End Cargo Preference Regulations
The Cargo Preference Act requires U.S. agencies to use U.S.-flagged carriers when transporting food for emergency and development purposes. However, this "buy American" provision is deceptive because foreign-owned businesses can easily flag their vessels as U.S. carriers and benefit themselves. In fact, an academic paper by Cornell's Chris Barrett looked at trends in 2005 and found that 68.6 percent of USAID food aid ...more »
The Cargo Preference Act requires U.S. agencies to use U.S.-flagged carriers when transporting food for emergency and development purposes. However, this "buy American" provision is deceptive because foreign-owned businesses can easily flag their vessels as U.S. carriers and benefit themselves. In fact, an academic paper by Cornell's Chris Barrett looked at trends in 2005 and found that 68.6 percent of USAID food aid shipments were carried by just four lines, three of which were foreign-owned.
This act was originally intended to support the U.S. merchant fleet, but the reality is that today the chief beneficiaries are foreign-owned businesses transporting food on ships that are too old to have any military use, and there is already a Maritime Security Program offering subsidies specifically for ships that do have military value. This act no longer does what it was intended to do, nor does it serve the beneficiaries it was intended to serve. What it does is erode the efficiency of government programs that save lives. Get the best bang for taxpayer dollars and eliminate cargo preference.
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