Aiming to address a long-standing issue within the maritime industry, Hawai‘i Representative Ed Case has introduced a bill targeting a loophole in the Jones Act. This 105-year-old law mandates that goods transported between U.S. ports must be carried by U.S.-built ships with American crews. However, the Act has inadvertently restricted shipping options to Hawai‘i and other island territories, leading to inflated costs for consumers.
Representative Case’s recent bill seeks to close a loophole that permits Jones Act shipping companies to conduct significant vessel modifications in foreign shipyards. By exploiting this gap, companies can bypass import duties and engage foreign workers, potentially compromising national security by granting hostile nations access to critical domestic supply chains.
The bill, dubbed the Merchant Marine Allies Partnership Act, proposes that major vessel modifications can be carried out in foreign ports without incurring the 50% import duty, provided these ports are in allied or partner countries. Additionally, the legislation would exempt ships purchased from allied nations from adhering to the Jones Act, thereby expanding the pool of vessels eligible to operate within the U.S. supply chain.
Keli‘i Akina, President and CEO of the Grassroot Institute of Hawai‘i, views the bill as a positive step towards alleviating the financial burden imposed on consumers due to the current restrictions on U.S.-built ships. Akina suggests that the bill could potentially save Hawai‘i over $500 million annually in shipping costs, emphasizing the importance of broadening the exemption to include all foreign countries.
While acknowledging the benefits of the proposed legislation, Akina believes that extending the import exemption to all foreign nations would further enhance its impact. By reducing the costs associated with U.S.-built ships, the bill could lead to significant savings for consumers and bolster the efficiency of domestic shipping operations.
As the debate around Jones Act reform continues, the proposed bill represents a significant attempt to address the challenges posed by the existing regulations. By advocating for modifications that support both national security interests and economic efficiency, Representative Case’s initiative underscores the ongoing efforts to modernize the country’s maritime policies and enhance the competitiveness of the domestic shipping industry.
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