Thursday, 29 August 2013

Free trade rethink on the Jones act

America has taken it upon themselves to bring freedom and democracy to other countries including the third world. However here in America free trade is still quite restrictive despite our effort's for free trade in other countries. Don't believe me? Well the Jones act set up in 1922 mandates the following: that boats that are only built and with the American flag flying are allowed to transport goods between American ports. Despite this act being 91 years old back when globalization was in its earlier days has meant that America is suffering many negative consequences because of this old act. The act has meant American built ships cost significantly more than other foreign ships to be built due to low competition in the ship building industry (Some foreign vessels of the same type made in other countries can cost 5 times less!).

The Jones act doesn't just effect the shipbuilding industry the act also thwarts other industries including one of the biggest! The oil industry cannot work as effectively as it could with the Jones act in place... Inefficiencies in transportation of oil has meant that oil companies are loosing huge sums of money because of a act made 90 years ago when technology was much less advance.
Reports have estimated that the Jones act actually increases the price of transporting a single barrel of oil by $6 to $8.

There are people who support the Jones act have spoken out syaing that the Jones act is still relevant in today's world as it secures the shores of america and secures jobs for americans.

But those who oppose the Jones act say that America cannot afford these extra costs and the wasted time the Jones act creates and it doesn't secure jobs only makes America less competitive in the globalizing world.

As oil prices rise their is no doubt that the government will have to rethink the Jones act whether people like it or not.


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