Washington - The federal government has put a hold on a new exemption from the federal cabotage regulations for Puerto Rico, despite the Island's emergency and the revival of the debate on that statute.

However, food importers consider that the federal government should establish at least a one-year waiver, in order to know on the go the impact of these restrictions on the transportation of products from the USA towards the Island.

"If we are in a moment of emergency, the exemption should be in effect during the emergency period," indicated Jose Gonzalez Freyre, president of the Pan American Grain company.

Although the Puerto Rican government said last week that the 10-day exemption granted by President Donald Trump's government was not used by anyone to bring goods from US ports to Puerto Rico, Gonzalez Freyre announced that his company has an Italian-made barge in transit that left last Wednesday from New Orleans (Luisana), and arrives on Tuesday in San Juan.

The Jones Act of 1920 -which includes cabotage regulations-, requires that the transportation of goods between ports of the United States and Puerto Rico be made on US owned, flag and crew ships, which are the most expensive in the world.

The Italian barge hired by Pan American Grain brought rice and raw material to elaborate animal food.

The little use of the exemption, according to importers, is a reflection of the short time granted by the federal government.

"From the beginning, we said that thinking that 10 days were enough was absurd. A commercial ship requires much more than 10 days to be loaded," affirmed Manuel Reyes, executive vice president of the Puerto Rico Chamber of Marketing, Industry and Distribution of Food (MIDA, Spanish acronym).

Reyes stated that unless it is a gigantic company like oil companies, it is very difficult to coordinate and load in a little more than a week hundreds of vans into a barge. This time limit, according to González Freyre, prevented him from being able to negotiate the cost of transporting his products.

Amid the pressure generated by the catastrophe caused by Hurricane Maria in the US media, on September 28, President Trump approved a 10-day exemption for Puerto Rico on federal cabotage rules.

Then, the White House assured that -contrary to the usual- it approved the waiver at the request of Governor Ricardo Rosselló. "We thank President Donald Trump for allowing Puerto Rico to receive goods and supplies no matter where they come from. This will allow the recovery of the Island to be more agile and efficient, without having to go through the usual bureaucratic procedures to receive basic necessities," pointed out at that time Governor Rosselló.

Rosselló does not ask for an extension

After the 10-day dispensation expired, the Department of Homeland Securityreported that the Puerto Rican government had not requested an extension, although Governor Rosselló reaffirmed a few days ago that he was still interested in having all the possible tools in hand.

According to the Department of Homeland Security, which controls waivers, cabotage exemptions are based on US "national defense" issues and are usually granted at the request of the Pentagon and the shipping industry. But after Hurricane Maria, they said they heard the governor's claim, which had been preceded by that of the Puerto Rican Democratic Congress members José Serrano, Luis Gutiérrez, Nydia Velázquez and Darren Soto, among others.

Prior to granting the 10-day waiver to Puerto Rico, President Trump acknowledged that "many people in the maritime industry do not want the Jones Act to be removed."

Officially, for the federal government, the exclusive use of US flag and crew ships between its ports is a matter of national security and defense.

For the Island’s authorities and the private industry, it is a cost issue, a matter that the federal statute does not take into consideration.

Increase of the cost of products

A study done last four-year period by Senator Rossana López León of the Popular Democratic Party (PDP) revealed that a family of four in Puerto Rico pays $ 500 more in products annually than they would if there were no limitations to the cabotage rules.

As soon as the 10-day exemption expired, Republican Senator John McCain (Arizona) insisted that it is time to pass his bill that pushes Puerto Rico permanently out of cabotage rules.

"Until we provide Puerto Rico with long-term relief, the Jones Act will continue to hamper much-needed efforts to help the people of Puerto Rico recover and rebuild (after) Hurricane Maria," pointed out McCain.

Senate leadership does not have McCain's measure on its legislative agenda.

And in the lower House the issue has not been on the agenda, even though many Democrats have included the issue among the demands they publicly make to Trump´S government.

For years, shipping companies and the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) union has defended cabotage restrictions. "The rest of the unions do not share that position," said Héctor Figueroa, vice president of the Service Employees International Union (SEIU) and president of the union 32BJ.

The AFL-CIO, however, has stated that it "has never opposed a waiver of the Jones Act during an emergency, when there have not been enough boats or crew to do the work."

Trump´s government, when it let the temporary exemption expire, affirmed there were enough US vessels to transport goods from the United States to Puerto Rico.

"Before we move to push a legislation, we have to see what the reality is, how much they (the rules) help us or not. I think that the main problem that Puerto Rico faces now is not that the barges are not arriving, but that we do not have the hands and the trucks to get them out of there. The docks are still full," said Resident Commissioner in Washington Jenniffer Gonzalez, who has preferred a waiver on air freight and in the marine sector only for energy related products.

Although a study by the General Accounting Office (GAO) requested by former commissioner Pedro Pierluisi favored the permanence of the so-called cabotage laws, Resident Commissioner Gonzalez believes that, following the new debate, "there will be another investigation in due course."

Gonzalez Freyre stated that "a lot of cargoes remained in ports in Jacksonville".

Republican Sean Duffy (Wisconsin) expressed that he was one of those who intended to get an exemption on cabotage rules, during the PROMESA law debate.

"Republican and Democratic opposition was strong. I think they see it as damage to the US shipping industry, the ability to manufacture and sell boats under the American flag. Those issues are not going to vanish. I said we should do it for Puerto Rico and some see that as breaking the support unification about the Jones Act," Duffy said.

On the Democratic side, number two of the minority, Steny Hoyer (Maryland), close to the unions, assured he favors using US ships, "spending the taxpayers’ dollars."

According to Congressman Hoyer, the intention is to "encourage a Merchant Marine that is good for national security and the ability to have ships available for use in circumstances (such as the emergency in Puerto Rico)."

But the executive vice president of MIDA does not believe that it is reason enough, since US shipping companies have international flag ships that they use to transport products to other countries.

"Much of this debate," said Reyes, "starts as an antagonistic relationship with the shipping companies that serve us now, and it does not have to be that way."

💬See 0 comments