Examining the Jones Act ’s Harm to U.S. Ports

Colin GrabowEarlier this weekWall Street Journal columnist Mary O ’Grady penned anexcellent piece detailing the myriad ways in which U.S. maritime protectionism interferes and distorts trade. Some of the examples presented may be familiar, such as theimperilment of Alaska ’s summer cruise season. But the column also delves into effects of the law that are often overlooked, such as its impact on ports:The Jones Act is particularly costly to Puerto Rico because it keeps the island from capitalizing on its comparative advantage as a  transit point for cargo. Colin Grabow, who heads the Cato Institute’sProject on Jones Act Reform, puts it this way: “Absent the Jones Act we would see large ships drop their cargo in San Juan or Ponce for placement on smaller ships to various ports in the region, including the U.S.—basically a hub‐​and‐​spoke model. But no one will ever use Puerto Rico as such a transshipment hub so long as shipping between PR and the world’s largest economy is subject to the Jones Act.”This merits further explanation. For those unfamiliar, transshipment is the transfer of cargo from one vessel to another before it is brought to its final destination. The massive containershipEver Given that recently blocked the Suez Canal, for example, wasbound for the port of Rotterdam where much of the ship ’s containers would be unloaded for placement onto smaller vessels for destinations around Europe.But such transshipment of containers for destinati...
Source: Cato-at-liberty - Category: American Health Authors: Source Type: blogs