Jones Act Repeal Bill Introduced In Congress

Jones Act Repeal Bill Introduced In Congress

U.S. Fleet Threatened By Rep. Smith's Renewed Effort To Eliminate U.S. Cabotage Law

H.R.2046 Would Limit Recourse For Shipboard Injuries

      Legislation filed in the House would sink all domestic shipping laws and lower construction and operating standards for U.S.-flag vessels.
     The bill, H.R. 2046, would effectively repeal the Jones Act, the 1920 cabotage law that holds domestic waterborne cargo markets for merchant vessels owned, built, flagged and manned in the U.S.
     Also targeted in the measure are the Jones Act's passenger vessel equivalent, the Passenger Vessel Services Act of 1886, and separate cabotage statutes applying the U.S. ownership, construction, registry and crewing requirements in domestic towing, salvage and dredging markets.
     Introduced May 26 by Michigan Republican Rep. Nick Smith, H.R. 2046 would allow foreign-owned, documented and crewed cargo, passenger and service vessels to run between U.S. points along the U.S. ocean and Gulf of Mexico coasts and on the Great Lakes.
     Such vessels would be permitted to operate on inland waterways deemed by the Secretary of Transportation to be "navigable by ocean-going vessels." Inland waters are defined in the legislation as "the harbors and ports both on the coasts and on the Great Lakes" and "the rivers, canals, and other waterways tributary to the Great Lakes or to the coastal harbors and coasts of the United States inside the boundary line."
     Under the Smith bill, foreign-owned, built, flagged and crewed ships would be allowed to operate not only within the continental U.S., but between the U.S. mainland and remote states, territories and possessions--Alaska, Hawaii, Guam, Puerto Rico, the Virgin Islands, American Samoa and the Northern Marianas Islands--and between the coasts and the Outer Continental Shelf.
     "This bill is a real nightmare," said one observer in Washington. "It would wipe out the U.S.-flag cargo and passenger fleets in every sector in a single strike. Cargo vessels, cruise vessels, gaming and excursion vessels, commuter ferries, tugs, towboats, barges and dredges--all would be at real, immediate risk under H.R. 2046."
     He added: "The economic consequences would be staggering--billions in lost private capital investment, thousands of lost vessel and shoreside jobs in all 50 states, millions in lost corporate and personal income tax revenues for government at the federal, state and local levels, and a precedent that invites foreign control of all other exclusively domestic industries, beginning in the rail, road and air transportation sectors."
     Another critic warned of the national security implications. "H.R. 2046 would open domestic maritime markets to foreign equipment and foreign labor, thereby causing the loss of U.S.-flag vessels suited for defense services in emergencies and denying the Department of Defense the skilled and reliable civilian seagoing labor it would need to crew its reserve sealift ships in a conflict."
     H.R. 2046 would give foreign-built, foreign-owned cargo, passenger and service vessels immediate access to domestic trades. The bill would not specifically require the use of U.S. citizen officers and crews.
     Ships registered abroad and employing foreign officers and crews would be given domestic trading privileges under H.R. 2046 when they make no more than four U.S. port calls within 60 days or no more than six U.S. port calls in a calendar year. A company with more than one foreign-flagged and manned ship in domestic service would be limited to a total of 18 U.S. port calls in a calendar year.
     Foreign-flagged and manned vessels would be allowed to operate between and among U.S. ports "if the Secretary of Transportation makes a finding ... that the governments of the nations of registry and of the citizenship or nationality of each owner of record ... of such vessel extend reciprocal privileges to vessels of the United States to engage in the transportation of merchandise or passengers (or both) in its or their coastwise trades."
     Under H.R. 2046, foreign-flagged and manned vessels operating in domestic trades would be governed not by U.S. law, but by "the recognized international standards in force for the United States as determined by the Secretary of the department in which the Coast Guard is operating, in consultation with any other official of the federal government that the Secretary determines to be appropriate."
     In cases of conflict between minimum operating standards established in the U.S. and those established in a foreign vessel's flag state, the flag state's standards would apply.
     Foreign-flagged and manned passenger vessels would be subject to "all safety, manning, inspection, construction and equipment requirements applicable to United States vessels documented under the laws of the United States to engage in coastwise passenger trade (under H.R. 2046), to the extent that those requirements are consistent with the applicable international law and treaties to which the United States is signatory."
     Labor standards on foreign-flagged and manned vessels operating in the U.S. under H.R. 2046 would be "minimum international labor standards for seafarers under international agreements in force for the United States, as determined by the Secretary of Transportation on the advice of the Secretaries of Labor and Defense."
     H.R. 2046 is patterned after previous legislation sponsored by Rep. Smith in 1995 and again in 1997. Neither bill attracted significant support, and neither was heard in committee or taken up on the House floor.
     The earlier Smith bills prompted then House Rules Committee Chairman Gerald Solomon (R-NY) and the late Rep. Joe Moakley (D-MA) to introduce House Concurrent Resolution 65, which stated "the sense of the Congress" that the Jones Act and other cabotage laws "are critically important components of our nation's economic and military security and should be fully and strongly supported. H.Con. Res. 65 drew 241 Republican and Democratic co-sponsors.
     H.R. 2046 was referred to the House Transportation and Infrastructure and Armed Services Committees.

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