29 January 2012

Guam seeks release from onerous application of U.S. regulations


Gov. Calvo wants competition to reduce costs for residents

By Gaynor Dumat-ol Daleno
Pacific Daily News

HAGATNA, Guam – With the goal of trying to keep the cost of consumer goods on Guam more affordable, and for island residents to have more options for air travel, the governor yesterday said he gave his economic advisers a crucial task.

Gov. Eddie Calvo's Council of Economic Advisers must review how to approach the possibility of seeking exemptions from federal laws regulating ocean shipping and air transportation.

The governor mentioned the U.S. cabotage law for air transportation and the Jones Act as it applies to ocean transport. Foreign airlines are forbidden from transporting passengers and cargo between U.S. ports under U.S. cabotage law, unless the Transportation Department gives specific exemption.

Guam sought an exemption from cabotage law in 2006, to expand Guam residents' options for air travel, but certain U.S. airlines and their workers' unions protested the move. Under the Jones Act, all sea shipping between U.S. domestic ports must be handled by U.S.-flagged vessels.

Two recent developments prompted the governor to give his economic advisers the task of reviewing what steps, if any, to take. One reason was the merger of Continental Airlines with United Airlines -- creating the largest airline in the world, said the governor.

The second development was Horizon Lines' financial troubles, which led to its pullout from the Guam market, leaving Matson the only U.S.-flagged ocean carrier to serve Guam, Calvo said.

Calvo said he has nothing against United or Matson, in fact they're valued contributors to the island economy. But the bottom line, the governor said, is he wants the cost of living on Guam to improve and residents' options for air travel and shipping goods to broaden.

Allowing more airlines and more ocean carriers access to the Guam market will promote competition that will benefit island residents and Guam businesses, he said. "Because of the two major events that just occurred, because Guam is a U.S. territory thousands of miles from the U.S. West Coast, I believe it is important to look into the issue of cabotage and the Jones Act," Calvo said in an interview.

"The reason I requested my council of economic advisers to look into this is because of recent events on Guam, how impactful those events are to the quality of life of our residents and our economy," the governor said.

The council includes Henry Taitano, the governor's special assistant on social and economic affairs. Banker Phil Flores, economist Joseph Bradley and Alfred Lam are part of the council also, according to the Governor's Office.