NEWS RELEASE: President Biden signs bill exempting Alaska from PVSA

The following was issued as a news release by the Grassroot Institute of Hawaii on May 25, 2021.

The Passenger Vessel Services Act cut off Alaska’s tourism industry from large foreign-flagged cruise ships departing from Washington

HONOLULU, May 25, 2021 >> In a huge victory for Alaska’s tourism industry — with ramifications for Hawaii as well — President Joe Biden signed into law yesterday a bill granting Alaska a temporary exemption from the Passenger Vessel Services Act.

The Alaska Tourism Restoration Act provides the Last Frontier temporary relief from the 135-year-old PVSA, which requires foreign-flagged vessels carrying passengers between U.S. ports to stop in a foreign port as part of the itinerary.

In the case of the Alaska tourism trade, that means ports in Canada, which has banned large cruise ships from docking at its ports through at least February 2022 because of fears about COVID-19.

As stated in yesterday’s White House announcement, the Alaska Tourism Restoration Act “temporarily allows foreign-flagged cruise ships to sail directly from Washington State to Alaska without having to dock in Canada first until either the date on which Canada lifts restrictions prohibiting cruise ships from docking in its waters due to the COVID-19 pandemic or March 31, 2022.”

Keli’i Akina, Grassroot Institute of Hawaii president and CEO, said, “The president’s exemption for Alaska is great news. Like the protectionist Jones Act, which applies to the transport of merchandise between U.S. ports, the PVSA has failed to support the U.S. maritime industry and has cost consumers in the process.”

Akina noted that the PVSA exemption for Alaska followed on the heels of Biden granting two Jones Act waivers earlier this month to help facilitate oil transport in the wake of the Colonial Pipeline shutdown.

He applauded Biden’s decision to grant both the Jones Act and PVSA exemptions, despite the president having positioned himself as a strong supporter of maritime protectionism both before and after his election as president.

Akina said he hopes the exemptions bode well for Hawaii, especially since the Aloha State could use relief from both of those laws as well.

“In the wake of our groundbreaking study that we issued last July, we know that the Jones Act costs Hawaii at least $1.2 billion a year, or about $1,800 per average Hawaii family,” Akina said. “And as the Grassroot Institute of Hawaii explained in its October 2020 report Cruising in Hawaii,’ the PVSA has limited Hawaii’s tourism potential, too.”

In early March, the institute teamed up with the Alaska Policy Forum to support an Alaska State Legislature resolution requesting a PVSA exemption.

“In the remote Hawaii market,” the institute said in written testimony, “the PVSA has discouraged cruise ship tourism by requiring foreign vessels to stop at foreign ports such as Ensenada, Mexico, or Fanning Island, Kiribati, 1,000 miles south of the Aloha State. The law is one reason cruise ship visitor arrivals to the islands are a fraction of those to Alaska.

“Now with Alaska feeling the brunt of the PVSA’s role in restraining economic growth, it is clear that this 135-year-old protectionist maritime law needs attention.”

In his article “Alaska cruising crisis shows need for flexibility in U.S. maritime law,” also published in early March, Grassroot Institute of Hawaii research associate Jonathan Helton wrote, “As a practical matter, the simplest option would be for the federal government to issue Alaska a PVSA waiver, thus allowing non-U.S. cruise ships to skip the stop in Canada.”

At the federal level, Alaska’s U.S. Sens. Lisa Murkowski and Dan Sullivan introduced the “Alaska Tourism Recovery Act” while U.S. Rep. Don Young, also of Alaska, introduced a companion measure in the House. The legislation sailed through both chambers with bipartisan support and was signed yesterday by the president.

With the PVSA exemption now a fait accompli, cruise lines are planning to resume sailings to Alaska. Already, Norwegian Cruise Line, Holland America, Celebrity Cruises and Carnival Cruise Line have announced plans to return to Alaska later this summer, bringing much needed revenue to the state’s suffering economy.

“The PVSA and Jones Act waivers show that maritime reform is possible,” Akina said. “We hope that bipartisan support can be marshaled to promote the interest of Hawaii, like it has for Alaska and fuel consumers caught short by the recent oil pipeline crisis.”

As Akina stated in his “President’s Corner” column last Friday, “If a shipping law that ostensibly protects ‘national security’ has to be waived every time there’s a crisis, maybe the problem is the law itself.”

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