Another angle on the Dubai deal: the Jones Act

I haven't yet heard the Jones Act of 1920 mentioned in discussions of the UAE company seeking to buy U.S. ports, but perhaps it is relevant. The Jones Act forbids any ship other than U.S.-owned, U.S.-built, U.S.-flagged, and predominantly U.S.-crewed ships from carrying cargo from one U.S. port to another. (That's a lot of U.S.) For "national security" reasons among others - mostly trade protectionist, I would suggest.

The Jones Act is relevant here because those opposed to the administration-supported deal could cite the act as precedent that indicates the national security value of U.S. ports. Of course the administration realizes ports are valuable to security. However, this act as stare decisis could beef up the case that everything relating to ports needs to be "Made in the U.S.A." (Except the cargo from foreign countries, 95 percent of which is uninspected. But that's another subject...)

Of course, the counterpoint is that this legislation was passed in the pre-free trade, pre-globalization era. At the time of the Jones Act, foreign ownership wasn't as common as it is now: the Japanese hadn't yet bought Pebble Beach golf course, Honda didn't yet have a North American Headquarters in Kentucky, and Rupert Murdoch hadn't yet purchased Myspace.com.

A brief note on who gets the credit for mentioning the Jones Act: Daniel Yergin brings it up in his article, "Ensuring Energy Security," in the current (March/April 2006) issue of Foreign Affairs. (The issue is not yet online.) He cites the temporary American suspension of the Jones Act regulations in the wake of Hurricanes Katrina and Rita, to ameliorate the problem of getting oil to U.S. cities when they badly needed it. Yergin did not mention the Dubai deal, of course.