Hawaiʻi lawmakers seek exemption from Jones Act
Members of both the Hawaiʻi State Senate and House of Representatives have filed concurrent resolutions seeking an exemption for Hawaiʻi from a provision in the Merchant Marine Act of 1920 (better known as the Jones Act) requiring that all vessels engaging in trade between U.S. ports be built in the United States.
To comply with the Jones Act and engage in coastwise trade between U.S. ports, a ship must:
Fly the U.S. flag;
Be built in a U.S. shipyard;
Be at least 75 percent owned by U.S. citizens; and
Be crewed by U.S. citizens or permanent residents.
Proponents of exempting Hawaiʻi from the domestic build requirement say it would create a larger market and foster greater competition in ocean shipping for the noncontiguous trades. They also argue it would have no negative effect on jobs—a point that is contested by local labor unions and activists.
“A U.S.-build exemption would allow U.S. ship owners to acquire foreign built ships, register them under the U.S.-flag and operate them in the domestic noncontiguous trades,” said Hawaii Shippers Council President Mike Hansen. “The advantage of this reform is new ships built in South Korea and Japan are a fifth the cost of comparable ships built in the U.S., and that dramatically lower capital cost will lead to greater competition and moderate freight costs by lowering barriers to entry and increasing contestability in the shipping market place.”
This past Friday, Republican State Senator Sam Slom (District 9, Hawaiʻi Kai, Kuliʻouʻou, Niu Valley, ʻĀina Haina, Waiʻalae-Kahala, Diamond Head) filed concurrent resolutions SR10 and SCR34. Joining him as co-sponsors are Democratic Senators:
Will Espero (District 19, ʻEwa Beach, ʻEwa by Gentry, Iroquois Point, ʻEwa Villages);
Brickwood Galuteria (District 12, Waikīkī, Ala Moana, Kakaʻako, McCully, Mōʻiliʻili);
Breene Harimoto (District 16, Pearl City, Momilani, Pearlridge, ʻAiea, Royal Summit, ʻAiea Heights, Newtown, Waimalu, Hālawa, Pearl Harbor);
Clarence Nishihara (District 17, Waipahu, Crestview, Mānana, Pearl City, Pacific Palisades);
Gilbert Keith-Agaran (District 5, Wailuku, Waiheʻe, Kahului);
Lorraine Inouye (District 4, Hilo, Hāmākua, Kohala, Waimea, Waikoloa, Kona);
Russell Ruderman (District 2, Keaʻau, Pāhoa, Kalapana, Kapoho, Kurtistown, Mountain View, Glenwood, Volcano, Pāhala); and
Gil Riviere (District 23, Kunia, Schofield Barracks, Mokulēʻia, Waialua, Haleʻiwa, Kawailoa, Waimea, Pūpūkea, Kawela, Kahuku, Lāʻie, Hauʻula, Punaluʻu, Kaʻaʻawa, Kualoa, Waikāne, Waiāhole, Kāneʻohe).
The companion resolutions in the House (HR21 and HCR46) were introduced by Democratic Representative Sam Kong (House District 33, ʻAiea), and Republican Representatives Cindy Evans (District 7, North Kona, North Kohala, South Kohala), Lauren Cheape-Matsumoto (District 45, Schofield, Mokulēʻia, Waialua, Kunia, Waipiʻo Acres, Mililani), Andria Tupola (District 43, Māʻili, Nānākuli, Ko ʻOlina, Honokai Hale, Kalaeloa, ʻEwa), and Gene Ward (District 17, Hawaiʻi Kai, Kalama Valley).
The resolutions urge Congress to exempt Hawaiʻi (and other non-contiguous states and territories) from the domestic build requirement because of its restrictive impact on the market for shipping goods to Hawaiʻi.
“The Jones Act was originally meant to protect the shipping industry and maritime trade, but almost a century has gone by and it’s easy to see that the law does not serve its original purpose. Today, the effect of the Jones Act is that people in Hawaiʻi, Alaska, Puerto Rico and Guam pay significantly more than the rest of the country for everyday necessities,” said Senator Slom. “It is time for our U.S. Congress to address the role that the antiquated Jones Act plays in the high cost of living. I am grateful that so many of my colleagues in both the Senate and the House see that an exemption to the U.S. build requirement can make a huge difference in what we here in Hawaiʻi pay for goods.”
