Puerto Rico’s proposal to repeal the Jones Act as a way to help alleviate the territory’s debt crisis would undermine national security, a US defence group has argued.
A five-year restructuring plan released on 9 September by Puerto Rican governor Alejandro Garcia Padilla includes a request that the US Congress lift the Jones Act – which requires that cargo moved between US points be carried by US-flagged, US-built vessels operated by US crews – as it applies to Puerto Rico. Some economists claim that the measure is anticompetitive and increases shipping costs.
However, the Navy League of the United States, a civilian lobbying group that promotes seaborne military services, called on Congress to reject such proposals, citing the need to have US-flagged ships and crews to support national defence.
In a letter to Congress on 9 September, Navy League executive director Bruce Butler cited a report from the US Government Accountability Office (GAO) concluding that without the Jones Act, the US Department of Defense “would have to incur substantial additional costs to maintain and recapitalise a reserve fleet of its own”.
In 2013 the GAO examined claims by Puerto Rican shippers that the Jones Act directly caused higher freight rates.
The report found that it was impossible to measure how high rates in the trade would be without the act because it was not known “the extent to which rules and regulations that would apply to international carriers’ vessels that may serve this trade”.
This post was sourced from IHS Maritime 360: View the original article here.
