoninstitute.org/wp-content/uploads/2013/11/Contribution_of_the_Jones_Act.pdf.
  71. Samuel A. Giberga, “The Jones Act Ensures a U.S. Merchant Fleet,” June 6, 2016, accessed January 16, 2018, https://www.wsj.com/articles/the-jones-act-ensures-a-u-s-merchant-fleet-1465242549.
  72. Stephen Baker, et al, “National Security Assesment of the U.S. Shipbuilding and Repair Industry,” U.S. Department of Commerce Bureau of Export Administration Office of Strategic Industries and Economic Security Strategic Analysis Division, May 2001, accessed January 20, 2018, https://www.bis.doc.gov/index.php/forms-documents/technology-evaluation/56-national-security-assessment-of-the-u-s-shipbuilding-and-repair-industry-2001/file.
  73. William Turley, “High Employment, Low Costs, and Other Economic Benefits of the Jones Act,” The Turley and Mara Law Firm, accessed January 18, 2018, http://www.turleylawfirm.com/library/in-what-ways-does-the-jones-act-benefit-the-u-s-economy-.cfm.
  74. Ibid.
  75. “Jones Act,” supra note 10.
  76. Ibid.
  77. Ibid.
  78. Goure, “The Contribution of the Jones Act to U.S. Security,” supra note 70.
  79. Daniel Goure, “The Jones Act and Homeland Security in the 21st Century,” Lexington Institute, June 2016, accessed January 20, 2018. http://www.lexingtoninstitute.org/wp-content/uploads/2016/08/Jones-Act-and-Homeland-Security.pdf.
  80. Ibid..
  81. Joseph Servidio, “Tenth Anniversary of the Maritime Transportation Security Act: Are We Safer?” September 11, 2012, accessed January 16, 2018, https://www.dhs.gov/news/2012/09/11/written-testimony-us-coast-guard-house-transportation-and-infrastructure.
  82. Goure, “The Jones Act and Homeland Security in the 21st Century,” supra note 79.
  83. Ibid.
  84. Ibid.
  85. “Comparison of U.S. And Foreign‐Flag Operating Costs,” U.S. Department of Transportation Maritime Administration, September 2011, accessed January 16, 2018, https://www.marad.dot.gov/wp-content/uploads/pdf/Comparison_of_US_and_Foreign_Flag_Operating_Costs.pdf.
  86. “Import Duties,” The Initiative on Global Markets, October 4, 2016, accessed January 16, 2018, http://www.igmchicago.org/surveys/import-duties and Robert Z. Lawrence and Robert E. Litan, “Why Protectionism Doesn’t Pay,” Harvard Business Review, May 1987, accessed January 16, 2018, https://hbr.org/1987/05/why-protectionism-doesnt-pay.
  87. Gary Galles, “Little-Known Laws that Cripple American Trade,” Mises Institute, March 3, 2015, accessed January 16, 2018, https://mises.org/library/little-known-laws-cripple-american-trade.
  88. Ronald O’Rourke, “DOD Leases of Foreign-Built Ships: Background for Congress,” Congressional Research Service, May 28, 2010, accessed January 16, 2018, https://fas.org/sgp/crs/weapons/RS22454.pdf.
  89. Ronald O’Rourke, “DOD Leases of Foreign-Built Ships: Background for Congress,” Congressional Research Service, May 28, 2010, accessed January 16, 2018, https://fas.org/sgp/crs/weapons/RS22454.pdf.
  90. William Murray, “End Protectionism in the Shipping Industry,” RealClearPolicy, July 22, 2017, accessed January 20, 2018, http://www.realclearpolicy.com/articles/2017/07/22/end_protectionism_in_the_shipping_industry.html.
  91. “Crewmember Visa,” U.S. Department of State Bureau of Consular Affairs, accessed January 20, 2018, https://travel.state.gov/content/travel/en/us-visas/other-visa-categories/crewmember-visa.html.
  92. Choksi, supra note 47.
  93. Akina, “Hurricanes Irma, Harvey Prove the Need to Reform the Jones Act,” supra note 32.
  94. David A. Graham, “Is the Jones Act Waiver All Politics?” The Atlantic, September 28, 2017, accessed January 16, 2018, https://www.theatlantic.com/politics/archive/2017/09/jones-act-waiver-puerto-rico-trump/541398/.
  95. McCain & Lee Introduce Legislation to Permanently Exempt Puerto Rico From the Jones Act,” Office of Senator John McCain, September 28, 2017, accessed January 18, 2018, https://www.mccain.senate.gov/public/index.cfm/2017/9/mccain-lee-introduce-legislation-to-permanently-exempt-puerto-rico-from-the-jones-act.
  96. Philip Rossetti and Jacqueline Varas, “American Should Repeal the Jones Act,” The Hill, October 9, 2017, accessed January 18, 2018, http://thehill.com/opinion/international/354529-america-should-repeal-the-jones-act.
  97. Grennes, supra note 11.
  98. Gary Clyde Hufbauer and Sean Lowry, “US Tire Tariffs: Saving Few Jobs at High Cost,” Peterson Institute for International Economics, April 2012, accessed January 16, 2018, https://piie.com/publications/pb/pb12-9.pdf.

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