Stay the Course: Maintaining America’s Maritime Security
America needs a strong navy, but we also need a strong civilian fleet. Our very first Congress recognized this in 1789 and adopted laws to promote a strong maritime presence at sea and in our domestic waters.
Since then we’ve followed the example set by the Founding Fathers and maintained special standards to preserve our maritime security. But today, some think the policy is old and unnecessary. Because foreign nations subsidize their commercial fleets and offer us cut-rate prices to forego American vessels, some believe we should let their ships carry all our cargoes. They consider money has priority over security.
Already, foreign-flagged vessels carry a vast majority of the international cargo in and out of U.S. ports. Some propose that foreign vessels should now be allowed to do more, namely to transport cargo domestically, between U.S. ports, on the Great Lakes, and along waterways like the Mississippi River. Those domestic routes now by law are currently open only to U.S. ships.
The champion of inviting foreign ships into our purely domestic waters is Senator John McCain (R-Arizona). Although his patriotic devotion is beyond question, his “Open America’s Waters Act of 2017” (S.1561) is just another attempt to loosen our borders.
No other senator has agreed to co-sponsor that bill, which he has also persistently tried to attach to other legislation, and hopefully, it will stay that way. The bill would undo what is known as the Jones Act, the 1920 law that continues pro-merchant marine policies that go back to 1789 when the very-first Congress sought to reduce our dependence on foreign toil to carry cargo. These maritime security laws were enacted even before the creation of the Coast Guard in 1790 and the U.S. Navy in 1797.
The Jones Act does not restrict foreign-flagged vessels from engaging in international trade at our ports. But for cargo moving solely within and along our own borders, the Act requires using American-built vessels that are at least 75% American-owned with crews who are at least 75% American staffed. Foreign vessels may deliver goods at only one U.S. port then must leave for other nations before they may return. This means only American vessels with American crews handle shipments between U.S. ports.
In exchange, American shippers and seamen make themselves available for sealift capacity whenever the U.S. military needs them. That alone saves us billions because we’re not forced to build and maintain extra military ships to meet the just-in-case needs.
Senator McCain condemns the Jones Act saying it costs American consumers by interfering with “free and open” trade. But lower cargo costs on foreign vessels result from subsidies paid by their countries, which is how they have cornered global market share. Repealing the Jones Act would reward those nations by turning over American markets to them as well.
Multiple Asian and European nations offer major assistance to their shipbuilders. They realize that this is about much more than money.
China, for example, recognizes that control of shipping and shipping lanes creates dominance through economic protection and military projection, so it aggressively is expanding on the high seas. Large subsidies are seen as a small price to pay for enlarging their power. One report calculates that government help “artificially lowered Chinese firms’ costs by between 15-20%.”
That is but one of many expansions of the decades-long global system of shipyard subsidies we’ve seen this year including:
- India decided to continue its shipbuilding subsidy of 20-percent of the contract price
- France nationalized its largest shipyard (Saint-Nazaire) to protect it from foreign interests
- South Korea’s government arranged a $2.6-billion bailout of shipbuilder Daewoo
In short, other nations buy market share and dominance in maritime trade by reducing net costs for their shipping industries, so their ships can offer lower rates with higher profitability.
Opponents of the Jones Act argue that we can save money if we turn over our domestic cargo to these foreign-subsidized fleets. That would be surrender, not savings. We would sell our security to save a few dollars and open new routes that terrorists might exploit. It would mean America loses the trade wars, loses jobs, and loses national and homeland security as foreign vessels and foreign crews ply our inland waterways and move our goods between our domestic ports. It also would reduce the supply of American-flagged vessels that can be converted to military use whenever necessary, as has happened many times in our history
Ending the Jones Act would be the ultimate example of a foolish effort to be thrifty. Even the father of modern capitalism, Adam Smith, wrote in The Wealth of Nations that our nation must protect its maritime trade from foreign competition. As a result most every nation has its own variant of our Jones Act, to protect its domestic waterways and trade.
Our Founding Fathers heeded Smith when the very first Congress adopted protections for American ships. Today’s Congress should not set a different course.
Former Congressman Ernest Istook served on the House subcommittees that funded national defense, homeland security, and transportation. He now teaches political science at Utah Valley University.