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2020 Democratic Hopefuls Need to Stop Pandering, Actually Commit to Helping Puerto Rico

March 20, 2019 in Economics

By Federico A. de Jesús, Colin Grabow

Federico A. de Jesús and Colin Grabow

While Democratic presidential hopefuls have been
making their way to Puerto Rico
win support
from both island residents and their diaspora on
the mainland, it’s actually a Republican who has
introduced a bill
that would provide immediate relief to the

Sen. Mike Lee, R-Utah, is heading the efforts to repeal a
restrictive trade law known as the Jones Act. This should be a
bipartisan issue, as the Jones Act has been nothing but trouble for
the people of Puerto Rico. And now, more than 30
local and national organizations
are urging all presidential
candidates — of both parties — to support a
comprehensive policy platform in their campaigns that addresses the
most pressing issues facing Puerto Rico, including a call to exempt
the island from the Jones Act.

For starters, the
Jones Act
, which has been in place since 1920, mandates that
goods transported between U.S. ports be conducted by vessels that
are U.S.-flagged, U.S.-crewed, U.S.-owned and U.S.-built. Such
requirements don’t come cheap. Ships constructed in U.S. shipyards
are commonly estimated to cost
up to five times
more than those built elsewhere, and they are

nearly three times
more expensive to operate. These costs are
ultimately passed along to consumers who get stuck paying what
amounts to a de facto Jones Act tax. But instead of this money
going into public coffers, it is used to fill the bank accounts of
a few corporate shipowners.

By supporting a Jones Act
exemption, Democrats will raise economic growth, rein in corporate
interests and encourage competition.

This all hits Puerto Rico particularly hard. Except for the
relatively small number of goods flown in on airplanes, everything
not produced on the island must be brought in by ship, much of it
from the U.S. mainland.

The cost of bad laws

A new report found that transporting containers to the island
was 2.5 times more expensive from the U.S. than from foreign ports.
That translates into
$367 million in added costs
for food and beverages alone.
Another report from 2019, meanwhile, placed excess shipping costs
$569 million
and said that prices on the island are $1.1
billion higher than they would be without the Jones Act.

For an island of only 3.2 million U.S. citizens with a poverty
rate of more than 44 percent,
such numbers constitute a terrible economic strain. These extra
costs mean less money in the pockets of Puerto Ricans and increased
profits for shipping companies.

Adding insult to injury, …read more

Source: OP-EDS

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