SGMA to meet with US Senate staffers

Garment industry representatives will meet and discuss issues affecting the sector with visiting U.S. senate staffers Alan Stayman and Josh Johnson this week.

Saipan Garment Manufacturers Association executive director Richard Pierce said the two staff members of the U.S. Senate Energy Committee will tour a factory during their stay on the island.

A meeting with the apparel group would take place on Friday.

Among other issues, Pierce said they would raise the proposal to amend Headnote 3(a) of the U.S. Harmonized Tariff Schedule, which would help the CNMI garment manufacturers compete in the international market.

“We’d be speaking with the visiting Senate staffers on this,” said Pierce yesterday.

The SGMA official, who has been to Washington D.C., thrice in the last six weeks to lobby for the amendment, said his team had already talked with the “both of these groups.”

“Mr. Stayman is amenable to the idea. He certainly understands the economics but he still has questions,” said Pierce.

Stayman, who is with Democrat Sen. Jeff Bingaman, a ranking member of the Senate Energy Committee, is familiar with local issues, having been a former Office of Insular Affairs director.

As for Johnson, a staff member of committee chair and Republican Sen. Pete V. Domenici, this will be his first visit to the CNMI.

“We will introduce and show to Mr. Johnson our industry. It’s one of the things that he’ll look at while he is here,” said Pierce.

He said the proposed amendment, which is also being pushed by the Executive Branch and the Legislature, has yet to be introduced in Congress.

“We’re looking for a sponsor. We’re lobbying for support,” he said.

The amendment of the Tariff Code aims to allow local garment factories to increase the maximum allowable foreign content material of their products from 50 percent to 70 percent.

Authorities said the existing 50 percent foreign material value limitation puts the CNMI apparel industry at a disadvantage in view of the worldwide lifting of trade quotas this year.

Currently, the Tariff Code requires that 50 percent of the value of the garment has to be added locally by transformation, in terms of additional labor, packaging or other overhead costs, so that garment products coming from U.S. exporters like the Commonwealth could enter the United States duty-free.

Headnote 3(a) exempts from duty all goods imported from the insular possessions of the U.S. that are outside the customs territory of the U.S.

Raising the level to 70 percent foreign content would allow the local apparel companies flexibility to import cut pieces and panels for assembly, “thereby eliminating cutting operations and efficiently dedicating resources to sewing and assembly operations, which translate into corresponding increase in direct and indirect government revenues.”

Such flexibility to import cut panels and pieces would result in significant reduction in unused fabric excess that end up in the sanitary landfill, contributing to pollution, authorities said.