Keystone XL pipeline bill amendment angers shipbuilders - Trade Only Today

Keystone XL pipeline bill amendment angers shipbuilders

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Arizona Sen. John McCain’s effort to repeal a U.S.-build requirement that is part of the Merchant Marine Act of 1920 is drawing the ire of many who say his amendment would undermine the entire domestic maritime industry and threaten thousands of jobs.

An amendment that the Republican senator is tacking onto the Keystone XL Pipeline bill would repeal the law — also known as the Jones Act — which “requires that that all goods shipped between waterborne ports of the United States be carried by vessels built in the United States and owned and operated by Americans," The Daily Caller reported.

McCain and other Jones Act critics argue that the statute is outdated and increases the cost of transporting goods. The shipbuilding industry is launching a counteroffensive against the effort to repeal what the Caller described as “a protectionist law that artificially raises domestic shipping costs.”

McCain says the rule is "taking money directly out of the pockets of American consumers. I hope my colleagues will join in this important effort to repeal this archaic legislation to spur job creation and promote free trade,” according to a Newsmax report.

His amendment would undermine the U.S. maritime industry and threaten the more than 400,000 jobs it supports nationwide, said an opinion piece in The Hill that was written by Rep. Linda Sanchez, D-Calif.

“After years of stagnation, the American maritime industry is investing a record amount in new ship construction, with American shipyards building many modern, state-of-the-art vessels,” Sanchez wrote. “The production of these vessels provides stable, high-paying manufacturing jobs for American workers and contributes $36 billion to gross domestic product. This amendment would stifle that progress and the associated economic benefits.”

The amendment would “severely undermine the domestic maritime industry and jeopardize hundreds of thousands of American jobs,” Sanchez wrote.

"McCain's amendment would result in the outsourcing of U.S. shipbuilding to foreign nations," putting "our entire U.S. fleet in jeopardy," Coast Guard Commandant Adm. Paul Zukunft told Politico.

McCain "is tangling with the shipbuilding industry, which has long had a frosty relationship with the new chairman of the Senate Armed Services Committee because of his frequent criticisms of the Navy's Littoral Combat Ship and its Ford-class aircraft carrier,” the Politico report said.

Tony Munoz, publisher and editor-in-chief of The Maritime Executive, also wrote an opinion piece criticizing the amendment.

"Lifting the Jones Act would open U.S. markets to foreign competition and might decrease prices for consumers, but at what cost?" Munoz wrote.

"McCain’s laissez-faire sentiments would actually destroy U.S. jobs, lower personal income, devastate U.S. vessel-operating companies and obliterate American shipbuilders, never mind the national security impact.”

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