How Grover Cleve­land ru­ined Amer­i­can cruises

Los Angeles Times - - OP-ED - By Vic­to­ria J. Buch­holz and Todd G. Buch­holz

These days, any­one can hop on a cruise from Mi­ami to Cuba. But if you try to board a ship from Mi­ami to Key West, New York or Charleston, Grover Cleve­land will stop you.

In 1886, Pres­i­dent Cleve­land tried to pro­tect Amer­i­can jobs by sign­ing the Pas­sen­ger Ves­sel Ser­vices Act, which per­mits only U.S. flagged ves­sels to carry trav­el­ers be­tween U.S. ports, such as San Diego and Seat­tle or New York and Mi­ami. How does a ship get a U.S. flag? To qual­ify, the ship must be made at a U.S. ship­build­ing fa­cil­ity, owned by an Amer­i­can com­pany and staffed by an Amer­i­can crew.

What Cleve­land and his Congress ob­vi­ously did not fore­see was that, by the late 20th cen­tury, nearly ev­ery cruise ship sail­ing in U.S. waters would be built abroad — from Princess’ Love Boats to Crys­tal’s lux­ury lin­ers to Dis­ney’s mag­i­cal float­ing king­doms.

Would you like to cruise the Hawai­ian Is­lands? You have two op­tions.

You can find a ship will­ing to make a de­tour to a for­eign port. Say, Ense­nada, Mex­ico (2,600 miles from Honolulu), Van­cou­ver, Canada (2,800 miles away), or Fan­ning Is­land (a re­mote 13-mile atoll be­long­ing to the Repub­lic of Kiri­bati that Gen. Dou­glas MacArthur prob­a­bly couldn’t find).

Or you can buy a ticket on the only pas­sen­ger ves­sel in the en­tire world that has per­mis­sion to sail be­tween U.S. ports. It’s called the Pride of Amer­ica, al­though the story be­hind that ship does not in­spire much pa­tri­otic feel­ing.

In 2001, pow­er­ful South­ern sen­a­tors ar­ranged for U.S. tax­pay­ers to sub­si­dize a ship­yard in Mis­sis­sippi so it could build a cruise ves­sel. It tried, and it failed. Within a year, a bun­gled, half-com­pleted hull was de­clared “un­float­able” and was towed across the At­lantic to be com­pleted in Ger­many for Nor­we­gian Cruise Lines. But to avoid em­bar­rass­ment to the U.S. gov­ern­ment, the ship is still billed as “Made in Amer­ica” and is free from the knot­ted moor­ing of the Pas­sen­ger Ves­sel Ser­vices Act.

With that one ex­cep­tion, for the last 50 years, Amer­i­can ship­builders have not riv­eted to­gether a sin­gle cruise ship that ful­fills the re­quire­ments set forth in 1886.

The PVSA con­jures true ab­dar­ing sur­di­ties. When a col­li­sion on the Mis­sis­sippi led the U.S. Coast Guard to close ac­cess to the river in Fe­bru­ary 2004, two Car­ni­val cruise ships that had left from New Or­leans were forced to di­vert to Gulf­port, Miss., and Mo­bile, Ala. The ships had noth­ing to do with the crash. Nonethe­less, U.S. Cus­toms and Bor­der Pro­tec­tion au­thor­i­ties fined the com­pany $2.8 mil­lion for to show up at the docks in Gulf­port and Mo­bile and thereby vi­o­lat­ing the PVSA. Al­though the fines were later over­turned, Car­ni­val would have saved it­self a lot of trou­ble by seek­ing asy­lum in Ha­vana.

Of­ten, to avoid fall­ing afoul of the PVSA or be­ing forced to travel in the wrong di­rec­tion to sat­isfy it, cruise ships sim­ply skip U.S. ports al­to­gether. Most cruises to Alaska de­part from Van­cou­ver, skip­ping Seat­tle. Many cruises to Hawaii de­part from Ense­nada, rather than San Diego.

So the PVSA doesn’t just crimp your travel plans. Con­trary to Cleve­land’s in­ten­tions, it costs U.S. jobs.

Without the PVSA, dozens more cruises would de­part daily from U.S. cities such as New York and Seat­tle, and the hun­dreds of mil­lions of dol­lars gen­er­ated from those voy­ages would stay within the U.S. econ­omy, pro­vid­ing thou­sands of port­side jobs — for long­shore­men load­ing cargo, bell­hops, tour guides, taxi driv­ers and lo­cal farm­ers sup­ply­ing fruits and veg­eta­bles for those all-you-can-eat buf­fets. And of course, each stop would gen­er­ate rev­enue for U.S. cities in port fees as well as lo­cal and state taxes.

Who does the PVSA pro­tect? Not Amer­i­cans. In­stead, Canada and Mex­ico should send thanks to that Congress of 1886, “attn. Grover Cleve­land.” The cruise docks of San Diego sit va­cant 90% of the year. Mean­while, 80 miles south, Ense­nada re­ceives more than three times as many pas­sen­gers as San Diego, and many more than New York, New Or­leans and Bos­ton. Van­cou­ver hosts three times as many sail­ings as Seat­tle. Since cruis­ing gen­er­ates an es­ti­mated $3.2 bil­lion for Canada’s ports, it’s no sur­prise that the Cana­dian gov­ern­ment lob­bies to pre­serve the PVSA.

We now have a pres­i­dent who says he wants to put Amer­ica first. One easy way for Pres­i­dent Trump to make good on that pledge is to re­peal the Pas­sen­ger Ves­sel Ser­vices Act, which helps no pas­sen­gers, pro­vides no valu­able ser­vices and acts to kill job op­por­tu­ni­ties — from sea to shin­ing sea.

Vic­to­ria J. Buch­holz isa cor­po­rate and in­tel­lec­tual prop­erty at­tor­ney in Los An­ge­les.

Todd G. Buch­holz is a for­mer White House di­rec­tor of eco­nomic pol­icy and the au­thor of “The Price of Pros­per­ity: Why Rich Nations Fail and How to Re­new Them.”

Zina Saun­ders For The Times

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