01 Juli 2010

[010710.EN.BIZ] Debate Over Foreign Ship Ban In U.S

(WASHINGTON) The sign over the Dog House Deli in Pensacola Beach, Florida, delivered the message: 'President Barack Obama Waive Jones Act.' Nate Holler, who runs the family- owned hotdog shop, posted the plea when Mr Obama visited the coastal town on June 15.

He is among coastal residents who say that the president should waive a 90-year-old maritime law to speed foreign assistance in fighting the BP plc oil spill in the Gulf of Mexico.

'We have all these other countries willing to help,' Mr Holler, 24, said in an interview. 'There is not enough happening.'

The Jones Act, which bars foreign ships from transporting goods between US ports, has become a flash point in debate over the spill. Opponents of the law, which applies to clean-up vessels within three miles (4.83 km) of shore, say that it should be suspended or repealed.

The administration says that foreign vessels are already helping to combat the worst US oil spill so a blanket waiver is not needed.

'There are a lot of foreign vessels operating offshore,' Coast Guard Admiral Thad Allen, the government's incident commander, told reporters on June 25. The Coast Guard would be happy to aid in requests for waivers, 'but to date, since they're operating outside three miles, no Jones Act waiver has been required'.

The US is accepting 22 offers of help from 12 countries and international organisations, the State Department said in a statement on Tuesday.

The aid includes 'two high-speed skimmers and fire containment boom from Japan', according to the statement.

The State Department did not immediately respond to a question concerning whether the Jones Act would be waived for the vessels. Twenty-four foreign vessels are already working in the Gulf, according to Clark Stevens, a spokesman for the Homeland Security Department, in a phone interview.

Coast Guard Rear Admiral James Watson, the federal on- scene coordinator in the Gulf, has put in place a process to allow Jones Act exemptions if they prove necessary for foreign skimming vessels to operate within three miles of the coast, according to Mr Stevens.

That has not eliminated assertions that the Jones Act is slowing efforts to help. Fred McCallister, an investment banker in Dallas with Allegiance Capital Corp, was due to tell a Senate Commerce Committee hearing yesterday that his proposal to assemble a fleet of foreign ships for clean-up duty has been rebuffed by both BP and the Coast Guard.

'Allegiance Capital took it on itself to submit a request for a Jones Act waiver' on June 21 and has not received a formal response, Mr McCallister said in testimony prepared for the hearing.

Mr McCallister said in a letter to Admiral Allen that he was seeking waivers for 12 skimming boats and a Greek cruise ship that could be used to store equipment and house 800 workers.

The Jones Act was passed on the grounds that preserving a US-flagged fleet would promote domestic and international commerce and provide a merchant marine that can be called into action in wars and emergencies.

Today, the law is championed by US shipping companies such as Horizon Lines Inc and Alexander & Baldwin Inc's Matson Navigation Co and by maritime unions.

'It's an urban myth that the Jones Act is the problem' in the clean-up effort, said Mark Ruge, counsel for the Maritime Cabotage Task Force, a Washington- based group representing companies led by Horizon and Matson.

The law preserves a domestic shipping industry that generates US$100 billion a year in revenue, according to Mr Ruge.

Kimberly McCloskey, an external spokeswoman for Horizon of Charlotte, North Carolina, and Jeff Hull, a spokesman for Oakland, California-based Matson, referred questions to Mr Ruge's group.

Senator John McCain, an Arizona Republican, introduced legislation last week to repeal the Jones Act.

He said in a statement that eliminating the 'antiquated and protectionist' law may add almost US$1 billion a year to the US economy by lowering shipping costs.

He based the estimate on a 2002 study by the US International Trade Commission that found the economic cost of the law was as much as US$656 million in 1999.

Source : Business Times, 01.07.10.

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