A Bloomberg Report states how the Jones Act is hurting Puerto Rico economically and needs to be changed. Currently, Puerto Rico, in the aftermath of Hurricane Maria that made landfall as a Category 4 storm, is having significant difficulty in keeping its economy afloat. There has been a mass exodus of residents, with many of them going to Florida. There has also been a major slowdown in tourism dollars, which has hurt the economy, as well.
On top of this, the Jones Act hurts Puerto Rico, especially now that the country is in a difficult financial situation.
The Merchant Marine Act of 1920, known as the Jones Act for Senator Wesley Jones, one of the major proponents of the bill, is a bill that legislates many issues with respect to maritime law. The purpose of the law, as stated in its preamble, is: “It is necessary for the national defense and for the proper growth of its foreign and domestic commerce that the United States shall have a merchant marine of the best equipped and most suitable types of vessels sufficient to carry the greater portion of its commerce and serve as a naval or military auxiliary in time of war or national emergency, ultimately to be owned and operated privately by citizens of the United States; and it is declared to be the policy of the United States to do whatever may be necessary to develop and encourage the maintenance of such a merchant marine, and, in so far as may not be inconsistent with the express provisions of this Act, the Secretary of Transportation shall, in the disposition of vessels and shipping property as hereinafter provided, in the making of rules and regulations, and in the administration of the shipping laws keep always in view this purpose and object as the primary end to be attained.”
As mentioned in its preamble, the purpose of the Jones Act was to build up the U.S. merchant marine. The Jones Act requires that shipping between the U.S. mainland and Puerto Rico be U.S.-built and U.S.-flagged. By regulating the maritime industry in this way, the U.S. would be compelled to expand its ship building industry and be compelled to train and pay U.S. crews.
Many, including Arizona Senator John McCain, criticized the continued use of the Jones Act as antiquated and economically self-defeating. While the Jones Act may have been important in 1920, according to critics, it has no place in the current economy because it hurts American interests by making shipping items more expensive. They claim that it is protectionist for the American shipbuilding industry, which should compete like any other industry.
Those who support the continued use of the Jones Act claim that it is critical to continue having American-built ships so there is proper protection of the coasts. While such ships are more expensive, they are better and required for national security.
Should national security interests trump economic issues in Puerto Rico? Is it national security? Or is Puerto Rico going to suffer because of antiquated protectionist policies?
Involved in the maritime business? Contact the Kolodny firm, experienced maritime lawyers.
(image courtesy of Justin Lynch)