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Commercial Policy and the Domestic Carrying Trade


  • Joseph Francois
  • Hugh M. Arce
  • Kenneth A. Reinert
  • Joseph E. Flynn


In this paper, the authors examine the economic consequences of existing U.S. restrictions on trade in domestic water transportation (cabotage) services. They briefly trace the history of U.S. policy on cabotage. The authors also use an applied general equilibrium model of the United States to analyze the effects of the Jones Act on welfare and on production, trade, and employment in important upstream and downstream sectors. The economic effects of U.S. maritime policies rank them with U.S. trade policies like the MFA, the automobile and steel quotas of the mid-1980s, and agricultural import restraints. Coauthors are Hugh M. Arce, Kenneth A. Reinert, and Joseph E. Flynn.

Suggested Citation

  • Joseph Francois & Hugh M. Arce & Kenneth A. Reinert & Joseph E. Flynn, 1996. "Commercial Policy and the Domestic Carrying Trade," Canadian Journal of Economics, Canadian Economics Association, vol. 29(1), pages 181-198, February.
  • Handle: RePEc:cje:issued:v:29:y:1996:i:1:p:181-98

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    Cited by:

    1. Olney, William W., 2020. "Cabotage sabotage? The curious case of the Jones Act," Journal of International Economics, Elsevier, vol. 127(C).
    2. John Whalley, 2004. "Assessing the Benefits to Developing Countries of Liberalisation in Services Trade," The World Economy, Wiley Blackwell, vol. 27(8), pages 1223-1253, August.
    3. Joseph Francois & Miriam Manchin & Patrick Tomberger, 2015. "Services Linkages and the Value Added Content of Trade," The World Economy, Wiley Blackwell, vol. 38(11), pages 1631-1649, November.
    4. Andriamananjara, Soamiely, 2004. "Trade and International Transport Services: an Analytical Framework," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 19, pages 604-625.
    5. Christen, Elisabeth & Francois, Joseph & Hoekman, Bernard, 2012. "CGE modeling of market access in services," Policy Research Working Paper Series 6106, The World Bank.
    6. Jeffrey Pagel & Ike Brannon & Russ Kashian, 2019. "Jones Act: protectionist policy in the twenty-first century," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 21(4), pages 439-463, December.
    7. Lewis, Justin, 2013. "Veiled Waters: Examining the Jones Act's Consumer Welfare Effect," MPRA Paper 51469, University Library of Munich, Germany.
    8. Carsten Fink & Aaditya Mattoo & Ileana Cristina Neagu, 2002. "Trade in International Maritime Services: How Much Does Policy Matter?," World Bank Economic Review, World Bank Group, vol. 16(1), pages 81-108, June.
    9. Christen, Elisabeth & Francois, Joseph & Hoekman, Bernard, 2013. "Computable General Equilibrium Modeling of Market Access in Services," Handbook of Computable General Equilibrium Modeling, in: Peter B. Dixon & Dale Jorgenson (ed.),Handbook of Computable General Equilibrium Modeling, edition 1, volume 1, chapter 0, pages 1601-1643, Elsevier.
    10. Zheng, Jianfeng & Meng, Qiang & Sun, Zhuo, 2014. "Impact analysis of maritime cabotage legislations on liner hub-and-spoke shipping network design," European Journal of Operational Research, Elsevier, vol. 234(3), pages 874-884.
    11. Bernard Hoekman & Carlos Braga, 1997. "Protection and Trade in Services: A Survey," Open Economies Review, Springer, vol. 8(3), pages 285-308, July.
    12. Mak, James & Sheehey, Christopher & Toriki, Shannon, 2010. "The passenger vessel services act and America's cruise tourism industry," Research in Transportation Economics, Elsevier, vol. 26(1), pages 18-26.
    13. Aaditya Mattoo, 2003. "Shaping Future Rules for Trade in Services: Lessons from the GATS," NBER Chapters, in: Trade in Services in the Asia Pacific Region, pages 47-78, National Bureau of Economic Research, Inc.
    14. Gallaway, Michael P. & Blonigen, Bruce A. & Flynn, Joseph E., 1999. "Welfare costs of the U.S. antidumping and countervailing duty laws," Journal of International Economics, Elsevier, vol. 49(2), pages 211-244, December.

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