An indirect route

Under federal law, ships carrying products or passengers between American ports must be built in America, owned by an American company and manned by American crews. So when a new cruise ship named the Pride of America sails from one Hawaiian port to another next year flying Old Glory above its red-white-and-blue hull sporting a bald eagle, passengers sitting in the Liberty restaurant or John Adams coffee bar might reasonably conclude that they're on an American ship.

They would be wrong.

Although the law regulating domestic shipping is more than eight decades old, Congress had no trouble creating a loophole for a generous political benefactor. The deal started with a failed, $180-million scheme to build ships in Mississippi at taxpayer expense and ended with a sweetheart deal for Norwegian Cruise Line, whose corporate offices are in Hong Kong and Malaysia, the New York Times reported.

NCL was allowed to buy the unfinished pieces of the two Mississippi ships for $24-million, finish building them in Germany and then put American flags on those and an existing ship, whose name will be changed from Norwegian Sky to Pride of Aloha.

Other foreign ships that want to cruise the Hawaiian Islands have to make a stop outside the country, usually in Mexico or Canada, an inconvenience that adds five sailing days to the route. The law is meant to protect our own merchant marine industry, guarantee reliable shipping in emergencies, provide jobs for Americans and keep tax dollars at home. Foreign shipping interests have a competitive advantage by operating under laws that allow low wages and taxes and lax oversight.

Even some America businesses want the law changed, saying they pay too much to ship their products. And while the law may have become impractical in a global economy, there is an upfront way to change it - through public debate with all stakeholders being heard.

NCL took the back door. It sweet-talked a Hawaiian senator and representative and gave them and the state's Democratic Party thousands of dollars in contributions. (To be safe, NCL offered the Republican Party a ship to use as an entertainment center at its convention, but withdrew it amid controversy.)

In return, Congress added the loophole for NCL's three ships through a provision to an unrelated appropriations bill. There was little public discussion and no hearings. (Congress may also allow Nabors Industries, a U.S. shipping company that reincorporated in Bermuda to avoid paying taxes, to continue to ply domestic routes.)

The American shipping industry and NCL's foreign competitors are upset by the outcome, as taxpayers should be. While Congress will make NCL hire American crews and pay taxes on the three ships, that isn't enough to justify this giveaway. NCL will have a competitive advantage, virtually a monopoly on the domestic Hawaiian cruise business.

Yet it is the artifice that is the most damaging. It appears that the real pride of America is for sale.

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