Photo: U.S. Shipping
A federal law that bans foreign vessels from engaging in coastwise shipping within U.S. territory adversely affects Puerto Rico’s troubled economy, according to studies cited by the island’s Senate.
“Puerto Rico is suffocating” with this law, the chairwoman of the Senate of Puerto Rico’s Committee on Civil Rights, Citizen Participation and Social Economy, Rossana Lopez, said.
The economic woes confronting this U.S. commonwealth, now in its eighth year of recession and double-digit unemployment, have prompted a fresh look at a law seen as hindering an economic recovery.
The lawmaker with the governing, center-left PPD party said the law slows the island’s economic development by impeding competition and keeping prices high.
She said experts at a meeting during this month’s Forum on Marine Transportation and Logistics, organized by the Pontifical Catholic University of Puerto Rico, backed up her assessment.
“It’s suffocating us. Elimination of the law on cabotage (sea- or airborne transport of goods of passengers within a country) would create revenue that would help us,” the senator said, referring to a dozen studies highlighted during that meeting.
One of the studies, which dates to 1999 and was prepared by the United States International Trade Commission, calculated that shipping costs would fall by more than 20 percent if the cabotage laws were repealed.
The U.S. Government Accountability Office maintains that the regulations embodied in the Jones Act do not affect the Caribbean island’s economy, but Lopez’s committee is working to counter that argument.
The senator said the GAO overlooks the fact that Puerto Rico “may be paying up to $1 billion in additional shipping costs for merchandise that arrives on the island from abroad and must first arrive at a U.S. mainland port.”
A resolution exempting Puerto Rico from the Jones Act needs to be approved because “practically all” goods consumed on the island are imported, she said.
An economics professor at the University of Puerto Rico, Jose Alameda, said he agreed with the legislator, telling Efe the Jones Act is “anachronistic.”