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/ Wednesday, May 15, 2019
sponsored by U.S.] and neighboring islands of Puerto Rico, such as the U.S. Virgin Islands, Haiti, and the Dominican Republic,” stated the study by Reeves & Associates and Estudios Técnicos. Meanwhile, two 2019 studies commissioned by the Chamber of Food Marketing, Industry & Distribution argued otherwise. “The price of shipping cargo to Puerto Rico is $568.9 million higher, and prices are $1.1 billion higher than they would be without the Jones Act limitations. This is equal to nearly $375 per resident,” said a study by John Dunham & Associates. “If this is the case, Puerto Rico has 13,250 fewer jobs than it would have were there a free market for ocean freight. These jobs would pay residents $337.3 million more in wages, and would result in over $1.5 billion in increased economic activity. Overall tax revenues would be $106.4 million higher were the island be exempted from the Jones Act’s provisions,” said the report. Another study by Advantage Business Consulting focused on the food industry and concluded that the Jones Act amounts to a 7.2 percent tax on food and beverages alone, which totals $367 million that local residents must pay. Based on this calculation, families in Puerto Rico pay $300 more a year for food and beverages because of the cabotage law. During a recent forum on the Jones Act at the Cato Institute, some people in the audience questioned the reliability of a recent study on the impact of the Jones Act on Puerto Rico. According to an unidentified man, a study by New York-based John Dunham & Associates greatly miscalculated the nautical miles between several international ports and San Juan, resulting in flawed data. “The distance between Busan [in South Korea] to San Juan is about 9,100 nautical miles, not the 15,000 [stated] in the study,” the audience member said, adding that the Dunham study was not reliable. After several minutes of back-and-forth exchanges between Dunham and the unidentified man, Dunham replied tersely, “well, you can do your own study.” Economist Anne Krueger called for the “outdated” Jones Act to be repealed, saying it
had long outlived its usefulness. “The Jones Act has been detrimental to Puerto Rico, Hawaii and Alaska,” she said, noting that studies show it costs three times as much to operate Jones Act ships than their international counterparts and that it costs six times as much to build a ship in the mainland U.S. than internationally. “The Jones Act 100-year anniversary is coming up. This would be a great time to repeal the law,” she added.
7.2 PERCENT TAX $300 more On food and beverages alone
Families in Puerto Rico pay a year for food and beverages because of the cabotage law Source: Advantage Business Consulting
vs.
The Jones Act has a 0% IMPACT on consumers Retail prices are the same locally as in mainland U.S. Source: Reeves & Associates and Estudos Técnicos
Impact of the U.S. Jones Act on Puerto Rican Families