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Jones Act Foes Will Not Quit, Despite Failure To Make Case
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By MICHAEL R. McKAY
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The Jones Act is under attack once more.
The law, which holds domestic waterborne commerce for merchant vessels owned, built, flagged and manned in the U.S., was targeted by energy and agricultural interests in recent Congressional testimony.
In addition, the Jones Act was criticized by a conservative think tank in Washington, and by the nominal leader of a long-dormant repeal movement financed principally by U.S. and multinational farm conglomerates.
Consider these developments:
- The American Farm Bureau Federation proposed the use of foreign-owned, built, flagged and crewed vessels to carry agricultural products between and among U.S. ports.
Testifying before the House Agriculture Committee, Farm Bureau Federation President Bob Stallman said: "Removal of the Jones Act shipping restrictions will create another transportation mode to compete with rail, inland waterways, and trucking to the benefit of agricultural shippers."
This familiar proposal has failed before because most lawmakers understand the complex and expensive logistics of transshipping farm commodities from Midwest source points to the East Coast via the Mississippi River-Gulf of Mexico or the Great Lakes-St. Lawrence Seaway.
Agribusiness interests have no credibility here because it is widely known that their actual motive is not to encourage a waterborne transportation alternative to rail,but to force rail freight rate reductions through the threat of low-cost foreign-flag ship competition.
- In testimony before the House Energy and Air Quality Subcommittee, a trade association of heating oil distributors in the Northeast asked for a Jones Act waiver to allow foreign-flag tankers to replace U.S. tugs and barges between Gulf Coast ports and New York and between New York and Boston each winter. Such a waiver would apply "when pipeline systems are at capacity," the Petroleum Marketers Association of America said.
This is a new spin on an old tactic. Each winter, the heating oil distributors insist that there are too few Jones Act vessels to meet home heating oil demand, and each winter they are proven wrong. Now they say the problem is not inadequate Jones Act capacity, but inadequate pipeline capacity.
- The conservative Cato Institute renewed its call for Jones Act repeal, citing a 1993 International Trade Commission report that said the cabotage law is a drain on the domestic economy. The recommendation was included in a Cato policy handbook directed at the 107th Congress.
The ITC study has been thoroughly discredited as having relied on flawed data. Why do policy wonks with no practical experience in the real working world continue to dredge the study up when they know it will get them nowhere?
- Last, but certainly not least, was the return of none other than Donald R. "Rob" Quartel in March.
Speaking to the International Propeller Club in Tokyo, Japan--where the government hopes to nullify the Jones Act through the World Trade Organization--Quartel urged shippers to pressure the U.S. for Jones Act concessions in forthcoming multilateral service trade negotiations to be supervised by the WTO.
Quartel also called for the negotiated end of the Maritime Security Program that supports 47 U.S.-flag cargo ships in commercial foreign trade and elimination of the Federal Maritime Commission, the independent body empowered to respond to foreign policies and practices that discriminate against U.S.-flag ships in international liner trades.
Later, Quartel repeated his mantra in a letter to JoC Week, the successor publication to the daily Journal Of Commerce.
Quartel is remembered as the founder and president of the Jones Act "Reform" Coalition, established in April 1995 to represent U.S. and multinational farm, energy, mining, chemical and manufacturing conglomerates hoping to force immediate Jones Act repeal.
When the movement failed to earn support in Congress and the Executive Branch, Quartel and the coalition shifted gears, seeking to repeal only the "build American" requirement in the deep-sea and Great Lakes dry bulk, oil and petroleum product, lumber and livestock trades.
But that proposal also failed to draw significant support, and, in 1999, Quartel resigned as president of the coalition, which has since been inactive.
Despite the failures behind them, advocates of repealing, amending or waiving the Jones Act persist because they apparently believe the political climate is now favorable for effective movement against the law. But the Bush administration is on record in support of the Jones Act, which continues to enjoy broad bipartisan support in both the Senate and in the House.
U.S.-flag maritime interests, working in Washington through the Maritime Cabotage Task Force, have prevailed in the Jones Act debate because we have presented the facts applicable to each specific domestic trade. We have told the truth, and we'll do it again in the 107th Congress.
I am confident that the Jones Act will continue to stand on merit. But I ask all AMO members to help the law along by supporting the AMO Voluntary Political Action Fund, and by making their views known to their elected officials.
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