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World & Nation

What is the Jones Act, and why does Puerto Rico want it gone?

Hurricane-ravaged Puerto Rico is asking the White House for any help it can get.

But there’s at least one request the Trump administration hasn’t granted Puerto Rico: the suspension of a 97-year-old maritime law that says shipping between ports in the United States must be done by U.S.-owned, U.S.-flagged, and U.S.-built ships operated by U.S. citizens.

Meet the Merchant Marine Act of 1920 — more popularly known as the Jones Act — which was championed at the time with nationalist rhetoric that was remarkably similar to President Trump’s.

The Jones Act entered the news this week after the federal government waived its restrictions to ease relief efforts for Texas and Florida after their recent hurricanes, but not for Puerto Rico, whose stranded residents are desperate for water, food, medicine and other basic supplies.

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The protectionist economic law was designed to create American jobs in the years after World War I.

American politicians and military figures were worried that the country would fall behind on the high seas if its naval power was not nurtured during peacetime. A healthy commercial shipping fleet, known as the merchant marine, was seen as a key part of national defense.

Republican U.S. Sen. Wesley Jones of Washington state came up with the Merchant Marine Act, which the Los Angeles Times hailed as an “America first” shipping law that would “unshackle commerce” and make shipping vessels “100 Per Cent. American.”

Other nations have similar policies, which are called cabotage laws. The Jones Act doesn’t apply to cargo shipped between the mainland states and the U.S. Virgin Islands, but it does affect Puerto Rico, whose 3.4 million residents get a large portion of their goods via container ships from the mainland.

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For years, Puerto Rican politicians have complained that forcing the U.S. island territory to rely on American-flagged ships — even with foreign ships in abundance in its ports — drives up the cost of basic goods there. The cost of living is higher on average compared with the mainland.

“Any protection raises costs. That is its purpose,” Alan Deardorff, an international trade economist at the University of Michigan, told The Times in 2015. “Protection is sought by industries that are facing lower-cost competitors. It raises costs to consumers.”

The nonpartisan U.S. Government Accountability Office found in 2013 that foreign shippers serving Puerto Rico from foreign ports generally cost less than their American counterparts despite traveling longer routes.

But the report also concluded that removing the restrictions on foreign shippers “could result in the disappearance of most U.S.-flag vessels in this trade,” thus harming American shippers and shipbuilders. The agency made no recommendation about what to do with the law.

Merchant marine supporters have firmly defended the law as the number of U.S.-flagged ships has shrunk over the decades.

“A balanced, competitive and efficient waterborne transportation system is indispensable to America’s economy and security,” says the website of the Transportation Institute, an industry nonprofit that supports the Jones Act. “A privately-owned, citizen-crewed merchant fleet, flying the flag of the US in our domestic and foreign commerce, has been the foundation for the success of our nation throughout its history — in peace and war.”

Criticism of the Jones Act has been shared by some conservative think tanks that believe in unbridled free trade. Making a case to scrap the law, the Heritage Foundation wrote in 2016 that “when special interest groups want goodies from Congress, they’ll often cloak their pleas in the garb of ‘national security.’ ”

The devastation from Hurricane Maria last week has spurred calls from some lawmakers to suspend the Jones Act for Puerto Rico for at least a year.

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“The island is now facing an unprecedented uphill battle to rebuild its homes, businesses and communities,” a group of seven Congress members led by Rep. Nydia M. Velazquez, a Democrat from New York, wrote to the Department of Homeland Security.

“Temporarily loosening these requirements — for the express purpose of disaster recovery — will allow Puerto Rico to have more access to the oil needed for its power plants, food, medicines, clothing, and building supplies,” the lawmakers wrote.

Elaine Duke, the acting Homeland Security secretary, had previously approved temporary Jones Act suspensions for states affected by Hurricanes Harvey and Irma, citing a need “to ensure we have enough fuel to support lifesaving efforts, respond to the storm, and restore critical services and critical infrastructure operations.” Jones Act Attorneys may have some insight regarding this as well. 

As of Wednesday, however, no waiver had come for Puerto Rico. The agency’s “current assessment is that there is sufficient numbers of U.S.-flagged vessels to move commodities to Puerto Rico,” a spokesman told The Times. “The limitation is going to be port capacity to offload and transfer cargo, not vessel availability.”

Supporting that argument, some news reports from Puerto Rico have suggested that there’s a glut of containers filled with supplies waiting to be unloaded in the island’s ports, but that officials have had difficulty securing drivers and transportation to unload them.

When asked by reporters whether his administration would suspend the Jones Act for Puerto Rico, Trump said, “Well, we’re thinking about that,” but gave a similar explanation as the Department of Homeland Security.

Trump also hinted at another motivation: “A lot of people that work in the shipping industry … don’t want the Jones Act lifted.”

Ruben Vives contributed to this report.

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matt.pearce@latimes.com

Matt Pearce is a national reporter for The Times. Follow him on Twitter at @mattdpearce.

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