Statement of Hon. Rory J. Respicio
Thirty-Second Guam Legislature
Good morning and thank you all for being here this morning for our public hearing on Resolution No. 138‐32 (COR) – “Relative to requesting the Honorable Madeleine Z. Bordallo, Guam’s Delegate to Congress, support modifications to the antiquated and restrictive “Merchant Marine Act of 1920,” more commonly known as the “Jones Act,” which continues to have an adverse effect on certain noncontiguous domestic jurisdictions of the United States, including Alaska, Hawaii, Puerto Rico, and the Territory of Guam.
Before we begin to hear testimony, I would like to provide a little background information on this resolution. As many of you know, the “Merchant Marine Act of 1920,” more commonly known as the “Jones Act,” requires that all goods shipped from the U.S. mainland to the non‐contiguous areas of the United States, including Guam, Alaska, Hawaii, and Puerto Rico, must be shipped on board U.S. flag carriers using U.S.‐made vessels; must be owned by U.S. companies; and must be operated by U.S. crews.
This law was enacted to protect American shipbuilding and seafaring interests. But the law was implemented nearly 100 years ago. And although the Jones Act does provide a significant degree of protection for U.S. shipyards, domestic carriers, and American merchant sailors, a recent U.S. International Trade Commission economic study found that repealing the Jones Act would have an annual positive effect on the overall U.S. economy of $656 million, and this and other studies make an economic case for exemption or modification of the Act.
And we all know that the Jones Act has led to an adverse impact on the cost of shipping goods to Guam. With the Jones Act in place, the problem is that American Samoa, the U.S. Virgin Islands and the CNMI all have exemptions and can use much less expensive foreign shipping to bring products to their islands. This means that the cost of goods transported by ship from the continental U.S. to Guam, Alaska, Hawaii, and Puerto Rico has a much higher delivery cost per mile than the same goods transported by ship from the continental U.S. to American Samoa, the U.S. Virgin Islands and the CNMI.
I found this to be unfair as the CNMI and Guam are in the same island chain and separated by less than 60 miles of ocean. Why should there be two very different shipping costs?
Although Guam does have an exemption from the Jones Act, it has never been utilized because Hawaii is on the same shipping route from the U.S. west coast that includes Guam.Jones Act ships MUST carry the cargo from the west coast to Hawaii, and since those
ships then sail to Guam, we’re stuck with the Jones Act.
There is a movement in Hawaii pursuing an option known as NTJAR.In 2010, the Hawaii Shippers Council put forward a legislative proposal to reform the Jones Act. The proposal is
known as the Noncontiguous Trades Jones Act Reform (NTJAR). The NTJAR Initiative would exempt just the Jones Act noncontiguous domestic trades ‐ Alaska, Guam, Hawaii and
Puerto Rico ‐ from the U.S.‐Build requirement.
For the reasons above, we are pursuing this resolution to ensure the fair and equitable treatment of the people of Guam and to assist with the high cost of living for our people. I believe that the continued imposition of the Act is unnecessarily restrictive and costly for Guam which has more of an impact here on island because of our small size, and great distance from other U.S. ports.
I am hoping that once this resolution is passed by my colleagues, it will encourage Congresswoman Madeleine Z. Bordallo to introduce and/or co‐sponsor legislation aimed at exempting Guam, Alaska, Hawaii, and Puerto Rico from the U.S. Build provision of the Jones Act or to propose legislation that would replace the Jones Act
without continuing to restrict the economic development of our island.