United States Coastwise Trading Restrictions: A Comparison of Recent Customs Service Rulings with the Legislative Purpose of the Jones Act and the Demands of a Global Economy

McGeorge, Robert L. | January 1, 1990

Fierce policy disputes are inevitable whenever two basic, widely-accepted principles intersect in a situation where one must prevail and the other give way. In the maritime field, these disputes occur whenever a nation-state is forced to choose between promoting free and open trade in maritime services or protecting its domestic merchant marine. The clash of these policies has generated vigorous debates in the United States on a wide variety of maritime issues (e.g., cargo preference requirements, operating and construction differential subsidies, vessel construction loan guarantee programs and whether to retaliate against foreign countries’ attempts to reserve import and export trades for their merchant marines). In one area, however, the advocates of a strong domestic merchant marine have routed the forces of free trade by reserving domestic maritime trades for national maritime fleets. The right of a nation to exclude foreign vessels from its domestic maritime trades is accepted without question in the international community; and most coastal nations, including the United States, have adopted cabotage laws to enforce that right.’ The United States’ maritime cabotage laws are contained in Section 27 of the Merchant Marine Act of 19202 – commonly referred to as the Jones Act. This article will challenge neither the United States’ legal right to adopt cabotage laws, nor the Congressional choice to protect the United States merchant marine through the enactment of the Jones Act. Instead, this article analyzes recent Jones Act rulings, opinions and decisions on the so-called “continuity of the voyage” issue (Le., whether the Act applies to the transportation of cargoes between two United States points if they are manufactured or processed at a foreign intermediate point).