Category Archives: Legislation

TI Commends Nomination of MARAD Administrator

TI Commends Nomination of MARAD Administrator

For Immediate Release

On Wednesday, June 21, the White House announced its intent to nominate Rear Admiral (U.S. Navy, ret.) Mark Buzby as the Administrator of the U.S. Maritime Administration (MARAD) under the U.S. Department of Transportation. Transportation Institute commends the Administration on their selection of Admiral Buzby, an experienced Navy veteran and longtime friend of the U.S. maritime industry.

Admiral Buzby graduated from the U.S. Merchant Marine Academy in 1979 and holds graduate degrees from the U.S. Naval War College and Salve Regina University. He served an illustrious 34 year career in the Navy, including as Commander of the Military Sealift Command and Commander of the destroyer USS Carney. Currently, Admiral Buzby is the President and CEO of the National Defense Transportation Association.

U.S. Maritime Coalition on NAFTA Modernization

U.S. Maritime Coalition on NAFTA Modernization

We write in response to your request for comments on negotiating objectives regarding modernization of the North American Free Trade Agreement (NAFTA) with Canada and Mexico published in the Federal Register on May 23, 2017. Request for Comments on Negotiating Objectives Regarding Modernization of the North American Free Trade Agreement with Canada and Mexico (USTR-2017-0006), 82 Fed. Reg. 23699 (May 23, 2017). The United States is not currently a participant in any international agreements involving maritime services, including NAFTA. For the reasons set forth below, we strongly urge you to continue to exclude maritime matters from NAFTA.

The United States Maritime Coalition (USMC) represents U.S. maritime interests that operate, crew, and build U.S.-flag ships for the domestic and international trades. It is an industry that provides significant economic, homeland, and national security benefits to the United States. Importantly, as has been noted by the U.S. Government Accountability Office, an independent, nonpartisan agency that works for Congress, “the military strategy of the United States relies on the use of commercial U.S.-flag ships and crews and the availability of a shipyard industrial base to support national defense needs.”

Over the last 30-plus years, the maritime industry has often expressed its views to the Office of the United States Trade Representative (USTR) opposing possible coverage of maritime matters under the multilateral, regional, and bilateral free trade agreements  (FTAs), including NAFTA. The industry — carriers, dredgers, shipyards, and seafarers — have had a simple message: it strongly opposes the inclusion of maritime matters in trade agreements because it is detrimental to the United States’ national defense and economic interests. Recognizing these negative impacts to the United States, the USTR and every Administration worked to ensure maritime matters were not included in the General Agreement on Tariffs and Trade (GATT), the General Agreement on Trade in Services  (GATS), or any regional or bilateral trade agreements to which the U.S. is a party.

Today, the:

  • GATT permanently grandfathers the U.S.-build requirement of our cabotage laws.
  • GATS effectively excludes maritime transportation services because no commitments of any kind have been made by the U.S. Government.
  • NAFTA expressly “reserves the right to adopt or maintain any measure relating to the provision of maritime transportation services and the operation of U.S.- flagged vessels” and comprehensively excludes United States’ maritime transportation goods and services, including under Annexes 301.3, 307.1, and 307.3; Annex II covering water transportation services; and Annex IV exemptingtreatment for maritime matters.
  • Regional and bilateral U.S. FTAs also have expressly excluded maritime transport services (addressing only the landside aspects of port activities).

By taking these steps in NAFTA and all subsequent trade agreements, the United States did not in any way restrain or limit our ability to maintain and promote a strong U.S.-flag fleet and maritime industry in domestic and foreign commerce or to ensure a shipbuilding industrial base to meet national defense needs. The United States also retained its effective unilateral ability to open up foreign markets in maritime and maritime-related services.

The U.S. maritime industry significantly contributes to our economic, national, and homeland security. Nationally, the domestic maritime industry supports nearly 500,000 jobs, a gross economic output of over $92.5 billion annually, and worker incomes of $29 billion annually with a $10 billion tax impact. There are approximately 40,000 vessels in the American domestic fleet. The U.S. shipbuilding and repairing industry contributed almost 400,000 jobs, $25 billion in labor income, and $37 billion in GDP each year.

We do not believe that anything has changed here at home or abroad that would alter our view or change the U.S. Government’s position with respect to the inclusion of maritime matters in NAFTA or any other trade agreement. Moreover, nothing has been presented that would indicate why or how the inclusion of maritime in a modernized NAFTA would benefit our American maritime industry and the United States’ national and economic security.

