ANALYSIS: TRUE. Keeping up with the Jones Act is killing U.S. shipbuilding.
Fishermen’s Finest, an American fishing company headquartered in Washington state, commissioned the America’s Finest for $75 million from Dakota Creek Industries, a shipyard in Anacortes, Washington. Unfortunately, the process of building the vessel ran afoul of regulations under the Jones Act, which requires that ships that ply U.S. waters be built with no more than 1.5 percent foreign steel. America’s Finest contains 7 percent steel that was cold-formed in the Netherlands, a process that the Coast Guard currently interprets as “fabrication.” Thus, America’s Finest is legally unable to fish in American waters.
Fishermen’s Finest appealed to the Coast Guard for a waiver, but it chose a bad time to do so. Fishermen’s Finest intended to consolidate two other fishing permits into a permit for America’s Finest, retiring the two ships currently using those permits in the process. Those ships would be turned into “motherships,” ships which sit offshore and process fishing deliveries from fishing vessels.
The town of Unalaska currently processes the majority of fishing deliveries in the Bering Sea region, and would stand to lose if Fishermen’s Finest set up motherships in the region. Unalaska, a town with tax revenues just over $18 million in FY 2018, generated over $1 million in taxes on cod deliveries last year. Not wanting to lose out on that tax revenue, Unalaska’s mayor, Frank Kelty, has been active in petitioning first the Coast Guard then Congress not to grant Fishermen’s Finest a Jones Act waiver.
Because of this political pressure, Fishermen’s Finest failed to get a Jones Act waiver and will be forced to sell the vessel at a discount overseas. That means that the fishing jobs that Fishermen’s Finest would have provided are being, literally, shipped overseas. Meanwhile, Dakota Creek, the shipyard that built the vessel, has already laid off half its staff due to Fishermen’s Finest’s inability to receive a waiver, and its future is “uncertain.”
The irony here is that one of the most common arguments made in defense of the Jones Act is that it supposedly protects the jobs of shipyard workers.
Our competitors probably can’t believe their good luck, that American politicians are so economically illiterate, pandering, or both.