Urgent congressional help sought on touchback rule

Gov. Arnold I. Palacios appealed to a U.S. House of Representatives committee yesterday for urgent congressional support for legislation to repeal or at the very least delay the implementation of the “touchback” provision of the CNMI-Only Transitional Worker program, which is due to go into effect next month. He told the committee that it will adversely impact many businesses in the CNMI when implemented.

Palacios also recommended to the Committee on Natural Resources for the U.S. Congress to revisit the provisions of the Covenant between the U.S. and the CNMI, specifically Section 702, which provides direct financial assistance for the CNMI government operations, capital improvement, and economic development.

The governor offered these recommendations in his testimony during the committee’s oversight field hearing in Guam that was held at the Hilton Hotel in Tamuning.

Presided over by committee chair Bruce Westerman (R-Ark.), the hearing examined the importance of U.S. territories and the Freely Associated States to the United States’ ability to counter the People’s Republic of China’s influence in the region and maintain the nation’s strategic interests in this part of the globe.

At the oversight hearing, Palacios was joined in the first panel by Guam Gov. Lourdes Leon Guerrero, Republic of Palau Minister of Finance Kaleb Udui Jr., Federated States of Micronesia Department of Foreign Affairs acting Secretary Ricky Cantero, and Republic of the Marshall Islands Majuro Minister of Foreign Affairs and Trade Jack Ading.

Witnesses in Panel 2 were Guam National Guard Adjutant General Brig. Gen. Michael W. Cruz, U.S. Army (retired) Brig. Gen. Roderick R. Leon Guerrero, Guam Legislature Vice Speaker Tina Barnes, and World War II survivor Irene Sgambelluri.

Palacios said to strengthen its security architecture in the Pacific, and to bolster defenses against the Chinese Community Party’s threats, the U.S. should expand its engagement with all of the island jurisdictions, and increase support for the economic and social development of these communities.

On the touchback provision, Palacios said the CNMI is currently facing a workforce shortage that threatens its economic recovery.

While the CNMI fully appreciates the federal government’s considerable financial assistance for infrastructure improvements, Palacios said the Commonwealth will not be able to carry out most of these projects because of its labor challenges.

He noted that the touchback provision would require a significant portion of the workforce to exit the Commonwealth for an indefinite period while they wait for new work permits to be processed.

Palacios said the touchback provision could not come at a worse time for the Commonwealth as this will further deepen the CNM’s economic vulnerability in the region.

Relative to the workforce shortage challenge, the governor asked for the committee’s support of Delegate Gregorio Kilili C. Sablan’s (D-MP) legislation, H.R. 560, the Population Stabilization Act, which aims to shore up the eroding population and workforce of the CNMI by providing stability and permanent residency to the Commonwealth’s long-term foreign workers.

Further, Palacios asked Congress to pass legislation that recognizes the unique challenges that confront Pacific island communities and make changes to federal policy that hinder economic and social development.

For instance, he said, while they understand and support the goals of the Build America, Buy America Act, this policy is untenable for insular areas in the Pacific Islands when it makes the sourcing of equipment and supplies extremely cost-prohibitive and when it is exceedingly difficult for small island territories to compete with the bigger states in procurement.

“A blanket BABA waiver from Congress across the federal family would efficiently resolve the issue, and allow the territories to access closer markets with allied nations so that our projects can move forward,” Palacios said.

In relation to this and other challenges, the governor also asked for the committee’s support of the bipartisan H.R. 5001, which would place special advisors for the insular areas in every executive department of the federal government to ensure that the concerns of island communities are considered in federal-decision-making.

Finally, Palacios asked Congress to establish the Northern Marianas as America’s diplomatic center in Micronesia, which can be supported by a network of national security advisors across the territories and Freely Associated States.

He said these networks would offer critical support for territorial governors and Micronesian heads of state, and build capacity to effectively respond to difficult and destabilizing problems, such as illegal, unreported, and unregulated fishing and organized crime.

Palacios said the stability of America’s territories and allies in Micronesia are inseparable from national security and peace in the region.

“Help us help ourselves, so we are stronger partners in bolstering national security and ensuring that the Pacific remains a haven of peace, prosperity, and freedom,” he said.

In the opening part of his testimony, Palacios said it is in the interest of national and global security for the U.S. government to protect and fortify its Pacific territories and allies of the Freely Associated States of Micronesia against the growing threat of the CCP.

The governor expressed happiness to see the U.S. is at last close to completing negotiations to renew all of the Compacts of Free Association.

He noted that the U.S. territories of the Northern Marianas, Guam, and American Samoa firmly anchor America’s position in the Pacific and, together with the Freely Associated States, create a vast corridor of peace and security that spans nearly three million square miles and connects to the seas of other allied nations.

Recognizing the strategic importance of America’s territories and allies in Micronesia, the CCP has moved aggressively to fill perceived voids in American assistance and to capitalize on the social and economic vulnerabilities of Pacific island communities, Palacios said.

“We see that aggression in massive investments in infrastructure and economic development. We see it in land grabs and fisheries expansions,” he said, as well as in research vessels lurking around the undersea fiber optic cables, in organized crime, public corruption, and political interference.

During times of economic hardship and vulnerability in the Northern Marianas, they too have turned to Chinese investment for solutions, he said. In fact, for almost 40 years now, the People’s Republic of China has had a firm foothold in the islands, he added.

“Chinese investors were always conveniently there when we needed them, offering new industries and revenue sources that also directly or indirectly advanced the interests of the PRC in the Marianas,” the governor said.

Palacios said when the garment industry shut down in early 2000s, the Commonwealth lost a major source of revenue, and drastic austerity measures had a deeply destabilizing effect.

To make up for the loss, he said, the CNMI turned to Chinese tourism and to Chinese casino gambling. For a brief period then, Chinese tourism and gambling revenues propped up the Commonwealth’s government and economy., the governor said

“But this was short-lived and had unfortunate consequences,” said Palacios, adding that today, Chinese tourism has dried up and the casino has shut down.

Palacios said the Commonwealth economy continues to struggle, and the government is in deep fiscal distress.

“These are conditions that make the Commonwealth again acutely vulnerable to CCP exploitation,” he said.

The field hearing was called “Peace Through Strength: The Strategic Importance of the Pacific Islands to U.S.-led Global Security.”