The Jones Act requires trade between U.S. ports to be carried in American built ships with American crews. This 1920 piece of protectionist legislation raises the cost of shipping between Puerto Rico and the mainland, making it harder for the island to compete. [read_more]
U.S. ship operating costs are estimated at nearly 3 times foreign costs, while ship construction costs are nearly four times as high. Moreover, limited availability of some ship types forces Puerto Rico to import petroleum and other products from foreign countries. Repealing the Jones Act would also benefit Hawaii and Alaska and give new life to shipping between mainland ports and allow Mississippi River barge operators to access cheaper sources of equipment.
These changes would lower transportation costs in many markets. While there are many other regulatory changes that would benefit Puerto Rico (e.g. lower the minimum wage), abolishing the Jones Act would help the entire country. The Jones Act benefits a small number of people who are involved in the various aspects domestic shipping, but raises costs and diminishes economic growth for the rest of the country. Will any Republican candidate embrace this obvious way to demonstrate a willingness to help Puerto Rico by reducing the federal regulatory burden with the elimination of the Jones Act?
