A protectionist law is actually hindering trade within the United States, according to a new report by Heritage Foundation experts Brian Slattery, Bryan Riley and Nicolas Loris.
The Merchant Marine Act of 1920, more commonly referred to as the Jones Act, requires that any goods shipped by water between two points in the U.S. must be transported aboard a U.S.-built and U.S.-flagged ship with a crew composed at least 75% by Americans:
The Jones Act undermines U.S. economic competitiveness in a number of ways. For example, U.S.-built, U.S.-owned, and U.S.-crewed vessels have dramatically higher operating costs than other options available to shippers. U.S.-flagged container ships and tankers spend over four times as much as foreign vessels on crewing expenditures. Jones Act ships also have higher maintenance costs, and it is more costly to repair and maintain vessels in domestic shipyards compared to foreign ones. Repair and routine work on U.S. tankers costs almost 70 percent more than comparable work on foreign tankers. Foreign vessels have longer trade routes and can spread their costs over a larger amount of cargo, making operating costs cheaper. As indicated by a March 2013 Government Accountability Office (GAO) study, foreign vessels that operate in a global marketplace have the flexibility to adjust their capacity to meet changing markets.
Do you think the Jones Act should be repealed?