‘A good possibility on tariff code amendment’

Lt. Gov. Diego T. Benavente said there is “a very good possibility” that the Headnote 3(a) of the U.S. Tariff Code would be amended to allow local manufacturers to compete in the international market.

“I’d say that the possibility is very, very good. It’s just a matter of continuing our best efforts to lobby for it,” said Benavente, who just arrived from his weeklong visit to Washington D.C.

Benavente led a delegation to the nation’s capital to rally support for the amendment of Headnote 3(a), which would allow the CNMI garment manufacturers to reduce the local value-added requirement on their products from 50 percent to 30 percent.

The amendment would result in less production costs for the local garment industry and less solid waste as it allows cutting of fabric materials outside the CNMI.

Benavente said his team met with several U.S. lawmakers and congressional staffers and other groups on how to best tackle the issue.

“We met with a lot of people. We’ve got suggestions and options on how to make the amendment go through,” he said.

Benavente said it is not known yet who would introduce the amendment bill.

“We haven’t really finalized [that aspect yet]. We’re in the process of massive consultation,” said Benavente.

He said delegates from other insular areas including Guam’s Madeline Bordallo, Donna Christian-Christensen from the U.S. Virgin Islands, and Eni Faleomavaega from American Samoa were most supportive.

Washington Resident Representative Pete A. Tenorio and Saipan Chamber of Commerce president Alex Sablan conducted numerous meetings with over 17 members of Congress and their staff.

Accompanying them to the meetings were representatives from lobbying firm Sandler, Travis and Rosenberg, whom CNMI officials consider as experts in trade and related problems for their many years of experience working with either the U.S. Trade Representatives office or the U.S. Congress.

Among the senators the delegation met were Sens. George Allen from Virginia, Ron Wyden from Oregon, and Daniel Akaka from Hawaii.

From the U.S. House of Representatives, they met with Reps. Jim McDermott from Washington, Thomas M. Reynolds from New York, Charles B. Rangel from New York, E. Clay Shaw from Florida, Ed Case from Hawaii, Jerry Weller from Illinois, Ron Lewis from Kentucky, and Dan Burton from Indianapolis.

The delegation also met with Toby Burke, President Bush’s Special Assistant for Intergovernmental Affairs and officials at the Office of Insular Affairs.

The Babauta administration said that without the amendment, the garment industry will continue to lose its ability to trade in the global market.

It acknowledged that the drop in manufacturing output, 25 percent from 2000 to 2004, and a minimum 10 percent decline this year, has had a detrimental effect on government revenue.

The government gets 30 percent of its funds directly from the garment industry and another 20 percent in indirect taxes.