[Congressional Record Volume 144, Number 139 (Wednesday, October 7, 1998)]
[House]
[Page H10009]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                    TOUGH PROBLEMS OF PROTECTIONISM

  (Mr. SMITH of Michigan asked and was given permission to address the 
House for 1 minute and to revise and extend his remarks.)
  Mr. SMITH of Michigan. Mr. Speaker, in the Monday's Wall Street 
Journal there was an editorial that talked about the Jones Act. The 
Jones Act is legislation that was passed in the 1920s that is pretty 
much pure protectionism. It says that only shippers of sea-going 
vessels that own ships that were built in the United States can ship 
from one U.S. port to another.
  Now, we are running into a problem where U.S. shipyards are not 
building those ships. Especially at this time with the crunch on 
farmers and low commodity prices and, added to that problem of low 
prices a lack of transportation, we need to take a serious look at this 
protectionist law.
  I hope my colleagues will read the Wall Street Journal editorial that 
was in Monday's paper. We need to address these tough problems of 
protectionism that punishes American consumers and American producers.
  The agricultural economy is reeling under historically low commodity 
prices coupled with multiple-year disaster and weather related 
problems, plus the loss of export markets due to the Asian financial 
crisis. Farm income in my state of Michigan is predicted to be down by 
10-20% depending upon the type of farming operation. The last thing 
American agriculture needs in another market hindrance.
  Last year, grain and other feedstocks were left on the ground due to 
a lack of adequate transportation options. All indications suggest we 
will be faced with the same problem again this year. I understand that 
USDA and DOT have devised a plan to assist agricultural producers in 
transporting their goods to market, but the plan does not address a 
critical aspect of our transportation system that has led us to this 
problem--the utter lack of deep-sea transportation options available to 
America's agricultural producers.
  American ship operators are forced to do business under the 
restrictions of an archaic 1920's law known as the Jones Act. The Jones 
Act restricts the transportation of goods from one U.S. port to another 
(even via a foreign port) to vessels which are built and flagged in the 
United States and owned and operated by American's. Because U.S. 
shipyards do not build large commercial ships and operators are unable 
to import vessels built abroad, there is only one bulk carrier left in 
the Jones Act fleet. No new bulk carriers are slated to be built in the 
next five years.
  What this means is that shippers are unable to transport bulk 
commodities at reasonable rates along our nation's coasts. There are 
barges available to some shippers, but they are not competitive for the 
transportation of bulk commodities. According to agricultural 
transportation specialists, if only 2% of our nation's agricultural 
commodities moved by deep-sea transportation, that would be enough to 
relieve the excess pressure on the railroads.
  This will never happen until we have common sense reform of the Jones 
Act. I have introduced H.R. 4236, the Shipping Relief for Agriculture 
Act, that would allow U.S. ship operators the ability to purchase 
vessels used for the transportation of bulk commodities on the 
international market. Repealing the U.S. build requirement for ocean-
going, bulk carriers is absolutely necessary if we expect agriculture 
shippers to be able to transport their products domestically by sea.
  Jones Act reform is vital to America's agricultural economy and I 
urge this body to seriously consider this issue.

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