Senate Ends Attempt to Repeal Jones Act

Sen. John McCain’s amendment to repeal a key provision of the Jones Act failed to make it into a Senate-passed bill authorizing construction of the Keystone XL oil pipeline. The amendment ran into stiff opposition from the U.S.-flag maritime industry. Trade groups organized a campaign of calls and emails to senators and U.S. House members to push back against the rider which would have done away with the Merchant Marine Act of 1920, also known as the Jones Act.

The Jones Act requires that domestic waterborne cargo be shipped in U.S.-flag ships owned, built and operated by Americans. Opponents have long criticized the Jones Act for raising the cost of shipping between the continental U.S. and Hawaii, Alaska, Puerto Rico and Guam. High costs of U.S. shipbuilding create barriers of entry, limiting the number of competitors to the protected U.S. domestic market.

Supporters of the Jones Act fear the potential loss of jobs. Without the U.S. dictating that the ships be American, they argued that cheaper foreign vessels could eventually eliminate American jobs and knowledge base. The bi-partisan group  pointed to a Maritime Administration study that concluded U.S. shipbuilding supports more than 40,000 jobs and injects nearly $60 billion into the economy annually.

The Senate passed the Keystone bill 62-26 last Thursday without McCain’s amendment. The White House has said it will veto the pipeline bill.

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