Vancouver Gets Cruise Ship Trade, Seattle Gets Fumes : A 19th-Century law keeps U.S. ports mostly out of an industry that grew 175% in 10 years. They’re fighting back, but it’s a task.

Never mind all those collapsing trade barriers, the hoopla over the North American Free Trade Agreement and the race for global commerce. Seattle and other U.S. port cities are fast aground on the barnacles of a 19th-Century protectionist statute, unable to rise to one of the tantalizing economic booms of the age: the explosion of cruise ship tourism.

This year, hundreds of thousands of Americans will arrive at Seattle’s Sea-Tac airport, bound for an Alaska cruise.

From the baggage claim these passengers will be directed into buses and chauffeured up Interstate 5, passing downtown Seattle as fast as traffic allows. Destination: Vancouver, British Columbia, Canada.

There, they will board their cruise ship and sail north through the Inside Passage.

Vancouver gets the tourist dollars and port business; Seattle is left with the diesel fumes.

And a galling situation it is for this waterfront city that believes nothing so much as its own irresistibility.

The ships of the great Klondike Gold Rush went from Seattle’s ports and made many people rich. How, today’s residents ask, can this one be passing them by--after all, the cruise ship industry has grown about 175% in the last 10 years.

In a recent accounting, Canadian officials reported 236 annual callings by Alaska cruise ships, which carried about a half-million passengers. Seattle, meanwhile, was port of call for only seven ships and 2,722 passengers.

Reduce it to the language of commerce, and Seattle counts it this way: $117 million to Vancouver, $4.5 million here.

“Terrible. Silly,” groans Bob Gogerty, one of the state’s foremost behind-the-scenes political powerbrokers. He has been enlisted to lead Seattle’s crusade to open the city to Alaska cruise lines.

It will be a task.

Back to 1886, when proud ships carried square-rigged sails, Congress passed a law prohibiting foreign-flagged vessels from transporting passengers between U.S. ports. Such ships could still call on the United States from abroad, of course.

So it’s legal for foreign-registered liners to leave from Canada to call on Alaska. But not if they leave from Washington state. Similarly, California passengers bound for Hawaii on foreign registered ships find themselves bused to Ensenada, Mexico, for departure. Only Puerto Rico has been able to secure a congressional exemption.

The rationale for this deeply entrenched and vigorously defended law--and its statutory twin that applies the same rules to freighters and tankers--was to keep the U.S. shipbuilding and maritime industries healthy, for the good of workers and national defense.

For a host of reasons this has not happened, including the U.S. Coast Guard’s extra-high safety standards for domestic-built passenger ships and a prohibition, repealed only two years ago, against any gambling on domestic ships.

Today, all of the world’s cruise ships fly flags of nations other than the United States, except for two 1951 vessels that ply the waters of Hawaii. The U.S. has not produced a large, ocean-going cruise ship in a generation.

Still, 85% of the world’s passenger liners call on U.S. ports, and 85% of the passengers are Americans, according to statistics from the National Cruise Ship Alliance.

Maritime labor unions and shipbuilding interests continue to defend the laws and block nearly all exemptions, by virtue of their influence on the House Merchant Marine and Fisheries Committee. Their hope is to bring the business home, particularly now that domestic labor costs are no greater than those in competing maritime countries.

The cruise companies like Holland America, Princess and the others have merely gone across U.S. borders with their departure ports.

And the few hours that passengers must endure in a bus has hardly slowed the boom--already destinations like Juneau are jammed with liners, and the premiere Alaska way-stop of Glacier Bay National Park is full with all the ships that the Park Service will permit.

With Seattle leading the way, U.S. ports believe that they may have the foundation of a compromise for rewriting the federal law to give domestic cities a shot at the cruise lines.

Sponsored by Rep. Jolene Unsoeld (D-Wash.), the proposed legislation would provide loan guarantees and other financial incentives for domestic shipbuilding. Foreign companies would be allowed greater investment in ships carrying the U.S. flag, in hopes of stimulating joint-ventures.

If passed, the bill would allow foreign-flagged vessels to depart from domestic ports immediately as long as their owners promised to begin building U.S. replacement ships within three years. The United States also would scrap Coast Guard requirements that exceed international safety standards for passenger liners.

Finally, the bill proposes to grant U.S. flagged ships preference in entering Glacier Bay, famous for its wildlife and stunning displays of ice. Now, all 107 summer permits to visit the park are used by foreign-flagged vessels.