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Rep. Newhouse Unveils Draft ECONOMICS Act to Prevent Future Port Slowdowns

October 5, 2015
Press Release
Legislation will establish new economic safeguards to prevent damaging ports slowdown

WASHINGTON, D.C. – During a press conference today at Easterday Farms in Pasco, WA, U.S. Representative Dan Newhouse (R-WA) unveiled details of draft legislation he plans to introduce in Congress, the Ensuring Continued Operations and No Other Major Incidents, Closures, or Slowdowns (ECONOMICS) Act. The ECONOMICS Act would establish economic benchmarks that trigger measures to prevent future port slowdowns, such as the West Coast ports slowdown. The slowdown devastated families, businesses, and agriculture producers across Washington and continues to cause ongoing economic damage. Rep. Newhouse was joined at this morning’s news conference by Mike LaPlant, President of the Washington Farm Bureau and Matt Harris, the Director of Government Affairs & Assistant Executive Director of the Washington State Potato Commission.

“As far too many Washingtonians know, the prolonged contract negotiations and slowdown of cargo handling at the 29 West Coast ports late last year and early this year caused significant disruptions throughout the economy, both nationally but certainly here in Washington State,” said Rep. Newhouse.

Rep. Newhouse continued: “From May of 2014 through February of 2015, the Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU) engaged in lengthy negotiations of a multi-year contract covering those 29 West Coast container ports. On May 20th and 22nd, the PMA and the ILWU finally ratified the agreement that had been reached in February. 

“In a typical year, the state of Washington exports one-third of its agricultural crop—most that going to markets in Asia. And some commodities, it’s much higher than 30 percent. According to the Northwest Horticultural Council, Washington’s apple industry lost $100 million in sales opportunities and canceled orders due to the slowdown. The Agriculture Transportation Coalition estimated that total U.S. agricultural export losses (for fruits, vegetables and meats shipped by container) were almost $400 million per week in December of 2014. Washington hay producers are still feeling the impacts of unsold inventory on their export markets. These slowdowns jeopardize hard-won market share. Those customers do not and will not come back for producers and processors overnight. It’s tough to get them back. The Washington potato growers estimate they have lost $23.5 million in French fry exports every month the slowdown took place. That directly harms potato growers and packing houses like the Easterdays’—the one we are in today. According to the Federal Reserve, exports from West Coast ports dropped dramatically—by 20.5% —in the first quarter of 2015.

“The devastating effects of the months-long dispute show the critical need to make a line in the sand: because two parties should not be able to hold a whole economy hostage. We are here today at Easterday Farms in Pasco, a family farm and potato packing facility which felt the impacts of the slowdown. But sadly, their story is not unique. Family farms and businesses in Central Washington simply can’t afford another slowdown. Too many livelihoods are held hostage by the few.

“That is why I am announcing draft legislation, which is called the Ensuring Continued Operations and No Other Major Incidents, Closures, or Slowdowns (ECONOMICS) Act, which would create new economic safeguards to prevent future slowdowns such as the West Coast ports slowdown that devastated families, businesses, and agricultural producers across Washington and continues to cause economic damage.

“The goal of the draft legislation is to establish a safeguard mechanism to prevent future disputes like the slowdown from harming our economy. This bill would create economic triggers that mandate a legal mediation process in an employer-labor dispute. Regardless of who is at fault—and we are not pointing fingers at any particular party—we need to ensure that one side cannot negatively harm so many, and Congress must provide additional tools to keep supply chains operating and the economy running. 

“The ECONOMICS Act is a step forward to a solution that safeguards our export economy, and I am ready to work with stakeholders and my colleagues in Congress on this legislation to end the threat of catastrophic slowdowns and other disruptions at our ports.”

Mike LaPlant, President of the Washington Farm Bureau: “Port slowdowns are extremely detrimental to the agricultural industry. Congressman Newhouse is a champion for agriculture and the legislation he drafted will help ensure the sustainability and future of the industry.”

Matt Harris, Director of Government Affairs & Assistant Executive Director of the Washington State Potato Commission: “We support congressional action that helps alleviate bottlenecks in the communication process between the Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU). The recent port disruption hurt family potato farms costing rural Washington millions of dollars’ worth of contracted sales which would have generating revenue for the state to help support our schools, first responders and social services.”

The ECONOMICS Act

Under existing law, the President has the emergency authority to appoint a Board of Inquiry to recommend whether a judicial injunction should be sought in a dispute. The ECONOMICS Act puts in place specific “triggers,” so that when certain economic impacts surrounding a dispute occur, a Board of Inquiry must be convened, and the Board is required to report to the President and the public to recommend whether there should be a judicial injunction.

These triggers include:

  • Number of Ports: When a labor dispute occurs at 4 or more port facilities
  • Number of Employees: When the number of affected employees at ports totals 6,000 or more
  • Drop in Exports: When U.S. exports drop 15% or more in one month, or 5% or more in two consecutive months

The ECONOMICS Act also widens the definition of “strike” throughout U.S. labor law to clarify that the President has broad authority to intervene in a variety of disruptions – including slowdowns, strikes, lock-outs, or threatened strikes or lock-outs. This change in definition will also apply to economic impact triggers.

The purpose of The ECONOMICS Act is to require an objective standard that defines when a dispute has reached a level of economic impact to require possible intervention. In the heat of a dispute, this threshold can be hard to determine or agree upon. By requiring an objective standard for economic impact before a dispute takes place, disputes can be prevented from paralyzing our economy, costing jobs, and harming businesses and consumers alike.

Click here for a one-page summary of the Ensuring Continued Operations and No Other Major Incidents, Closures, or Slowdowns (ECONOMICS) Act.

Click here for the text of the legislation.