When President-elect Donald Trump takes office this month, his team will have its hands full trying to roll back policies that have damaged the U.S. economy.
This is, after all, what he was elected to do.
However, as the Trump administration is identifying wasteful laws and regulations to eliminate, it shouldn’t limit itself to policies from the last four, 12, or even 20 years. It should also take a hard look at a damaging maritime law passed more than a century ago by a different progressive Democrat, former President Woodrow Wilson.
I’m speaking about the Merchant Marine Act of 1920 and its associated regulations. Commonly known as the Jones Act, this law requires that all goods carried between U.S. ports be transported on ships that are built and flagged in the United States and mostly owned and crewed by Americans.
The Jones Act is a relic from a different era, yet we continue to be governed by a maritime trade philosophy from the post-World War I world. In the 100-plus years since the Jones Act was enacted, we have seen global trade and politics change immensely.
U.S. shipyards have dwindled, and the U.S. shipping industry is a shadow of its former self. The number of Jones Act-compliant ships has shrunk from 257 in 1980 to 92 today. Jones Act ships cost four to five times as much to build and more to crew as well — costs that are ultimately passed to consumers.
There are famous examples of the illogic of the Jones Act in action like when its waivers are needed to deal with emergencies such as hurricanes or a pipeline shutdown.
Jones Act proponents say the law enhances national security, but how can that be if a Jones Act waiver is one of the first things requested during an emergency? The Jones Act can be militarily useful only if it maintains a strong supply of modern oceangoing commercial ships and experienced crews — something it has manifestly failed to do.
Jones Act defenders also say the law is necessary to protect jobs, but that ignores the economic harm caused by the act. Research from the Grassroot Institute of Hawaii demonstrates that the Jones Act costs the state of Hawaii $1.2 billion a year. Expand that to all 50 states, and you can imagine how much the act’s requirements must burden the U.S. as a whole.
The jobs claim is illusory as well. While the maritime industry says the act is responsible for 650,000 jobs, a recent Grassroot Institute analysis of these numbers suggests that this number is inflated. Federal data show that employment in the U.S. waterborne transportation and related industries has decreased by 2.62% since 1990, indicating that the Jones Act also fails to protect maritime jobs.
Clearly, the Jones Act has done nothing to prevent the slow decline of American shipping, promote national security, or protect maritime jobs.
However, thoughtful reform of the act may be the solution. The Trump administration should consider updating the Jones Act for the 21st century — especially since a rejuvenated U.S. shipping industry, free of some of the act’s more archaic restrictions, could create more maritime jobs.
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We could start by modifying the Jones Act’s U.S.-build requirement so that ships could be purchased from our allies, such as Japan or Korea. That might seem like a minor reform, but it would reduce the cost of shipping and likely spur domestic trade.
Trump has demonstrated a willingness to make bold decisions in his effort to improve America’s economic future. If anyone could bypass the entrenched Beltway support for the antiquated protectionism of a bygone era, it’s Trump.
Malia Hill is the policy director of the Grassroot Institute of Hawaii.
This article was originally published at www.washingtonexaminer.com
