Benavente: Give FTZ a chance

House Speaker Diego T. Benavente urged the Senate to set aside differences on the proposed free trade zones on the island and approve the plan to begin the process of attracting investments into the Northern Marianas.

“We’ve got to give it a shot, give it a chance because we’ve got nothing now to offer to investors,” he said in an interview.

Benavente, author of the administration-sponsored legislation that will create these special economic sites, met with members of the Subcommittee on Free Trade Zone and Senate Vice President Thomas P. Villagomez last Friday to discuss the latter’s concerns on the measure.

Villagomez last week questioned the plan to provide 20-year tax breaks to businesses within the zone, saying the period is too long when he doesn’t see employment opportunities for the local residents.

But Benavente maintained the incentive package, the length and amount of the tax-free status, will still depend on the negotiations to be conducted between the investor and the proposed Commonwealth Free Trade Zone Authority which will oversee these sites.

He said the bill has provided that the period be left open from one year to 20 years, depending on the offers made by an investor and whether the government agrees with the terms.

A provision also allows the government to tie the incentives to employment of local workers, based on the percentage of the jobs given to the residents as compared to foreign manpower.

Thus, the tax abatement will range from one to 100 percent depending on the percentage of local workers employed by a business, according to Benavente.

“I asked the vice president to reconsider and pass the free trade zone bill,” he said. “What we are trying to do is to convince him that the 20-year limit provision is actually a maximum figure.”

Introduced in May and passed last month by the lower chamber after three-month review, House Bill 11-389 has stalled in the Senate after Villagomez asked for its further review due to concerns on its key provisions.

He said a study should be conducted by the subcommittee to back up the provisions in the legislation establishing these special economic sites to ensure that the Commonwealth will benefit from the anticipated windfall from the plan.

Last Friday’s meeting between the legislator and the business sector was intended to clear doubts on the plan, considered a centerpiece program of the Tenorio administration in efforts to spur the local economy and diversify it beyond tourism and garment manufacturing.

Benavente said he hopes the upper house will not derail passage of the measure, noting the Legislature can still amend or repeal it “if it doesn’t work out.”

Villagomez could not be reached for comment as he left for Manila late Friday, according to his office.