Senator McCain Proposes Legislation to Repeal Jones Act U.S. Flag Rule
Recently, U.S. Senator John McCain introduced the "Open America’s Water Act" which will repeal the portion of the Jones Act requiring American coastwise trade to be performed by U.S. flagged vessels owned by Americans. In the news release on the Senator's website, McCain argued that this U.S. flag requirement is harmful to the U.S. economy and that repealing the Act will have a net economic benefit. The Senator also stated that this rule is hampering foreign vessels from assisting with the cleanup of the BP DEEPWATER HORIZON oil leak.
Assuming that Senator McCain is correct about the overall economic benefits of repealing the U.S.-flag requirement, it is unclear whether opening American ports to foreign flagged vessels would be harmful to the U.S. maritime industry, which is already hurting from current economic conditions. Moreover, opening U.S. ports and coastwise trade to more foreign vessels may cause new environmental, safety and security problems along American coasts, since those vessels would not have to follow the rigorous and consistent regulatory framework that applies to American vessels.
As to Senator McCain's stated concerns about prevention of foreign vessels from assisting with the BP Gulf oil leak, those concerns appears to be misplaced or exaggerated. According to Maritime Executive Magazine, the Gulf National Incident Command reports that numerous foreign vessels are currently assisting with the Gulf cleanup and that there have been "no incidents" of foreign vessels being barred from assisting in the cleanup operation. In fact, the massive Taiwanese skimming vessel A WHALE has, to much fanfare, arrived in the Gulf and started skimming operations.
Since the U.S.-flag rule of the Jones Act may appear on its face to help U.S. business, Senator McCain's point about the Act actually hurting the economy is interesting and worthy of debate. However, his suggested repeal of the Jones Act does not appear to be based on the right considerations and seems to lack an adequate factual basis.
A longer article on this bill can be found on our website.
The text of the proposed Open America's Waters Act can be found on the Senator's website.
