Bill seeks to loosen
rules of Jones Act

Foreign-flag ships would be allowed,
but only if they used U.S. crews

By Pete Pichaske
Star-Bulletin

WASHINGTON -- The latest battle in the war over controversial maritime laws protecting domestic carriers was launched here today, as a Michigan congressman proposed loosening restrictions imposed by the so-called Jones Act.

"Changes in the Jones Act are desperately needed," said Rep. Nick Smith, R-Mich., condemning the 1920 federal law that requires cargo and passengers transported between U.S. ports to be carried on ships owned and registered in the United States and crewed by American sailors.

"The onerous requirements of the Jones Act ... hamper domestic trading by raising prices prohibitively high."

Smith argued that Jones Act restrictions are driving up prices for consumers -- particularly in Hawaii, where more than 80 percent of the goods are imported -- and costing jobs as businesses turn to cheaper foreign carriers.

His bill, introduced today, would allow U.S. ships used for coastal trade to be internationally built and registered. They would still have to be U.S. owned and crewed by U.S. sailors.

The bill is backed by a coalition of conservative Republicans, taxpayer groups opposed to government intervention, and industries that use shipping lines. Among the last group is the Hawaii Cattleman's Association, whose members say that the high cost of shipping cattle to the mainland often forces them to use planes or to ship to Canada instead.

"It's unfortunate that the nation's 50th state finds it easier to trade with a foreign country," said Robert L. Holsford of the National Cattlemen's Beef Association.

But the bill has powerful enemies and clearly faces an uphill battle in Congress, where it failed to even get a hearing last year.

"Smith's bill would hand over the $15 billion domestic waterborne transportation system to foreign, tax-exempt, floating sweatshops," said Phil Grill, and executive with Matson Navigation Co., one of the two U.S. shipping lines that serve Hawaii. Grill is also chairman of the Maritime Cabotage Task Force, a coalition of shipping line and maritime labor groups that opposes changes in the Jones Act.

The bill faces "overwhelming odds," said Grill, who noted that 17 of the 19 members of the two House subcommittees likely to take up the bill have signed letters supporting the Jones Act.

One of those lawmakers is Rep. Neil Abercrombie, D-Honolulu, a member of the House National Security Committee's Merchant Marine panel.

"Criticism of the Jones Act is based on old myths and ignores the law's important benefits for Hawaii and our country," said Abercrombie. He said the law has resulted in dependable maritime links between Hawaii and the mainland and helped maintain a strong merchant marine fleet.

Abercrombie also said that a recent study refuted arguments that the law helps drive up the cost of living in Hawaii.

Jones Act critics remain undeterred. "I think we will make much more progress this year than in the last session," said Mike Hansen, head of the Hawaii Shippers' Council, a group of about three dozen Hawaii shippers, including the Hawaii Cattlemen's Council, created to reform the Jones Act. "I think we'll get a hearing this year."

Sen. Jesse Helms, R-N.C., has promised to introduce similar legislation in the Senate.