The Trump administration has denied a request to grant a waiver of the Jones Act for Puerto Rico to ease the shipping of food, fuel and other hurricane relief supplies despite previous waivers earlier this year, citing a government assessment that determined the island’s ports are too damaged to handle an increased import capacity.
The Jones Act is a shipping law which, briefly, mandates that any shipping of people or cargo between two U.S. ports must be done with an American ship to avoid tax and tariff penalties. It was passed shortly after World War I to help sustain the American shipbuilding industry after devastating losses in the war.
The law was recently temporarily waived following Hurricane Harvey and Irma destruction in the southeast U.S. to help prevent widespread fuel shortages, but a similar waiver has been denied following the damage to the island of Puerto Rico by Hurricane Maria.
Here’s more on the denied waiver from Reuters:
On Monday, U.S. Representative Nydia Velázquez and seven other representatives asked Elaine Duke, acting head of Homeland Security, to waive the nearly 100-year-old shipping law for a year to help Puerto Rico recover from Hurricane Maria. Gregory Moore, a spokesman for Customs and Border Protection, an office of Homeland Security, said in a statement that an assessment by the agency showed there was “sufficient capacity” of U.S.-flagged vessels to move commodities to Puerto Rico.
“The limitation is going to be port capacity to offload and transit, not vessel availability,” Moore said.
The government’s rationale for a waiver after the storms hit Texas, Louisiana and Florida was to ease movement of fuel to places along the U.S. East Coast and make up for temporary outages of high capacity pipelines.
“The situation in Puerto Rico is much different,” Moore said in the statement, adding that most of the humanitarian effort would be carried out with barges, which make up a large portion of the U.S. flagged cargo fleet.
Earlier today, Joint Chiefs Chairman Gen. Joseph Dunford testified to the Senate that the military had the capability to support relief efforts in Puerto Rico, but that these efforts would be contingent on securing and rebuilding the island’s airfields and ports, according to Military.com.
From that report:
When asked by Sen. Richard Blumenthal, D-Connecticut, whether the military could do more, Dunford said “If there is, we’ll be doing it.” The relief effort for the military was “both professional and personal,” Dunford said in a reference to service members who have families in Puerto Rico.
“These are Americans,” Dunford said of the 3.4 million U.S. citizens of Puerto Rico, “and we’re going to do everything we can to help them out.”
The immediate needs in Puerto Rico were for fresh water, food, fuel, generators and medical assistance, Dunford said, and “we’re looking around the corner to see what they might need next week.”
However, Puerto Rico has a long and troubled history of suffering from the conditions of the Jones Act. An op-ed published in The New York Times yesterday highlighted its impact on the island, arguing that the nearly-century old law has caused inflated prices for Puerto Rican consumers for decades. Here’s an excerpt:
A 2012 report by two University of Puerto Rico economists found that the Jones Act caused a $17 billion loss to the island’s economy from 1990 through 2010. Other studies have estimated the Jones Act’s damage to Puerto Rico, Hawaii and Alaska to be $2.8 billion to $9.8 billion per year. According to all these reports, if the Jones Act did not exist, then neither would the public debt of Puerto Rico.
Three American territories are exempt from the Jones Act, including the United States Virgin Islands. Outright repeal of the law has already been backed by the Heritage Foundation, Cato Institute, Manhattan Institute and several major publications. The Federal Reserve Bank of New York found that the Jones Act hurts the Puerto Rican economy, and two Republicans, Senator John McCain of Arizona and Representative Gary Palmer of Alabama, have submitted bills to repeal or suspend the law. (The shipbuilding industry supports the law.)
While the Trump administration’s determination that the disrepair of Puerto Rico’s shipping ports prevents any short-term relief benefits from waiving the law may be accurate, the fact that other islands in the region are excluded while Puerto Rico has suffered from potentially billions of dollars in economic loss directly correlated to the Jones Act for decades indicates there’s still potential, and even a need, for further political and legislative action.
Update, Sept. 28 at 10:20 a.m. ET: Trump has waived the Jones Act. The waiver goes into effect immediately, press secretary Sarah Sanders said.
Additionally, despite multiple government officials going on record to claim there is no need to waive the Jones Act, the Trump administration later clarified that it never formally declined a request.