McCain introduces bill to kill Puerto Rico shipping restrictions

WASHINGTON (Reuters) - Republican senators John McCain and Mike Lee introduced a bill on Thursday to permanently waive shipping restrictions on Puerto Rico, saying a temporary waiver from the Trump administration is “insufficient” to help the island rebuild from Hurricane Maria.

A cargo ship is seen in front of a port after the area was hit by Hurricane Maria in San Juan, Puerto Rico September 24, 2017. REUTERS/Carlos Garcia Rawlins

President Donald Trump’s administration earlier on Thursday waived the restriction known as the Merchant Marine Act of 1920, or the Jones Act, for Puerto Rico for 10 days, after a request by Puerto Rico’s governor, Ricardo Rossello.

Opponents of the Jones Act, which bars foreign vessels from shipping goods between U.S. coasts, say it hurts consumers on U.S. islands, including Puerto Rico and Hawaii, by adding shipping costs to imports of basic goods like food and fuel.

McCain called the Jones Act an “antiquated, protectionist law that has driven up costs and crippled Puerto Rico’s economy.”

In 2013, a Federal Reserve Bank of New York report said the Jones Act hurts Puerto Rico’s economy. It estimated that shipping costs from the U.S. East Coast to Puerto Rico are double what they are to the nearby Dominican Republic, thanks mainly to the Jones Act.

In addition, the U.S. Virgin Islands have been exempt from the Jones Act for decades, which opponents of the law say is unfair to Puerto Rico.

It was unclear whether McCain could gain widespread support for the bill that would waive the law, which is supported by shipping and security interests.

Not only do U.S. ship builders support the Jones Act, but also a wide array of industries that build parts that go into ships, businesses that are spread throughout the country.

President Donald Trump, before his administration waived the law temporarily, pointed out that “a lot of shippers and ... a lot of people that work in the shipping industry” did not want the restrictions waived for Puerto Rico.

In 1998, McCain sponsored legislation to allow waivers of the law, a measure that created exemptions that are in place today. In 2010, 2015 and this past July he introduced legislation to fully repeal the restrictions.

Reporting by Timothy Gardner; Editing by Lisa Shumaker