Cabotage
Derived from the French word “caboter”, which means to sail along the coast, cabotage refers to the right to operate sea, air, or other transport services within a particular country.
Countries that have cabotage laws in place essentially restrict the movement of goods within their borders.
In the United States, for instance, under the Jones Act, all goods shipped within a particular country have to be transported on vessels that are built, owned, and operated by Americans. Doing so otherwise is illegal.
A recent report by Seafarers’ Rights International, an international center researching maritime and seafarers’ law, has identified 91 member states of the United Nations that have cabotage laws restricting foreign activity in their domestic coastal trades. These include the United States, Russia, Canada, China, South Korea, and Japan, among others.
Cabotage rules were imposed initially as a means to maintain a national merchant fleet, protect local waterways, safeguard national borders and address other national security concerns.
Increasingly, however, such regulations are becoming largely motivated by commercial concerns and protectionist tendencies.
Proponents of cabotage laws believe that they serve an important role in protecting and promoting domestic companies, as well as the security and economic balance of a country. But the practice has also come under fire in recent years as it restricts free trade among countries, adding to the complexity and costs of logistics.
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