A New Attack On The Obsolete Jones Act

BRINGING up to Jones Act in maritime circles is akin to discussing religion or politics at the family dinner table. Conflict is inevitable.

But Northwest lumber interests are beginning to ignore that taboo and challenge this law that costs the region $200 million annually.

The Jones Act is engraved in gold to American shipbuilders and seamen's unions. It states that only American-built, American-owned, and American-staffed ships can carry cargo between U.S. ports.

The intent was to protect jobs for American ship workers. The problem is, there are no American-made vessels left to carry wood products. Our shipyards lost that business long ago to Japan and Korea.

As a result, Northwest lumbermen cannot export to the East Coast because the Jones Act forbids them from using the same foreign ships they employ for exports to Asia.

British Columbia timber companies face no such constraint. Southern timber companies also benefit because they can easily supply those markets by rail. Only the Pacific Northwest loses - 6,000 jobs, according to the Northwest Independent Forest Manufacturers Association in Tacoma.

To correct that, the association supports legislation by Rep. Ron Wyden, D-Ore., to exempt finished wood products from the Jones Act. The reform is crucial to help contain marketing costs that will rise as the spotted-owl logging bans take effect.

Northwest lumber people have never seriously challenged the Jones Act before. American shipbuilders, seamen's unions, and Eastern timber lobbies have always squashed debate.

``It's an icon that nobody bleeps with,'' explains the staff director of a congressional committee with oversight over the Jones Act. ``Reagan never criticized it - even David Stockman didn't touch it.''

The Bush administration has not acted because the Jones Act subsidizes merchant-marine construction, albeit at the cost of Northwest trade. The maritime lobby argues those extra ships are essential in the event of a future World War II-style sealift.

But the peace that is rendering the North Atlantic Treaty Organization obsolete is badly eroding this Jones Act argument.

``The decline in the Cold War strips away whatever military value the Jones Act ever had,'' says Prof. Allen R. Ferguson, a Washington, D.C., industrial economist who has written a book on merchant-marine economics.

Jones Act supporters may be reduced to explaining why only American-flagged vessels should deliver orange juice and poultry - even though consumers pay more for it.

European Common Market nations may also enter the fray. Western European carriers have long chafed at being locked out of the American domestic market. Some are seeking to influence that by lobbying for their own Jones Act to ban U.S. ships and airlines from internal European markets. While some European special interests support this, their serious economists do not.

``It's a stupid idea,'' says Sir Alan Walters, former chief economic adviser to British Prime Minister Margaret Thatcher. ``It's damaging to the European economy, just as the Jones Act has damaged the U.S. economy. The Jones Act has kept your freight rates high, and injured industry and consumers alike.''

The Philippines, Panama, and other shipping powers are also seeking to break down the Jones Act during the current General Agreement on Tariffs and Trade negotiations in Brussels. Delegates might label the Jones Act a discriminatory trade practice.

As the maritime lobby faces new threats, it is losing old allies. Rail interests have always supported the Jones Act, believing anything that raises water-shipping costs makes railroads more competitive. But Representative Wyden has persuaded several rail companies to stay neutral in the fight.

The knot between Republican presidents and maritime unions is also unraveling. Maritime unions were virtually the only unions to endorse Reagan, and they did so in return for his support for the Jones Act, according to the conservative Heritage Foundation.

A belligerent Warsaw Pact enabled Reagan and Bush to cite defense readiness. But as the Soviets take away that political cover, the Bush administration may find little common cause with maritime workers.

For now, the industry and seamen's unions still call the tune. They have stymied Wyden's bill in the House Merchant Maritime and Fisheries Committee, where Reps. John Miller, R-Wash., and Jolene Unsoeld, D-Wash., now serve. Neither Washington lawmaker has endorsed the bill.

But lumber interests are undeterred. As Wyden aide Steve Jenning puts it, ``A lot of people are privately supporting us.''

Mark Kirchmeier is an Oregon free-lance writer.