Thursday, March 28, 2024
Hawai'i Free Press

Current Articles | Archives

Tuesday, May 9, 2017
Will the regulatory state strangle waterborne shipping in the U.S.?
By Michael Hansen @ 1:03 AM :: 4217 Views :: Jones Act

Will the regulatory state strangle waterborne shipping in the U.S.?

by Michael Hansen, Hawaii Shippers Council, May 8, 2017

The Mercatus Center at George Mason University published on May 2, 2017, an academic report, “The Jones Act and the Growth of Regulatory Barriers in the US Shipping Industry,” written by Nita Ghei, the senior policy research editor for the Mercatus Center at George Mason University.

Ms. Ghei takes an interesting approach by using a specialized computer program to track the increase in U.S. federal laws and regulations mentioning keywords denoting waterborne shipping and applicable restriction.

The paper was written for the Mercatus Center’s Program on the American Economy and Globalization (PAEG)’s Policy Research Seminar on Researchers’ and Stakeholders’ Views on the Jones Act,” held on April 13, 2017, at the Sheraton Mau, Kaanapali Beach. Ms. Ghei presented a summary of her paper at the seminar.

Ms. Ghei’s analysis found that U.S. federal laws and regulations impacting waterborne shipping increased approximately 200% from 1970 to 2014.

Of course, because of the very broad nature of the screens, not all of the increase in laws and regulations would be considered related to the Jones Act and other maritime cabotage provisions formally known in American jurisprudence as the “coastwise laws of the U.S.” And, in fact, most of the increase probably has to do with customs entry and national security concerns, especially as most of the coastwise laws have been in place since the last federal Merchant Marine Act was enacted in 1970. However, it does show the impact of regulation on marine transportation.

Nita Ghei

Nita Ghei is the senior policy research editor for the Mercatus Center at George Mason University. Prior to coming to Mercatus, Nita Ghei was at the Cato Institute. Previously, she was on the faculty of George Mason University School of Law and Northwestern University Law School, following a clerkship at the Maryland Court of Appeals (the state’s highest court). Before going to law school, Nita was a member of the editorial board at the Economics Times in New Delhi, after working at the World Bank in Washington, DC. Born in India, Nita received her Ph.D. in Economics from the University of Maryland, College Park, and her J.D. from George Mason School of Law. She graduated from Delhi University with a B.A. (Honors) degree in Economics. Nita writes a weekly column for the Washington Times, and has published op-eds in Newsweek, the Philadelphia Inquirer, the Star-Ledger, the Daily Caller, and other news outlets. Her scholarly articles have been cited in the Harvard Law Review and other journals.

Key excerpts:

One way to estimate regulatory restrictions is provided by RegData—a text analysis computer program capable of scanning extensive legal text—developed by researchers at the Mercatus Center at George Mason University. RegData allows identification of regulations relevant to the shipping industry by connecting relevant keywords with restriction counts. Restrictions are words and phrases like “shall,” “must,” “may not,” “prohibited,” and “required” that signal legal constraints and obligations. The chart plots the number of restrictions reduced to an index normalized to equal 100 in 1994, the year when the North American Free Trade Agreement (NAFTA) went into effect and the treaty of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) was signed.

Restrictions on the shipping industry have grown from just over 27,000 words and phrases in 1970 to over 761,000 by 2014. The number of restrictions grew from just over 300 to almost 8,000 in the same time period, an increase of over 2,400 percent. The growth has been uneven, with greater spurts in certain time periods. The ratification of trade treaties that lowered barriers to trade overall seems to be positively associated with increases in restrictions on the shipping industry, with significant jumps at the end of the Tokyo Round of the GATT in 1979 (over 30 percent) and in 1994 at the time of ratification of NAFTA and the end of the Uruguay Round of the GATT (in the range of 15 percent). These findings are consistent with efforts by US trade negotiators to protect the Jones Act from being included in multilateral trade agreements.

These regulations provide the domestic shipping industry with significant protection from foreign competition—but that is not all this regulation accomplishes. The burden of complying with the bewildering array of regulations also keeps new market entrants from competing with existing firms. This decreases the incentive for existing firms to innovate to lower costs, hampering the US shipping industry’s ability to remain competitive in global markets.

Furthermore, there is little evidence to suggest that the Jones Act and similar burdensome legislation enhance national security — which is an express goal of protecting the domestic shipbuilding industry. US shipbuilders are notorious for not just high costs generally, but also for long delays and huge cost overruns on naval ships.

The Jones Act, and the vast array of regulations to enforce the statute, increase waterborne transportation costs, resulting in higher costs for American consumers and lost opportunities for American businesses—all with questionable success in achieving the law’s goal of improving national security.

Read: The Jones Act and the Growth of Regulatory Barriers in the US Shipping Industry

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

808 Silent Majority

Aloha Pregnancy Care Center

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Ballotpedia Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii

FIRE

Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Habele.org

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii ConCon Info

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together

HIEC.Coop

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Moms for Liberty

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

July 4 in Hawaii

Kakaako Cares

Keep Hawaii's Heroes

Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui

MentalIllnessPolicy.org

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

Natatorium.org

National Christian Foundation Hawaii

National Parents Org Hawaii

NFIB Hawaii News

No GMO Means No Aloha

Not Dead Yet, Hawaii

NRA-ILA Hawaii

Oahu Alternative Transport

Obookiah

OHA Lies

Opt Out Today

OurFutureHawaii.com

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Practical Policy Institute of Hawaii

Pritchett Cartoons

Pro-GMO Hawaii

P.U.E.O.

RailRipoff.com

Rental by Owner Awareness Assn

ReRoute the Rail

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

School Choice in Hawaii

SenatorFong.com

Sink the Jones Act

Statehood for Guam

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

UCC Truths

US Tax Foundation Hawaii Info

VAREP Honolulu

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii

Yes2TMT