Last week something increasingly unusual happened in Washington: a member of the U.S. Congress delivered a blistering verbal broadside against a protectionist law. The politician was Sen. Mike Lee (R‐Utah) and the target of his richly deserved ire was the Passenger Vessel Services Act (PVSA). Passed in 1886, the PVSA restricts the waterborne transportation of passengers between two U.S. ports to those vessels that are U.S.-flagged, U.S.-built, and mostly U.S.-crewed and owned.
While Lee’s remarks are worth watching in their entirety, a few of his comments merit particular attention. One excellent point raised is that the law’s U.S.-built requirement for large cruise ships is doing little to benefit U.S. shipyards:
The United States has not built a single, large cruise ship in over 60 years. Not one. Not a single one. With respect to large passenger vessels, this law is literally protecting no one…With respect to the PVSA, we’re not protecting anything because we do not make large passenger vessels in this country and haven’t for half a century.
As Sen. Lee notes, the construction of large passenger ships does not take place in the United States, with no such vessel built since 1958. As it pertains to large cruise ships, the PVSA’s mandated use of U.S.-built vessels is protectionism for a type of shipbuilding that does not exist.
With regard to the operation of large passenger ships, meanwhile, there is just a single such vessel deemed compliant with the PVSA’s strictures. That ship, the Hawaii‐based Pride of America, was actually completed in a German shipyard and is only able to operate under the PVSA thanks to a special exemption granted by Congress after a strong lobbying effort.
Sen. Lee also made an excellent observation about the PVSA’s beneficiaries:
Make no mistake, the PVSA is not America First. This is the encapsulation of Special Interests First. Or even, you might say, Canada First. Perhaps this is the reason the Canadian government lobbies Congress to keep the PVSA in place. Think about that for a minute. Madam President, this unfortunate situation has been exacerbated by the pandemic, during which Canada has closed its ports to cruise ships, making it effectively impossible for Alaskan cruises to carry on. But the only reason why Canada wields this tremendous authority over us is because of our own law—our own law that they’re lobbying us to keep in place because they benefit from it.
It is both accurate and instructive that some of the biggest supporters of this protectionist law are found abroad. To avoid violating the PVSA, ships that do not meet its requirements must visit a foreign port at some point during their voyage. For cruises to Alaska, that means a stop in Canada. As Sen. Lee states, Canada’s government lobbies for the retention of this law because it diverts cruise ships—and tourism dollars—to the country. And now that Canada’s ports are off‐limits to cruise ships through February 2022—making visits to Alaska by such vessels an impossibility—some Canadians are alarmed that Americans may begin to rethink the PVSA’s wisdom.
Kudos to Sen. Lee for highlighting the costs and absurdities of this outdated law. The PVSA, as it applies to large cruise ships, is protectionism for a nearly non‐existent industry that primarily benefits foreign interests who reap a bounty from the forced diversion of ships to their ports. As such, it should be regarded as ripe for significant reform if not outright repeal.