15 Grain producers and their customers are not the only ones hurt by the Jones

15 grain producers and their customers are not the

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15 Grain producers and their customers are not the only ones hurt by the Jones Act. The steel, petroleum, and chemicals industries, to name a few, also oppose the current restric- tions on shipping because the restrictions raise prices on their products. Oil shipments from Alaska to the lower 48 states account for a large amount of the Jones Act shipping and keep gasoline prices higher than they oth- erwise would be. In some cases, the act reduces exports by raising the cost of conveying products, such as coal and clay, to coastal ports for export. Residents of Alaska and Hawaii suffer dispro- portionately from the Jones Act. Overall, by eliminating the Act the United States would reap benefits of $3.1 billion a year, according to the U.S. International Trade Commission. That is the net benefit, taking account of the adverse impact on privileged shipping inter- ests that now benefit from the Jones Act. The direct savings to consumers would be far higher. The price of shipping services now restricted by the law would decline by an esti- mated one-quarter. 17 But because the Jones Act requires that American sailors be em- ployed for domestic maritime shipping, the law has significant support from organized labor. Even American yacht owners are affected by related cabotage laws. Yachts cannot be chartered in the United States unless they are American-made and manned by American crews. And while the Jones Act does not cover cruise ships, its sister law, the Passenger Vessel Act, does. That law prevents nearly all of the world's major cruise lines from setting sail from an American port. In 1993, Vancou- ver, British Columbia, had close to 260,000 embarkations, compared with nearby Seattle, which—because of the restrictions—had only 8,7OO. 18 Antidumping Laws "Antidumping laws as they are written and implemented are protectionist and anti- consumer," notes Consumers for World Trade, a Washington, D.C.-based public inter- est group. 19 Antidumping laws are meant to exclude from the American market foreign products priced below the cost of produc- tion. That practice is labeled by American policy as "unfair." The rationale behind antidumping laws is that they protect domestic producers. Theoretically, in the long run, they protect consumers by preventing a foreign company from driving American firms out of the mar- ket and establishing a monopoly. In fact, those laws protect domestic producers from competition, and consumers face higher prices and fewer choices of products. It is difficult to construct a scenario where- by a producer could drive out all competition 52
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through low pricing, especially in today's integrated global economy. Meanwhile, con- sumers would benefit from the lower prices of "dumped" goods. In any case, antidumping laws are not based on sound economic assumptions. First, pricing below the cost of production often is necessary for an enterprise to limit losses when the price of a product falls. For exam- ple, in the 1980s American trade officials accused Japan of dumping computer memory chips on American and other markets. But
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