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CAFTA boosts CNMI quest for tariff amendment
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Posted on Aug 03 2005
The recent passage of the Central American Free Trade Agreement by U.S. Congress boosts the CNMI’s chances in lobbying for the amendment of the U.S. Harmonized Tariff Code to benefit the local garment manufacturers.
Gov. Juan N. Babauta’s legal counsel Steve Newman said during yesterday’s hearing at the House of Representatives that while the benefit is “secondary,” CAFTA approval would compel U.S. lawmakers to even more consider the plea of the CNMI, a U.S. territory, noting that the free trade agreement benefits foreign countries.
“The CNMI is comparatively disadvantaged. The CNMI deserves to be treated equally or better with countries that have free trade agreements,” he said.
CAFTA extends trade privileges to Nicaragua, Guatemala, Honduras, El Salvador, Costa Rica, and the Dominican Republic.
Similar trade agreements had been granted to Middle East countries like Jordan and Egypt.
Newman said that the Babauta administration had intentionally held off its lobbying in Congress until the passage of CAFTA.
In a statement, Babauta said the approval of the free trade agreement is potentially valuable in the CNMI’s efforts for the amendment of HeadNote 3(a) of the Tariff Code.
“It appears that our being cautious and prudent with introduction of legislation to amend our tariff privileges may pay dividends now that [CAFTA] has passed. Our chances of success have increased as well, now that the Bush administration has succeeded in their trade priorities,” said Babauta.
The amendment of Headnote 3(a) allows textile and apparel manufacturers here to increase the value of imported raw materials by 70 percent from the current 50 percent for products exported to the U.S.
Lt. Gov. Diego T. Benavente, who flew to Washington, D.C. last month to rally support for the Tariff Code amendment, also said the passage of CAFTA “highlights the compelling story that we are presenting in D.C.”
Benavente said earlier that several members of U.S. Congress have expressed willingness to help the CNMI in its lobby for the congressional amendment.
CAFTA, introduced by U.S. Senate, narrowly passed the U.S. House of Representatives last week, with only a two-vote margin.
