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Another View

Another View: For Puerto Rico's sake, scrap the Jones Act

With the nearly century-old Jones Act put back in force, battered Puerto Rico’s future just got even darker. The Department of Homeland Security’s decision to end the commonwealth’s waiver from the law means that its seaborne commerce with the mainland must again be carried on ships owned, built and crewed by Americans.

The island’s people – also Americans, if the administration needs reminding – are still in extreme distress, and this policy will obstruct and delay their recovery. Reinstating the act in such circumstances is inexcusable.

The problem isn’t a lack of qualifying ships – U.S. shipping companies have been working hard to deliver relief supplies – as much as that Jones Act vessels are a lot more expensive.

According to the U.S. Maritime Administration, U.S.-flag ships cost nearly three times more to operate than their foreign-flag counterparts. Sending a container from the East Coast to Puerto Rico on a Jones Act ship costs nearly twice as much as sending it farther to Jamaica on a foreign-flag vessel.

It isn’t as though the policy is smart even in normal times. Puerto Ricans pay more for U.S.-shipped goods, while mainland companies lose business to foreign suppliers.

Farmers and ranchers, for instance, have chosen to source animal feed and fertilizers from Saint John, Canada, rather than New Jersey. The cost of Jones Act shipping could cancel the savings that the island might otherwise make by buying cheap U.S. natural gas. Puerto Rico has lost business as a trading hub: Container traffic at Kingston, Jamaica, a country with a smaller population and economy, has overtaken that of San Juan.

From Hawaii and Alaska to Puerto Rico, U.S. states and territories that rely heavily on shipping have always borne a disproportionate burden from a law that seeks, with less and less success, to retain a U.S. merchant marine and commercial shipbuilding capability.

Even before Hurricane Maria shattered its infrastructure, Puerto Rico was poorer than the poorest U.S. state, with unemployment far higher than on the mainland. Its 3.4 million people, still mostly without electrical power or telecommunications, with many lacking even potable water, face a mammoth, years-long task of rebuilding. They’re also flat broke.

Making them pay more for imports from the mainland would be wrong under any circumstances, but at a time like this it’s disgraceful.

Congress is considering measures that would exempt Puerto Rico from the Jones Act or scrap the law altogether. For decency’s sake, the first is the least it should do.

Far better if it puts an end to this nonsense once and for all.

Bloomberg View

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