AMO Currents - AMO, AMOS oppose legislative amendment that would eliminate Jones Act's U.S.-build requirement, weaken national defense capabilities, cripple booming domestic maritime industry

AMO Currents - Posted: January 15, 2015

AMO, AMOS oppose legislative amendment that would eliminate Jones Act's U.S.-build requirement, weaken national defense capabilities, cripple booming domestic maritime industry

Senator John McCain (R-AZ) on January 13 introduced an amendment to S. 1, legislation to approve the Keystone XL Pipeline, that would eliminate the Jones Act requirement that vessels transporting cargo in U.S. coastwise trades be built by American shipyards. The amendment introduced by Senator McCain, chairman of the Senate Armed Services Committee, would weaken national defense capabilities, have a devastating effect on the booming domestic maritime industry and is opposed by American Maritime Officers and American Maritime Officers Service.

If approved and enacted into law, this destructive amendment to an unrelated bill would undermine the American shipyard industrial base, as well as billions of dollars in investments by U.S. companies that have built and are building vessels for operation in the U.S. coastwise trades.

The Carl Levin and Howard P. "Buck" McKeon National Defense Authorization Act for Fiscal Year 2015, enacted in December 2014, states in part: "(T)he Department of Defense benefits from a robust commercial shipyard and ship repair industry and current growth in that sector is particularly important as Federal budget cuts may reduce the number of new constructed military vessels."

As noted by a recent Government Accountability Office study: "Although the Department of Defense does not administer or enforce the Jones Act, the military strategy of the United States relies on the use of commercial U.S.-flag ships and crews and the availability of a shipyard industrial base to support national defense needs."

As noted by the Navy League of the United States: "The loss of the American-built provisions in the Jones Act would have devastating ripple effects on all the sea services. Its immediate impact would be a reduction in the number of ships built in U.S. shipyards, which would result in a loss of jobs, a loss of industrial knowledge and skills, and a loss in America's edge in shipbuilding quality and technology. This would mean all U.S. Navy, Marine Corps and Coast Guard ships, which of course will be built in the United States, would have a higher cost per ship due to increased overhead costs, and would have a less reliable industrial base. A strong industrial base is necessary for innovation and quality."

As noted by the U.S. Maritime Administration, American shipyards are building record numbers of modern, state-of-the-art vessels for the Jones Act trades in all sectors with more vessels on order. A recent MARAD study cited the "economic importance" of the American shipbuilding and repair industry, with employment of more than 400,000, annual labor income of about $24 billion, and annual gross domestic product of $36 billion.

The Jones Act and all of its components serve as the foundation of the U.S. domestic maritime industry. Undermining this critical U.S. statute would severely compromise key national defense and economic interests, cripple the American shipbuilding base and collapse an industry that is building the future of U.S. domestic shipping and the U.S. merchant marine.