Pres. Biden is asked to waive the Jones Act, but what is it?

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The Jones Act is a 1920 maritime law that is keeping Puerto Rico in the dark after Hurricane Fiona

There’s a ship sitting outside Puerto Rico ready to offload its cargo of diesel fuel to power the generators helping the U.S. territory recover from another devastating storm. Except, the ship can’t dock because it’s not U.S. made, owned or staffed — a requirement under a law called the Merchant Marine Act of 1920 (often referred to as the Jones Act, named after one of the representatives who sponsored it).

It’s frustrating for Puerto Ricans, knowing the ship with the fuel they need is so close by. The Puerto Rico Gov. Pedro Pierluisi and members of Congress have called on President Joe Biden to waive the law for emergency’s sake. But it’s a politically charged problem for Biden, who, at the beginning of his presidency, promised to uphold the Jones Act to keep the U.S. shipping industry and its unionized workers strong.

Currently Biden is punting, saying he isn’t sure he can issue a waiver. Critics say he can do it and he’s just stalling for time while he figures out how much a political dent it could make in his party’s midterm fortunes.

While Puerto Ricans wait for Biden to make up his mind, Grid spoke to Martin Davies, director of the Tulane University Maritime Law Center, about who wins and who loses with the Jones Act.

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This interview has been edited for length and clarity.

Grid: What is the purpose of the Jones Act?

Martin Davies: One of the main reasons behind the initial passage of the bill in the 1920s is that if the United States were to become entirely dependent on foreign flag vessels to carry stuff, even within the U.S., then in times of war or national crisis or whatever, there would be no national fleet left for the United States to requisition as it did in [World War II].

The part of the Jones Act at issue here is what is generally referred to in maritime law as cabotage. This law says that if cargo is to be carried from one place in the United States to another place in the United States on a ship, the ship must be, essentially, U.S. built, U.S. crewed, U.S. flagged, U.S. owned. And, as far as I am aware, the U.S. has the most restrictive cabotage regulation in the world.

G: Who is best served by the law? Who’s not?

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MD: The pro-Jones Act people would say it benefits U.S. workers. It guarantees them at least some level of jobs — shipboard jobs, acting as seafarers on vessels. It also guarantees shipbuilding industry jobs, because the vessels have to be built in the United States in order to be Jones Act qualified. Otherwise, all ships will be made in China or Korea.

The idea that, if you allow foreign flag vessels to intervene in a situation such as this, that’s the thin end of the wedge, and once you start you shall not stop, et cetera. That’s their argument.

The cons are the usual cons that come when you restrict competition: When there’s little or no competition for these services, they tend to be more expensive than they would be if there was competition. It makes things more expensive, especially for places like Hawaii and Puerto Rico.

And of course, there’s always a lot of political pressure to promote competition. The problem that many countries that have eased cabotage restrictions have, though, is that competition allows foreign competitors to come in and then that wipes out all the domestic providers.

G: The White House is saying it’s not so easy to grant a waiver when it comes to the Jones Act. Is that right?

MD: In order to grant the waiver of the Jones Act, the White House has to be satisfied that no U.S.-flagged ship could carry a similar amount of diesel from Florida to Puerto Rico in a reasonable amount of time. [It would take a little over a day to get there]. And on the face of it, that’s the question that the White House has to answer: Can this be done by a U.S.-flagged vessel? Because if it can, that’s what a Jones Act waiver would require.

G: What about the waiver law the White House is citing that was passed by Congress in 2020? Is that a legitimate argument?

MD: What the 2020 amendments did was effectively put an end to blanket waivers. For example, the post- hurricane responses to Katrina and Rita, before the amendment, allowed any foreign-flagged vessel, that might be able, to come in and help for the most part.

That doesn’t fly anymore. It’s currently a vessel-by-vessel waiver: Can a U.S.-flagged ship provide the service that this specific foreign- or private-flagged ship is going to perform?

G: Have there been instances when the Jones Act requirements have been waived?


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MD: Yes. After Hurricane Katrina and Hurricane Rita, there were issues with the rigs in the Gulf. There was an oil spill there and the Bush administration waived the Jones Act for vessels coming in to help with the cleanup. The Donald Trump administration did eventually waive the act after [Hurricane] Maria hit Puerto Rico. So it’s not by any means unknown for the act to be waived in times of emergency.

It comes back to the essential question: Does the need for an immediate response outweigh the fact that a U.S.-flagged vessel could provide the same response? Because if the same response could be provided by a U.S.-flagged vessel in a timely manner, then you can follow through with your commitment to the Jones Act and provide for the people of Puerto Rico. Now what the people of Puerto Rico are saying is: “It’s right there, and we need it right now.”

G: Is there any way for the White House to get out of this politically charged situation?

MD: One thing that may indeed end up playing into it is that Hurricane Ian is presently posing a threat to Jacksonville [Florida]. I mean, not as much as it is to Tampa [Florida], but it’s going to affect the port facility in Jacksonville. Most of the stuff that goes to Puerto Rico goes out of Jacksonville. So that may provide the White House with a sort of simple way out. They can say, “Oh, we’d love to do this with a U.S. flagged-vessel in compliance with the Jones Act but, in fact, this other hurricane has prevented us from doing that.” But that’s all speculation.

Thanks to Alicia Benjamin for copy editing this article.