A proposed amendment by Sen. John McCain (R-AZ) to the Keystone XL pipeline bill poses a huge threat to Gulf Coast shipbuilding industry and the $15 billion economic punch the shipyards provide, the Shipbuilders Council of America and American Maritime Partnership say.
The amendment proposes to eliminate the existing requirement that vessels operating exclusively in America under the Jones Act be built in the United States, the organizations said in a press release Tuesday. McCain argues the 94-year-old law is out-dated and costly to Americans.
On the other hand, the Shipbuilders Council of America (SCA) and American Maritime Partnership (AMP) say the measure would gut America’s domestic shipbuilding industry, and “cost the nation more than a hundred thousand jobs.
Mississippi alone is home to 23,450 shipbuilding and ship repair jobs, according to a recent study by the U.S. Maritime Administration. The economic impact of the shipbuilding industry in Mississippi is more than $2 billion annually to its GDP (including $1.6 billion in wages), said Tom Allegretti, chairman of the American Maritime Partnership, an industry coalition.
The vote on the McCain amendment could come as early as this week.
“The McCain amendment would gut the nation’s shipbuilding capacity, outsource our U.S. Navy shipbuilding to foreign builders, and cost hundreds of thousands of family-wage jobs across this country,” Allegretti said.
“The shipbuilding requirement, which Sen. McCain seeks to eliminate, is in place to ensure that the United States maintains the industrial capacity to build its own ships, to protect and defend the American homeland. It is hard to believe that Congress would endorse a change to the law that would outsource U.S. jobs and reduce national security by effectively creating dependence on foreign countries to build our ships.”
McCain said in a press statement he has “long advocated for a full repeal of The Jones Act, a law he views as “antiquated” and a hindrance to free trade.
Over the years, the law has “made U.S. industry less competitive and raised prices for American consumers,” McCain said.
The senator states that the Congressional Research Service reported that it costs $6 per barrel to move crude from the Gulf Coast to the Northeast United States on a Jones Act tanker. “A foreign-flag tanker can take that same crude to a refinery in Canada for $2 per barrel – taking money directly out of the pockets of American consumers,” he said.
Frank Foti, chairman of the Shipbuilders Council of America, said the McCain amendment overlooks “the critical importance of maintaining our nation’s commercial shipbuilding industrial base.”
A robust domestic commercial industry helps support the supplier, construction, and repair capability that cannot be sustained solely by military work, Foti added. “The national security implications of outsourcing this capability would be staggering and cede America’s role as a stabilizing presence around the world.”
The United States Navy League said it fears the
the loss of the American-built provisions in the Jones Act “would have devastating ripple effects on all the sea services. Its immediate impact would be a reduction in the number of ships built in U.S. shipyards, which would result in a loss of jobs, a loss of industrial knowledge and skills, and a loss in America’s edge in shipbuilding quality and technology.”
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