CNMI to lobby vs. imposition of tariff

Posted on Apr 23 1999

Worried over a proposal seeking to strip the CNMI of duty free privilege, Gov. Pedro P. Tenorio yesterday said his administration will lobby against such move in the US Congress because of its disastrous impact on the island economy largely dependent on the garment industry.

US Congressmen Bob Franks (R-NJ) and John Dingell (R-Michigan) have sponsored a legislation that seeks to impose tariffs on finished garment products coming from the islands, as well as forbid the use of “Made in USA” labels on locally-produced apparel.

Under the Covenant, which established the Commonwealth’s political union with the United States, CNMI is exempted from the Headnote 3(a) and is allowed to control its immigration and minimum wage.

“We will appeal to the US Congress to seriously review this and see what they can do to assist us in anyway possible,” the governor said in an interview. “If the impact of the Asian crisis continues and other factors like these, it will be disastrous for the CNMI.”

According to the governor, such proposal would further hurt the island economy, especially at this time when the tourism sector, once the lifeblood of the CNMI, is in distress because of the financial troubles in Asia where the industry relies for visitors.

The slowdown in the tourism industry has made the garment sector, whose income topped $1 billion in 1998, a main provider of revenues to the cash-strapped government. In 1997, its contributions to the local economy represented 23 percent of the general funds.

Tenorio raised fears that the approval of such measure would hasten the departure of garment manufacturers, who, at this point, are considering moving their factories to other countries where labor and production cost are cheaper. At this point, production has slowed down after US retailers scaled back orders following the $1 billion class action lawsuit filed by garment workers.

“I hope the feds will consider that…We have no natural resources that we can depend on except our tourism which is not prosperous because of the economic situation in Asia,” Tenorio said.

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