After World War I, America was worried about German U-boats, which had sunk nearly 5,000 ships during the war. Congress enacted the Merchant Marine Act of 1920, a.k.a. the Jones Act, to ensure that the country maintained a shipbuilding industry and seafaring labor force. Section 27 of this law decreed that only American ships could carry goods and passengers from one United States port to another. In addition, every ship must be built, crewed and owned by American citizens.
Almost a century later, there are no U-boats lurking off the coast of Puerto Rico. The Jones Act has outlived its original intent, yet it is strangling the island’s economy.
The foreign vessel has one other option: It can reroute to Jacksonville, Fla., where all the goods will be transferred to an American vessel, then shipped to Puerto Rico where — again — all the rerouting costs are passed through to the consumer.
Thanks to the law, the price of goods from the United States mainland is at least double that in neighboring islands, including the United States Virgin Islands, which are not covered by the Jones Act. Moreover, the cost of living in Puerto Rico is 13 percent higher than in 325 urban areas elsewhere in the United States, even though per capita income in Puerto Rico is about $18,000, close to half that of Mississippi, the poorest of all states.
This is a shakedown, a mob protection racket, with Puerto Rico a captive market. The island is the fifth-largest market in the world for American products, and there are more Walmarts and Walgreens per square mile in Puerto Rico than anywhere else on the planet.
A 2012 report by two University of Puerto Rico economists found that the Jones Act caused a $17 billion loss to the island’s economy from 1990 through 2010. Other studies have estimated the Jones Act’s damage to Puerto Rico, Hawaii and Alaska to be $2.8 billion to $9.8 billion per year. According to all these reports, if the Jones Act did not exist, then neither would the public debt of Puerto Rico...................
https://www.nytimes.com/2017/09/25/o...t.html?mcubz=0
President Donald Trump said Wednesday that he was hesitant to lift the Jones Act in order to aid Puerto Rico following a devastating hurricane on the island because of “a lot of people that work in the shipping industry that don’t want the Jones Act lifted.”
“On Puerto Rico, Mr. President, why not lift the Jones Act like you did in Texas and Florida?” a reporter asked as Trump made his way to Marine One.
“Well, we’re thinking about that,” he responded. “But we have a lot of shippers, and a lot of people — a lot of people that work in the shipping industry that don’t want the Jones Act lifted. And we have a lot of ships out there right now.”
http://talkingpointsmemo.com/livewir...nes-act-waiver
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