Could Congress Change the Jones Act to Accommodate the Puerto Rican Recovery?
Posted by World Trade Distribution
Filed Under: Container Freight
The tiny Caribbean island of Puerto Rico is still reeling from the massive flooding, power outages, food and medicine shortages, and other systemic damage left in the wake of Hurricane Maria. Unfortunately, the lack of intact infrastructure has made the recovery and rebuilding process difficult, and much work remains to be done.
Some advocates have turned their attention to the Jones Act, arguing that some of its restrictions and regulations have made the recovery process far more time-consuming and expensive than necessary. Others argue that the Jones Act is having no impact on the speed of the Puerto Rican recovery and any tweaks or changes in response to Hurricane Maria would be ill-advised.
Read on to learn more about some of the allegations by the agencies trying to transport fuel and supplies to Puerto Rico, as well as some of the temporary (or permanent) potential changes that could be made to the Jones Act in order to help Puerto Rican residents rebuild.
What is the Jones Act?
Also known as the Merchant Marine Act of 1920, the Jones Act states that all goods transported by water between ports in the U.S. be carried on U.S.-flag ships, which must be constructed in the U.S., owned by American citizens, and crewed by American citizens or United States permanent residents.
What Issues is the Jones Act Allegedly Causing?
Some officials on the Puerto Rico Oversight Board testified before Congress about the repeal of the Jones Act, arguing that it is increasing the cost of recovery for a territory already deeply in debt. (In fact, this Oversight Board was formed under the Obama administration to create solutions to Puerto Rico’s rising debt.)
For nearly a century, the Jones Act has prevented tankers from hauling oil between any two U.S. ports unless the vessels are as all-American as can be. The Jones Act requires these oil-hauling tankers to be made in America and manned by a crew made up of U.S. citizens and permanent residents.
Although President Trump temporarily suspended the Jones Act for 10 days in September and October 2017 to ensure fuel could be brought to Puerto Rico unencumbered, the law is now back in place. Members of the Oversight Board argue that the Jones Act is preventing the recovery from proceeding as smoothly as it could and costing Puerto Rico more money in the process.
What Changes May Come to the Jones Act?
Some lawmakers have pointed out the disparity between Puerto Rico, a U.S. territory that isn’t exempt from the Jones Act, and the U.S. Virgin Islands, a chain of nearby U.S.-controlled islands that is exempt from the Jones Act. Senator John McCain co-sponsored legislation that would carve out a permanent Jones Act exemption for Puerto Rico, but this bill is still moving through Congress.
However, the maritime lobby has strongly opposed this measure, arguing that it’s a permanent solution to a temporary issue. Although the Jones Act waiver was in place for 10 days, only a single ship actually took advantage of it to bring supplies to Puerto Rico. Lobbyists have also argued that the recovery is instead being slowed by the inability to transport food, fuel, and other items through the island, not the ability to get supplies to the island. Should lawmakers find this a compelling argument, the Jones Act is likely to stay in place without any change.