Sen. McCain action targets U.S. shipbuilders

The U.S. Senate passed the Keystone XL Pipeline Approval Act 29 Jan 2015 but only after language was removed that would repeal the Merchant Marine Act of 1920. The Merchant Marine Act, also known as the Jones Act, is a law that protects U.S. shipbuilding and merchant mariners by requiring “that all goods shipped between waterborne ports of the United States be carried by vessels built in the United States and owned and operated by Americans.”

Sen. John McCain, who attempted to add the repeal of the Jones Act to the bill, stated the following in a press release:

I have long advocated for a full repeal of The Jones Act, an antiquated law that has for too long hindered free trade, made U.S. industry less competitive and raised prices for American consumers,” said Senator John McCain. “The amendment I am introducing again today would eliminate this unnecessary, protectionist restriction. According to the Congressional Research Service, it costs $6 per barrel to move crude from the Gulf Coast to the Northeast United States on a Jones Act tanker, while a foreign-flag tanker can take that same crude to a refinery in Canada for $2 per barrel – taking money directly out of the pockets of American consumers. I hope my colleagues will join in this important effort to repeal this archaic legislation to spur job creation and promote free trade

Coast Guard Commandant Adm. Paul Zukunft told Politico, “McCain’s amendment would result in the outsourcing of U.S. shipbuilding to foreign nations,” putting “our entire U.S. fleet in jeopardy.”

Tony Munoz, editor-in-chief of The Maritime Executive, stated, “Lifting the Jones Act would open U.S. markets to foreign competition and might decrease prices for consumers, but at what cost?” and added “McCain’s laissez-faire sentiments would actually destroy U.S. jobs, lower personal income, devastate U.S. vessel-operating companies and obliterate American shipbuilders, never mind the national security impact.”

Repeal of the Jones Act may favor free trade but would be expected to decimate the shipbuilding industry on the Gulf Coast and across the country. Having supported Sen. Thad Cochran’s 2014 re-election campaign, McCain may have expected extra support on the amendment which was soundly rejected.

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