Economic Consequences of Cabotage Restrictions The Effect of the Jones Act on Puerto Rico
This paper studies the consequences of a U.S. cabotage law for Puerto Rico (PR). Data on ship arrivals in PR show that the fleet of U.S. vessels that call there lacks capacity for carrying non-containerized freight. Empirical estimation using trade data shows that PR's imports of sea-shipped fi...
| Main Author: | |
|---|---|
| Other Authors: | |
| Format: | eBook |
| Language: | English |
| Published: |
Washington, D.C
The World Bank
2024
|
| Subjects: | |
| Online Access: | |
| Collection: | World Bank E-Library Archive - Collection details see MPG.ReNa |
| Summary: | This paper studies the consequences of a U.S. cabotage law for Puerto Rico (PR). Data on ship arrivals in PR show that the fleet of U.S. vessels that call there lacks capacity for carrying non-containerized freight. Empirical estimation using trade data shows that PR's imports of sea-shipped final products are biased against U.S. mainland sources. This bias is strongest for heavy products and products not typically shipped in containers. Among upstream products, a strong bias against imports of sea-shipped products applies to all sources. Estimated tariff-equivalent costs among final products imply static annual welfare losses of 1.1 percent of household consumption (USD 203 per person). The same tariff-equivalent cost estimates imply that the law raises the cost of investment in PR by 3.0 percent. The observed bias against sea-shipped inputs in PR's imports may result from long-run industry location decisions that have been influenced by the law's presence |
|---|---|
| Physical Description: | 62 pages |