Belatedly, President Trump has waived the Jones Act so the people of Puerto Rico can get supplies they need in their present post-hurricane crisis.
Sadly, this decision will provide only minor assistance, since internal distribution of aid is now the major obstacle. Still, Trump made the right decision, but Trump and Congress ought to go further: If Trump and Congress really want to help Puerto Rico rebuild its economy, they should repeal the Jones Act altogether.
The law, passed in 1920, is perniciously protectionist, deliberately creating an artificial scarcity of domestic shipping by boat, and thus driving up costs. In short, anyone shipping anything from a U.S. port to a U.S. port must use a U.S. ship. This drives up the costs of everyday life for residents of Hawaii, Alaska, Puerto Rico, and other U.S. possessions mostly accessible by sea.
The Jones Act makes it more expensive for people from such places to buy American products, or to sell their goods to the rest of the U.S. As Washington Examiner contributor Mark Perry noted, this law makes it roughly three times as expensive to ship oil from the Gulf states to New England (about $6 per barrel) as it is to ship the same amount of oil to Europe (about $2).
The special interests that defend the Jones Act say it helps keep Americans (a very small number of them) employed in the shipping industry. In fact, it just marshalls xenophobia and economic ignorance to make shipping much more expensive for those who live in hard-to-reach states and possessions.
By banning foreign-flagged and foreign-built ships, and ships that have crews that are more than a quarter foreign, from shipping goods between U.S. ports, the Jones Act guarantees at least some work for the tiny and dwindling fleet (just 93 ships as of 2011, down more than half over a decade) that meet its specifications. But the relative handful of jobs that this flotilla can sustain, plus the few jobs in the five remaining U.S. shipyards, are utterly insignificant in relation to the daily suffering and expense that this law causes.
In normal times, the Jones Act simply makes the cost of living much higher for residents of small, isolated U.S. territories and states — somewhere between $5 billion and $15 billion per year just in those places. In times of crisis, it interferes with shipping so badly that it has to be waived to save lives. It's time to recognize that it shouldn't be on the books at all.
Not only is it hindering the development of domestic shipping, it is also holding back the economy of at least one storm-ravaged island.
When asked why he had not yet suspended the Jones Act for Puerto Rico, Trump explained A lot of people who are in the shipping industry don't want" it suspended. We hope Trump is learning that every regulation is defended by some industry who finds it profitable.
The least Washington can do for an ailing San Juan is to free it of this corporatist burden permanently, so that a stricken community can recover faster and move on to a more prosperous future.