A Cruise From Seattle to Alaska via Congress

Thinking you might hop on a ship in Seattle for a summer cruise to Alaska? Think again.

Under a 111-year-old law, passengers must fly to Seattle, take a bus to Vancouver, Canada, and then get on the boat. Under that same law, a cruise to Hawaii requires a jog to Ensenada, Mexico.

The Passenger Vessel Services Act (PSA), enacted in 1886 to protect Great Lakes ferries from Canadian competition, won't allow foreign-made or foreign-operated vessels to carry passengers between United States ports.

This law, however, is safeguarding an industry that almost no longer exists. Only one American-flag cruise ship still operates in US waters, traveling among the Hawaiian Islands. The large cruise-ship business that has exploded in recent years is almost entirely foreign-operated.

Worldwide, the cruise industry has been booming, growing by 50 percent in the past five years, with 85 percent of the passengers from North America. New entrants, such as Disney, are building cruise ships, eager to exploit a new arena for the entertainment business. Ports and tourist-promotion authorities see US cruises as a potential market, particularly for three- to five-day trips.

"We are missing out on a lot of tourist revenue for the state of California," says John Koeberer of the California Tourism Commission. "We have wonderful ports of call that are not being used at all.... Millions of dollars and many, many jobs are being left on the table because of this ancient act."

A coalition led by ports, travel agents, and tourist-promotion organizations is pushing for amending the PSA to allow foreign cruise ships to navigate more freely in US waters. A bill by Sens. Strom Thurmond (R) of South Carolina and Frank Murkowski (R) of Alaska is set to be introduced this week.

But the bill is not expected to move smoothly through Congress. Unions representing American maritime workers, shipping companies, and shipbuilders have allied to oppose any changes. US shipbuilders, they say, cannot compete with their European and Asian counterparts, which get government subsidies, and foreign cruise operators do not have to pay either US corporate taxes or American-scale wages.

"We oppose any attempt to dilute this legislation," says Bruce Vail of the Marine Engineers Beneficial Association, which represents ship officers. "By allowing foreign flags of convenience into this trade, it would foreclose forever opening it for American ships and American seafarers."

Amending the PSA could also impede the growth of riverboat gambling. Since the US opened the domestic cruise industry to gambling five years ago, larger boats are now being built for Mississippi gambling cruises.

"Our industry is getting much closer to being able to do this, and this bill will kill that," says a spokesman for the industry-backed Transportation Institute.

Free-marketers suggest the real basis for opposition is fear that the bill will lead to changes in the Jones Act, a separate law that protects America's cargo-shipping industry. "These people think this is the camel's nose under the tent," says Tom Garrett, director of the Alaska Division of Tourism.

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