Footnotes:

(1) American Classic Voyages had been allowed to use the foreign-built SS Patriot, which it bought from Carnival Cruise Lines, provided they built two new ships for $1.4 billion from Ingall’s Shipbuilding in Senator Trent Lott’s hometown. This legislation would also have given Voyages a monopoly on Hawaiian Islands cruising. But that all seems moot now.

(2) SS Independence the last cruise ship and full discussion of the PSA by US House, Subcommittee on Coast Guard and Maritime Transportation, Committee on Transportation and Infrastructure.

(3) US DOT:"Airline cabotage is the carriage of air traffic that originates and terminates within the boundaries of a given country by an air carrier of another country. Rights to such traffic are usually entirely denied or severely restricted."

(4) The Jones Act is "ferociously defended by dedicated lobbies" as USA Today puts it. USA Today, 04-18-1994, pp. 11.

(5) Rep. Abercrombie’s list of PAC contributions for 1998-2000. Compare these with the Members of the Maritime Cabotage Task Force.

Notes:

It is difficult to understand the rationale for supposedly protecting American ships considering that since the legislation was enacted the U.S. merchant fleet has declined to a minor part of the world's fleet. Click for graph.

In 1997 the Navy League reported that ships on order for over 1,000 tons the U.S. had 1% of orders whereas Japan had 35%.

See two previous columns on this issue:

End Jones Act now.

Jones Act reform needed now.

2

Repeal bars to cruise ships

Idle ships in the Mediterranean could give Hawai'i tourism a shot in the arm.

In the wake of American Classic Voyages demise, and also our need to boost the economy, we should push for immediate repeal of the federal legislation that makes it so difficult for foreign cruise ships to operate out of Hawaii.(1)

The Passenger Services Act of 1886 prohibits the carrying of passengers by foreign ships between U.S. ports. All, repeat all, the world’s cruise ships today are foreign ones. With Voyages’ fifty year-old SS Independence out of service, there are no longer any U.S. cruise ships.(2)

Were this Act to be repealed, many more cruise ships would ply Hawaiian waters, spending much needed dollars with our retailers, and staying in hotels as they typically do before or after a cruise. This would give our tourism a quick shot in the arm since currently Mediterranean cruises are none to popular and idle ships could be put to work here immediately.

At the same time it would be useful to repeal similar legislation affecting airlines.(3) The cabotage legislation prohibits foreign airlines from taking on new passengers in Hawaii on their way to the Mainland. It is why many foreign airlines now overfly Hawaii. With repeal of this legislation, foreign airlines could offer passengers traveling between Asia and the Mainland a stopover option. This inducement might well provide our tourism with another shot in the arm.

And while we are at it, we should also push for repeal of the Jones Act. This legislation prevents Hawaii companies from bringing in food and other necessities from the Mainland at the lowest shipping costs; they are forced to use much higher priced American cargo ships. This means that we are paying far more for the goods we use than is necessary.

In addition, we tend to import more from foreign countries, to the detriment of U.S. Mainland producers, since the shipping costs are so much less for goods coming from Asia on foreign cargo ships.

It is difficult to tell what the Jones Act is costing Hawaii residents since shipping interests have blocked any study of its effects. However, Guam's Governor estimated that if Guam were only able to reduce shipping costs a "modest" 30%, Guam's families would each save $1,045. The U.S. General Accounting Office calculated in 1988 that the Jones Act was costing Alaska's families between $1,921 and $4,821 annually. In 1996, Senator Whitney Anderson estimated it cost the average Hawaii family $1,900 annually. The Jones Act Reform Coalition says it is more like $4,000 per family. Whatever the amount, we in Hawaii could all use it right now.

However, repeal of this legislation will be difficult because cabotage is "ferociously defended by dedicated lobbies," as USA Today put it.(4)

Why don’t our federal legislators just do the right thing and just repeal this legislation? Quite simply, “follow the money.” Rep. Neil Abercrombie, for example, received 20% of his campaign contributions—over $150,000—from the cabotage forces during the last election.(5) This is tough money to turn away from, let alone risk losing one’s reputation for political honesty, which is to say, that having been bought that one stays bought.

One way to start the ball rolling would be for the State House and Senate to jointly and unanimously agree on a resolution to be sent to Congress requesting repeal.

It will be good for Hawaii. Far more jobs will be created than will be lost, our cost of living will be less and Hawaii voters will be so grateful that our federal officeholders will not need as much campaign funding; a true win-win result.

Cliff Slater is a regular columnist whose footnoted columns are at www.lava.net/cslater