We deeply appreciate the U.S. Government’s support for American cabotage laws and the American maritime industry. There is no justification for any aspect of the domestic maritime transportation services to be the subject of discussion or covered by NAFTA renegotiations; to do so could mean the end of U.S. ownership and crewing of vessels sailing our waters, which is why maritime matters were excluded from NAFTA. Moreover, the GATT permanently grandfathered the U.S. build requirement of our cabotage laws governing cargo, passengers, dredging, towing, and fishing, which NAFTA explicitly recognizes. That grandfather was fought and “paid for” during those negotiations. There is no reason to open domestic maritime services or the grandfather for discussion in NAFTA renegotiations, or in any other trade context for that matter.

International shipping, auxiliary services, and access to and use of port facilities also must not be included in a modernized NAFTA or any other trade agreement. To do so would imperil the ability of the United States to maintain and support in international commerce a U.S.- flag fleet necessary for national defense, homeland security, and economic security purposes (e.g., the Maritime Security Program and cargo preference laws). Including maritime matters in a modernized NAFTA or other trade agreements also would jeopardize the ability of the United States to open up foreign markets in these areas through a combination of bilateral negotiations backed by exceptionally effective unilateral trade remedies administered by the Federal Maritime Commission (i.e., the Foreign Shipping Practices Act and Section 19 of the Merchant Marine Act of 1920).

Our laws and regulations are clear and transparent. Our international trades are liberalized, as evidenced by the fact that roughly 98 percent of international trade with the United States occurs on foreign-flag vessels. NAFTA’s provisions excluding maritime matters, including the five cabotage laws — cargo, passengers, dredging, towing, and fishing — should be preserved as we do not believe it is desirable, appropriate, or necessary to include maritime matters in a modernized NAFTA or any other trade agreement context.

We appreciate the opportunity to comment on this important matter.

Sincerely,
James L. Henry
Chairman
U.S. Maritime Coalition

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This post is excerpted from a letter dated June 12, 2017 from James L. Henry, President of the Transportation Institute and Chairman of the U.S. Maritime Coalition, to Edward Gresser, Chair of the Trade Policy Staff Committee of the Office of the United States Trade Representative (USTR). This letter was written in response to USTR’s request for comments under the Federal Register (82 Fed. Reg. 23699) on negotiating objectives regarding modernization of the North American Free Trade Agreement. Read the full letter here.

Five Things to Know about the Jones Act

Five Things to Know about the Jones Act

The Merchant Marine Act of 1920, commonly known as the Jones Act, is the fundamental law of the U.S. maritime industry. On the 97th anniversary of the enactment of the Jones Act, here are five things you should know about this key piece of legislation.

 

(1) The Jones Act is a cabotage law.

Cabotage is the trade between two ports within the same country. The Jones Act applies certain restrictions to vessels that can participate in cabotage, or coastwise trade. The principles of the Jones Act date back to the early formation of the United States, with the Tariff Act of 1789, which required all coastwise trade to be conducted on American vessels.

 

 

 

 

 

 

 

(2) To be a Jones Act vessel, there are specific requirements.

To qualify to participate in the Jones Act trade, a vessel must be built in the United States, flagged (or registered in the United States), be owned by a company with 75% U.S. ownership, and crewed by 75% American sailors. These requirements under the Jones Act create a stable investment climate for the maritime industry. The intent of the Jones Act was to create a reliable domestic shipping industry to support commerce, serve as a military auxiliary during times of war or national emergency, and support the shipbuilding industry.

 

(3) The Jones Act is a creator of American jobs.

The Jones Act supports 478,440 American jobs1. These jobs range from the captains on the ships, to the longshoremen at the ports, as well as the truck drivers who deliver the goods to the stores and individuals who use them. This number includes 82,040 jobs in the shipbuilding industry that are directly supported by the construction of Jones Act ships.

 

(4) The Jones Act is an economic driver.

The Jones Act produces $100 billion in economic output for the U.S. annually. American jobs in the U.S. maritime industry are routinely high paying; maritime academies consistently have the highest return on investment and highest earning graduates with an average yearly salary of $80,000 per year.

 

(5) Jones Act ships serve in times of national and international need.

