COMMERCIAL-POLICY AND THE DOMESTIC CARRYING TRADE

In this paper we examine the economic consequences of existing U.S. re strictions on trade in domestic water transportation (cabotage) servic es. We briefly trace the history of U.S. policy on cabotage. We also u se an applied general equilibrium model of the United States to analys e the effects of the Jones Act on welfare and on production, trade, an d employment in important upstream and downstream sectors. The economi c 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 a gricultural import restraints.