Tuesday, June 25, 2019
Hawai'i Free Press

Current Articles | Archives

Thursday, July 19, 2018
Grassroot Institute gives feds input on Jones Act
By Keli'i Akina PhD @ 12:20 PM :: 1357 Views :: Jones Act

Grassroot Institute gives feds input on Jones Act

From Grassroot Institute of Hawaii, July 19, 2018

The Grassroot Institute of Hawaii this week responded to a request by the U.S. Office of Management and Budget for public input about the controversial Jones Act, the century-old body of federal maritime regulations that restricts competition in ocean cargo shipping and imposes higher costs on businesses, consumers and the economy.

The comments, presented below, were submitted by Grassroot Institute President, Keli’i Akina, Ph.D.

*****************************

July 16, 2018

VIA Federal Rulemaking Portal at http://www.regulations.gov

Shannon Joyce
Desk Officer for Federal Maritime Commission
Office of Information and Regulatory Affairs
725 17th Street, NW
Washington, DC 20503

RE: Maritime Regulatory Reform RFI

Dear Ms. Joyce,

When it comes to looking for ways to decrease the regulatory burden on businesses while increasing efficiency and helping the economy, there is one set of maritime regulations and laws that costs consumers and businesses millions of dollars every year.

Even a simple update to the most archaic portions of this century-old statute could reap benefits nationwide.

I am referring to the Jones Act, also known as the Merchant Marine Act of 1920.

The Jones Act requires that goods shipped between U.S. ports be carried on vessels built and flagged in the U.S. that are crewed predominantly by Americans.

This means higher shipping costs for American business owners and consumers, since the Jones Act bars foreign competition between U.S. ports while forcing U.S. ocean cargo carriers to buy more expensive U.S.-built ships and use more expensive American crews.

In U.S. states and territories that are highly dependent on shipping, such as Hawaii, the heightened costs of the Jones Act can be a huge barrier to small businesses. The premium paid to operate in Hawaii’s near-monopoly shipping market might be easier for larger corporations to cope with, but smaller companies not so much.

Stories of Jones Act difficulties for Hawaii businesses abound. For example, The French Gourmet, a 1997 SBA “Exporter of the Year” was forced to close its doors in 2012. The owner said the company’s shipping costs had nearly tripled in three years, making it infeasible to continue operating. Because the Jones Act limited the company’s shipping options, there was no way for them to continue.

Efforts to quantify its economic impact on states and territories that are basically held hostage by the Jones Act — such as Puerto Rico, Alaska and Hawaii — have put the figure at between $5
billion and $15 billion annually. But the Jones Act is a problem for all states that rely upon imports and exports carried by ship between U.S. ports.

Because of the Jones Act, it is cheaper for American livestock farmers to buy grain overseas than from U.S. suppliers. Companies on the East Coast cannot afford to get lumber from the
Pacific Northwest. And transporting oil from Texas to New England is approximately three times more expensive than shipping it to Europe.

What we seek is to bring the Jones Act in line with the 21st century — and thereby eliminate a burden on small business, consumers and the economy.

The most efficient way to update the Act would be to amend Section 46 USC 12112 and repeal the requirement that a vessel be (1) U.S.-owned under Section 46 USC 12103 and (2) U.S.-built.

Also repealed would be provisions under this section that create exemptions to the build requirement for vessels captured in war, forfeited for a breach of U.S. law, and wrecked on a U.S. coast under section 46 USC 12107. (Removing the build requirement makes these exemptions superfluous.)

Paragraph (a) of Section 12112 would be replaced with an authorization for the U.S. Coast Guard to issue coastwise endorsements to vessels that qualify in terms of safety and security.

This change would require a few conforming amendments, including:

>> Removing the wrecked vessel provision from 46 USC 3703a (c) (1) (C).

>> Liberalizing a foreign-build exemption in Section 46 USC 12120 regarding liquefied gas carriers in the Puerto Rico trade.

>> Eliminating Section 46 USC 12112 requirements from Section 46 USC 12121 relating to small passenger vessels.

>> Deleting Section 46 USC 12132 in order to eliminate the foreign-ownership, foreign-registry and foreign-rebuilding causes for loss of coastwise privileges.

Removing the U.S. build requirements of the Jones Act might affect the U.S. ownership requirement, but that provision would still exist in Section 46 USC 12103 and could be clarified further via legislation and regulatory action.

An act of Congress would be required to take decisive action on the Jones Act, but the Act also has deep roots in the regulatory world that would need action from multiple federal agencies. For example, the U.S. Department of Homeland Security and U.S. Coast Guard handle documentation and authorization of the vessels in question, while U.S. Customs and Border Protection, in addition to issuing rulings and regulations on the Act, has created a special office to deal with Jones Act issues: the Jones Act Division of Enforcement.