American ships and American mariners have a strong and lengthy history of serving the U.S. and the world during times of need. In the immediate aftermath of 9/11, American vessels in the vicinity of Manhattan participated in the largest boatlift in history, transporting half a million people off the island in only 9 hours. During Operation Enduring Freedom/Iraqi Freedom, a Jones Act vessel operated by Tote served on charter to the Military Sealift Command from 2000-2003, conducting 25 trips to the Gulf to assist with the transport of supplies for rebuilding in Iraq and the return of war materials to the United States. After the Haiti earthquake, Crowley ships served in the earthquake relief and assured cargo delivery to the collapsed ports.

 

The Jones Act is a significant contributor to the national economy, homeland security, and national security. Because of these reasons, it has strong bipartisan support at all levels of government. To learn more about the Jones Act, visit: https://transportationinstitute.org/jones-act/

 

 

 

 

 

 

 

1These data are from a PwC study, Contributions of the Jones Act Shipping Industry to the US Economy in 2011, commissioned by the Transportation Institute in 2014.

Sen. Jack Reed Honored for Support of U.S. Maritime Industry

Sen. Jack Reed Honored for Support of U.S. Maritime Industry

WASHINGTON, D.C. – The Daniel K. Inouye Institute honored U.S. Senator Jack Reed of Rhode Island on Wednesday, May 17 for his long-standing support of the American maritime industry. Joined by dozens of maritime and Senate leaders, Sen. Reed received the Daniel K. Inouye Maritime Guardian Award for his strong leadership and dedication to the U.S. maritime industry.

Irene Hirano Inouye, widow of Sen. Inouye, presented the award to Sen. Reed, whose coastal state of Rhode Island ranks 4th per capita among all U.S. states for American maritime jobs.  Sen. Reed is the ranking member of both the Senate Armed Services Committee and the Senate Transportation Appropriations Subcommittee, where he has consistently supported programs important to the maritime industry. In 2016, Sen. Reed led the effort to restore federal funding for the Small Shipyard Grant Program which helps shipyards purchase needed equipment, improve efficiency, and train a skilled workforce for commercial shipyards while also supporting the military shipyard industrial base.

“We are honored to make this presentation to Sen. Reed who steadfastly carries forward the high priority Sen. Inouye placed on a strong U.S. maritime industry, which steps forward in service when called upon by our nation in times of crisis or conflict,” said Jennifer Sabas, Director of the Daniel K. Inouye Institute.

“I am deeply honored to receive this award and grateful to Irene and the Inouye Institute.  Senator Inouye was and continues to be an inspiration.  He fought and served with great courage, integrity, and patriotism.  To this day, his outstanding work on both the Appropriations and Commerce Committees continue to benefit Rhode Island’s maritime industry and our economy.  We in the Ocean State are proud of our maritime heritage, and from tourism to commerce to transportation, marine-related businesses are an important part of our economic future.  I am proud to support the hardworking men and women of the marine trades and I humbly accept this prestigious award on their behalf,” said Senator Jack Reed.

“Dan was widely respected for his leadership and respected voice dedicated to a vibrant and robust American maritime industry,” said Irene Hirano Inouye. “It is with pride in my husband’s memory that I am pleased to honor Sen. Reed with this year’s award for his exemplary leadership in support of the vital maritime industry.”

Prior to his death, Sen. Daniel K. Inouye had a distinguished tenure of more than 49 years of serving Hawaii in the U.S., the longest serving member to date. As president pro tempore of the Senate from 2010-2012 — third in line of presidential succession – Sen. Inouye was the highest-ranking public official of Asian descent in United States history. For his heroic actions as a member of the famed 442nd Regimental Combat Team—resulting in the loss of his right arm—the World War II veteran ultimately earned the nation’s highest award for military valor, the Medal of Honor.

James Henry, Chairman and President of the Transportation Institute said, “Sen. Reed’s support for the American Merchant Marine, which is crucial to our ability to project military forces around the world, is well-known and deeply appreciated.  He is a very worthy recipient of this award.”

Thomas Allegretti, Chairman of the American Maritime Partnership, called Sen. Reed “a champion of our industry and a worthy recipient of this award named in honor of Sen. Inouye, a great American leader.”

