Consultants working in DC to amend tariff code

Washington Rep. Pete A. Tenorio disclosed Friday that the Babauta administration has employed consultants in Washington D.C. to specifically lobby for amendments to the U.S. Tariff Code to help local garment manufacturers compete in the wake of the worldwide lifting of trade quotas.

It is the reason, he said, why “I don’t want to get into the area as a representative because [Gov. Juan N. Babauta] is working with some consultants in Washington to follow it up.”

“I’m not involved in that. I have my own way of doing things there,” he said, adding that he works with congressional staff and committee members on the issue.

He declined to give details about the administration’s consultants, but he said, “They are experts in that area.”

“I respect that. But as I said, if I want to be involved, it has to be my office that’s delegated and given the primary initiative to do it,” he said.

But then Tenorio said, “I always promote the concept of unified position.”

When asked on the progress of the CNMI’s efforts to have the Tariff Code amended, particularly Headnote 3(a), Tenorio said, “That issue has somewhat lesser impact for now,” considering that some factories in the CNMI are closing up or downsizing.

The amendment, he said, would remain useful “for the remaining factories, giving them an advantage in importing to the U.S. with lesser requirements.”

Babauta’s legal counsel Steve Newman, who flew to D.C. last month, earlier said the administration is working closely with the U.S. Congress in pushing for the immediate amendment to the U.S. Tariff Code.

The amendment would allow CNMI garment manufacturers to reduce the value-added requirement of garment products produced in the Commonwealth from 50 percent to 30 percent.

Newman, who traveled with Babauta to D.C., said they met with key congressional staff to present the CNMI’s situation.

“We met with congressional staffers. …We reiterated the government’s position that it [amendment] is necessary due to the fact that [CNMI garment firms] form a significant tax base structure,” he said.

Amending the federal law, he said, would put the CNMI “in a clearer position, and in doing so, would allow the garment industry to remain competitive in this environment, at least for the next few years.”

This comes amid fears that China would further dominate the U.S. market, the world’s largest market for apparel, with the lifting of quota restrictions effective Jan. 1 this year.

China produces apparel at substantially lower costs than other countries and territories, including the CNMI.

The Saipan Garment Manufacturing Association earlier said that, without amending the tariff formula, there is no way to get the prices down.

The government has acknowledged that any huge losses in the garment industry would adversely impact the CNMI government’s ability to provide essential services to the public.

At least two garment factories, La Mode and Marianas Fashion, were reported last week to be closing down its operations in the CNMI.