For further information, contact:
Glen Nekvasil, Communications Director
Phone: 216- 861-0592 / Fax: 216-241-8262
E-mail: lcaships@en.com
CLEVELAND--Lake Carriers' Association today (August 6) again rejected legislation which supposedly would "reform" the Jones Act and other U.S. Cabotage laws. The Coastal Shipping Competition Act (H.R. 4006), introduced on August 2 by Congressman Nick Smith (R-MI), would allow foreign-owned, -built and -crewed vessels into the U.S. domestic trades for the first time since 1817.
"This legislation has been drafted by the Jones Act Reform Coalition," said LCA President George J. Ryan, "an organization which includes foreign-controlled agricultural and shipping interests. The JARC declares this bill represents 'true reform' of the Jones Act. Yet nothing can alter the fact that this legislation will allow foreign-owned, -built and -crewed vessels into our domestic trades. If we allow these operators into the Jones Act trades, we would legalize the same kind of unfair competition that has cost hundreds of thousands of American workers their jobs in other industrial activities."
To substantiate his statement, Ryan noted that many foreign-flag ships were built with substantial government subsidies. Jones Act vessels were precluded from obtaining the construction subsidies the United States once offered carriers flying the U.S.-Flag in foreign commerce. "Furthermore, many foreign-flag operators enjoy tax benefits and other incentives not available to U.S.-Flag operators," Ryan emphasized. "Even though Congressman Smith's bill would apply all U.S. laws to foreign ships engaging in domestic cargo movement, something not easily done even if the government increases its funding for the Coast Guard and other Federal agencies, the playing field would remain tilted too heavily against existing U.S.-Flag carriers for them to compete. Simply put, this legislation imperils the nearly 125,000 jobs the Jones Act currently supports nationwide."
The Jones Act (Section 27 of the Merchant Marine Act of 1920) requires that all cargo moving between U.S. ports be carried in ships which are U.S.-owned, -built and -crewed. The same general principles are applied to other modes of transportation in the United States. While the other modes of transportation can operate foreign-built equipment, these units must comply with U.S. standards. Many foreign-built ships do not even begin to approximate the standards applied to U.S-built ships. For this reason, the U.S. Congress has ordered the United States Coast Guard to increase its inspections of foreign-flag vessels calling on U.S. ports.
Most maritime nations have an equivalent to the Jones Act. The Canadian-flag vessels operating on the Lakes are governed by similar rules. Any ship carrying cargo between Canadian ports must be Canadian-owned and -crewed. The Canadian ships that were built overseas were allowed to enter the coastwise trades only after payment of a sizable tariff.