 

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About the Daniel K. Inouye Maritime Guardian Award

The Daniel K. Inouye Maritime Guardian award is modeled after one of the first Hawaiian weapons ever seen in the new world. Collected on one of Captain Cook’s journeys into the Pacific, it was made of wood and imbedded with teeth from a great white shark. Called the “lei o mano,” it was reserved for the warrior who was responsible for protecting the maritime resources and for ensuring safe passage on the seas. Over his years in the Congress, Sen. Dan Inouye received the “lei o mano” for his relentless efforts, and through this award, his legacy and commitment to a strong U.S. maritime sector is passed forward.

About the Daniel K. Inouye Institute

The Daniel K. Inouye Institute was established in 2013 to honor his legacy. A program fund of the Hawaii Community Foundation, the Daniel K. Inouye Institute will work with affiliated organizations to preserve the senator’s papers and tell his life story, support STEM education and civics learning, encourage international educational-cultural exchanges, and support collaborations between national institutions and organizations in Hawaii to widely share the Asian American and Pacific Islander experience.

About Transportation Institute 

Transportation Institute was established in 1967 as a Washington-based, non-profit organization dedicated to maritime research, education, and promotion. The Institute’s member companies participate in all phases of the nation’s deep sea, foreign, and domestic shipping trades. Many are contracted to the U.S. military services. All are of U.S. Registry – manned by American citizen-seamen, operating under the world’s highest safety and environmental standards, and proudly flying the American flag.

About the American Maritime Partnership (AMP)

American Maritime Partnership is the voice of the U.S. domestic maritime industry, a pillar of our nation‘s economic, national, and homeland security. More than 40,000 American vessels built in American shipyards, crewed by American mariners, and owned by American companies, operate in our waters 24/7, and this commerce sustains nearly 500,000 American jobs, $29 billion in labor compensation, and more than $100 billion in annual economic output. For more information about AMP, please visit www.americanmaritimepartnership.com.

Food for Peace Supports Maritime and Ag Industries

Food for Peace Supports Maritime and Ag Industries

USAID_Grain SenegalThe United States has been a leader in alleviating hunger around the world for more than 60 years. Through a variety of programs under the Department of Agriculture (USDA) and the U.S. Agency for International Development (USAID), Americans have been helping to feed billions of hungry people around the world through our in-kind food donation programs, including Food for Peace (P.L. 480), Food for Progress and Food for Education.

The Eisenhower Administration signed into law the Food for Peace Program, landmark legislation designed with two core functions in mind. Americans would generously provide food to hungry people across the world as a diplomatic tool, creating good will and helping to prevent potential conflicts before they could start.

In addition, the law required that the food be grown in the United States by American farmers, and shipped on American ships with American crews, thereby leveraging the quality and reliability of U.S.-grown commodities and sustaining the national defense sealift capacity provided by the U.S.-flag maritime industry. The United States Merchant Marine has been a proud partner with our colleagues in the agricultural community to keep this program going strong for more than six decades.

 

USAID_Ship Offloading YemenUnlike other foreign aid programs, Food for Peace has always had broad, bipartisan support because it yields a domestic economic benefit by promoting American jobs while also serving to help others abroad. For decades, the program has been working well as it was originally intended despite relentless attacks on the agricultural and maritime communities.

The previous Administration seemed determined to “reform” the program by shifting it from an in-kind based program that provides a domestic benefit, and turning it instead into an overseas cash giveaway program with minimal oversight or accountability. Continuation of such policies would be disastrous for American jobs and American workers.

 

As a strong supporter of American jobs and putting America first, we urge you to ensure that USAID and the USDA end their misguided attempts at turning P.L. 480 into a cash giveaway program that would kill American jobs and waste taxpayer money. We ask you to ensure that the use of American-grown in-kind commodity contributions remains fundamental to these programs and that the use of U.S.-Flag ships and American mariners will be prioritized by your Administration.

The Food for Peace, Food for Progress, and Food for Education programs are critical to the continued success of the United States Merchant Marine, and they promote domestic agriculture while serving as a diplomatic tool to express the generosity of the American people. The programs have worked, and will continue to work, so long as the federal government does not try to “reform” them in such a way that undermines their original intent.

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This post is excerpted from a letter dated January 31, 2017 from James L. Henry, President of the Transportation Institute and Chairman of USA Maritime, to President Donald Trump. Read the full letter here.

All images are courtesy of the U.S. Agency for for International Development.