Is the Jones Act Waiver All Politics?

In the short term, letting foreign ships bring cargo to the island may not do much to ease the humanitarian crisis, though a longer-term waiver could help.

Workers unload a barge at the port of San Juan, Puerto Rico.
Workers unload a barge at the port of San Juan, Puerto Rico. (Alvin Baez / Reuters)

As recovery efforts in the U.S. territory of Puerto Rico continue, the Trump administration has reversed course, deciding to temporarily waive a century-old law that requires cargo between U.S. ports be carried by American-flagged and-crewed ships.

Earlier this week, the Department of Homeland Security said it didn’t expect to waive the Jones Act, but White House Press Secretary Sarah Sanders said Trump granted it immediately after Puerto Rico Governor Ricardo Rosselló requested the move. The decision comes as Trump, who was criticized for being insufficiently attentive to the aftermath of Hurricane Maria, has begun to focus intensely on the island. But it’s unclear whether the waiver can have much immediate affect in easing the humanitarian crisis in Puerto Rico, or whether it’s largely a symbolic move that telegraphs that Washington is listening.

Rosselló’s argument for the waiver is simple: Puerto Rico needs as much help as it can get, and restricting that aid to the small fleet of barges that carries most goods to and from the island creates a choke-point. As Trump pointed out, it is an island, which means that the trucking and railroad industries, key in moving goods in the aftermath of Harvey and Irma, aren’t a factor.

“By relaxing the Jones Act, you provide more opportunities and more vessels for goods to get an affected area,” explains Marc Fialkoff, an adjunct professor at Virginia Tech’s School of Public and International Affairs who has studied the law. “People get goods faster, because there aren’t that many U.S. vessels.”

Yet it’s tough to gauge the impact of the 10-day waiver announced Thursday. In the immediate term, Puerto Ricans are struggling to get food, water, medicine, and other basic necessities, but that’s not necessarily because they aren’t on the island. Once those goods reach Puerto Rican ports, it’s proven challenging to distribute them around an island whose roads, electrical grid, communications lines, and other basic infrastructure have been destroyed or badly damaged. Nor is clear how much excess capacity Puerto Rican ports can take, though Fialkoff cautions that should not slow any waiver.

The government issued a short-term Jones Act waiver after Harvey and Irma, but initially hesitated after Maria. It said the earlier waiver was necessary because without tankers of fuel reaching the Gulf Coast, gas prices would have skyrocketed. “We have a lot of shippers and a lot of people who work with the shippers who don’t want the Jones Act lifted,” President Trump said Wednesday.

But the president seems to have bowed to the political reality that issuing a waiver was politically popular. The problem facing mainland politicians is that there is a great deal of public pressure to show effort to help Puerto Rico, even as many of the steps under consideration don’t have clear, immediate impacts. The result has been a steady flow of arguments that Trump waive the Jones Act, often with little explanation of what immediate impact the step would have.

American carriers who supply Puerto Rico under the Jones Act contend that’s because there wouldn’t be an impact. “The biggest challenge is how you can move the cargo,” Jose Ayala, vice president of Puerto Rico services at Crowley, one of those carriers, told The Wall Street Journal earlier this week. “The cargo is here. The people of Puerto Rico should not have any fear that there is not going to be food or medicine on the island.”

That’s accurate as far as it goes, say some experts. “I think that's true this week, but that's not going to stay true,” says Salim Furth, a research fellow at the conservative Heritage Foundation who has argued that the federal government should waive the Jones Act for Puerto Rico as long as federal aid is flowing to the island. “We need a long-term waiver. If they’re using mainland taxpayer money, they should be able to use American goods.”

Here’s the problem, as Furth sees it: Rebuilding Puerto Rico will require huge amounts of goods like steel, concrete, cinder block, and lumber. But transporting those goods on the existing Jones Act fleet will cause various problems. For one, the fleet already runs a tight schedule moving everyday goods to the island, and it’s not clear that it can add huge shipments of building supplies without crowding out basic supplies, nor that the barges that make the runs are well-suited for other cargo. For another, the cost of transporting those goods from the mainland on American-flagged carriers will push up the costs, and lead Puerto Ricans to turn to cheaper goods from Caribbean and Latin American countries. As of a 2013 Government Accountability Office report, roughly two-thirds of vessels bring cargo to Puerto Rico are foreign.

The Jones Act is a classic protectionist law, put in place to prop up the American maritime industry. That makes it appealing to politicians like Trump, who were elected in part on promises of protectionism. But critics of the law like Furth argue that the Jones Act is actually hurting more American workers than it’s helping, by artificially increasing the cost of getting U.S.-made goods to places like Puerto Rico, Alaska, and Hawaii, and that the true America-first option would be to dismantle the Jones Act.

The debate over whether the law remains sensible nearly 100 years after it was first implemented is a subject of intense debate in pockets of the country—places where residents rely on cargo ships for basic goods, like Hawaii, and in regions whose economies are tied to shipbuilding, like the Gulf Coast—but only occasionally does the mandate bubble up in national discourse. For those fighting to dismantle the act, especially, the disaster in Puerto Rico offers a rare opportunity for political change.

The coalition against the law crosses party lines. Senator John McCain, the Arizona Republican, has emerged as one of the law’s fiercest critics. Puerto Ricans have long disliked the law, complaining that it raises the price of many goods for the territory, whose economy is already in shambles. Assessing the exact cost, however, is all but impossible. The GAO found that rates to Puerto Rico had dropped between 2006 and 2010, but effectively threw up its hands in despair and said it was too complicated to calculate what effect removing or altering the Jones Act might have.

Rosselló, a Democrat, hinted at this debate during an interview on MSNBC Wednesday, in which he asked for the waiver and added, “We can have a larger discussion later if [the Jones Act] is important in the long run or not.” A group of Democrats in the House, led by Puerto Rican-born New Yorker Nydia Velazquez, this week called for a one-year waiver of the Jones Act for Puerto Rico.

Arrayed against changing the Jones Act are the shippers, longshoremen, and others involved in the existing trade, as Trump indicated in his remarks Wednesday. “The power of this maritime lobby is as powerful as anybody or any organization I have run up against in my political career,” McCain said in 2014.

Issuing a 10-day waiver is politically palatable, but Furth says it’s also inadequate. “A year, two-year, three-year waiver would actually allow American workers to have jobs funded by the Puerto Rico rebuilding,” he says. “I hope there’s a message that says, this isn’t just about charity. Free trade with ourselves benefits everyone.”

The obvious endpoint of this argument is that if waiving the Jones Act provides such clear benefits long after the storm has passed, but while rebuilding is ongoing, why should it exist at all?

That’s part of a much longer political fight that’s been raging over the Jones Act for years. Right now, the American public demands action—and it will get action, in the form of short-term waivers, even if that’s not the most effective way to help Puerto Ricans.