The Jones Act has outlived its usefulness in national defense and now operates primarily as a protectionist scheme that benefits the shipping industry at the expense of businesses and consumers. It is time we brought it up to date.

Thank you for your time and consideration.

The Grassroot Institute of Hawaii would be happy to provide additional information and assistance on issues related to the Jones Act and its economic effects.

Sincerely,

Keli‘i Akina, Ph.D.
President, Grassroot Institute of Hawaii

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

808 Silent Majority

808 State Update AM940

ABCDEFG Blog

ACA Signups Hawaii

ACCE

Affordable Hawaii Coalition

ALEC

Alliance Defending Freedom

Aloha Conservative Alliance

Aloha Life Advocates

Aloha Pregnancy Care Center

American Council of Trustees and Alumni

American Mothers of Hawaii

AMVETS-Hawaii

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Audit The Rail

Ballotpedia Hawaii

Better Hawaii 

Blaisdell Memorial Project

Broken Trust

CAFR Hawaii

Castaway Conservative

Children's Alliance Hawaii

Children's Rights Institute

Christian Homeschoolers of Hawaii

Citizens for Recall

Cliff Slater's Second Opinion

Coffee Break

Conservative Forum for Hawaii

CSIS Pacific Forum

DAR Hawaii

DeedySupport.com

DVids Hawaii

E Hana Kakou Kelii Akina

E Māua Ola i Moku o Keawe

Farmers For Choice Hawaii

FIRE

Fix Oahu!

Follow the Money Hawaii

Frank in Hawaii

Front Page Magazine

Frontline: The Fixers

Genetic Literacy Project

Get Off Your Butts!

God, Freedom, America

Grassroot Institute

Habele.org

Hawaii Aganst Assisted Suicide

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii Coalition Against Legalized Gambling

Hawaii ConCon Info

Hawaii Credit Union Watch

Hawaii Crime Victims' Rights

Hawaii Crop Improvement Association

Hawaii Debt Clock

Hawaii Defending Marriage

Hawaii Defense Foundation

Hawaii Families for Educational Choice

Hawaii Family Advocates

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii Firearm Community

Hawaii Fishermen's Alliance

Hawaii Future Project

Hawaii Gathering of Eagles

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii March for Life

Hawaii Meth Project

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Right to Life -- Big Island

Hawaii Right to Life -- Oahu

Hawaii Shield Law Coalition

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together

Heritage Foundation

HI Coalition Against Legalized Gambling

HIEC.Coop 

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Homeless Crisis

Honolulu Navy League

Honolulu Traffic

Horns of Jericho Blog

House Minority Blog

House Republican Caucus YouTube

HPACC

Hump Day Report

I Vote Hawaii

If Hawaii News

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

Iowa Meets Maui

Jackson v Abercrombie

Jihad Watch

Judgepedia Hawaii

July 4 in Hawaii

Kahle v New Hope

Kakaako Cares

Kau TEA Party

Kauai Co GOP

Keep Hawaii's Heroes

KeyWiki

Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Malulani Foundation

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui

Mauna Kea Recreational Users Group

MentalIllnessPolicy.org

Middle East Forum--The Legal Project

Mililani Conservatives for Change

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

Muslim Brotherhood in America

NAMI Hawaii

NARTH

Natatorium.org

National Christian Foundation Hawaii

National Parents Org Hawaii

National Wind Watch

New Zeal

NFIB Hawaii News

No GMO Means No Aloha

Northwest Economic Policy Seminar

Not Dead Yet, Hawaii

Now What I Really Think

NRA-ILA Hawaii

Oahu Alternative Transport

ObamaCare Abortion Hawaii

Obookiah

OHA Lies

Opt Out Today

OurFutureHawaii.com

Pacific Aviation Museum

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Pritchett Cartoons 

Pro-GMO Hawaii

P.U.E.O.

RailRipoff.com

Rental by Owner Awareness Assn

Republican Party -- Hawaii State

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

Salvage The Rail

Save the Plastic Bag

School Choice in Hawaii

SenatorFong.com

SIFE Remington

SIFE W. Oahu 

Sink the Jones Act

Smart About Marijuana--Hawaii

St Marianne Cope

State Budget Solutions Hawaii

State Policy Network

Statehood for Guam

Tax Foundation of Hawaii

The Harriet Tubman Agenda

The Long War Journal

The Real Hanabusa

Time Out Honolulu

Truth About Trade & Technology - Hawaii

UCC Truths

Union Members Know Your Rights

US Tax Foundation Hawaii Info

Valor in the Pacific

VAREP Honolulu

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii

Yes2TMT