Trade-zone bill gets rush action

A legislation establishing the first ever free trade zone in the Northern Marianas heads to a joint House committee for review, including comments and inputs from the business sector, before lawmakers consider the proposal on the floor

House Speaker Diego T. Benavente, who sponsors the administration-backed measure, tossed it yesterday to the committees on Commerce and Tourism as well as Ways and Means for further deliberation.

“Because not only that is there going to be a creation of a commission under the free trade zone bill, but there’s also an accompanying legislation that is going to be required to accommodate the free trade zone intentions, such as exemptions from certain taxes,” he said in an interview.

The joint panel is expected to meet this week to chart their actions on the measure considered urgent by the Tenorio administration in the wake of the worsening economic crisis on the island.

Rep. Oscar M. Babauta said the committees would seek recommendations from the Saipan Chamber of Commerce and other business groups to allow participation by the private sector on its deliberation.

“We will make amendment to the bill if warranted,” he explained in a separate interview.

Under the measure filed last week by Benavente, a government-owned corporation, to be called the Commonwealth Free Trade Zone Authority and ran by a nine-member board, will have the broad powers to administer the special economic site.

A package of incentives, including tax breaks and exemptions, is included in the proposal as part of the efforts to attract foreign investments into the free trade area as envisioned by a government body tasked to draw up the legislation.

This is a centerpiece of the plan by the Economic Recovery and Revitalization Task Force in a bid to steer business activities on the island following the fallout of the prolonged recession in Asia, NMI’s main tourism market and source of investments.

While there is no definite time frame as to when the bill will actually be presented on the floor for discussion, the House speaker said he had instructed the House members to expedite review of the proposal — a priority of the CNMI government in view of the continuous downturn in the tourism industry.

“If comments (from the business sector) are favorable, then we will go into session and pass it right away,” Benavente explained. “If comments we receive are such that we feel it’s going to need further discussion or even provide for a public hearing, We will do that.”

He also assured the Senate is ready to support the measure once the lower house passes it.

A similar bill, sponsored by Rep. Heinz Hofschneider, is also seeking tax breaks and other incentives for business owners in what appears to be twin measures both aiming at diversifying CNMI’s economic base beyond tourism and garment industries.