U.S. BILL WOULD EASE TARIFFS ON CNMI EXPORTS

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SAIPAN, CNMI (Saipan Tribune. July 31) - Two U.S. House of Representatives lawmakers have introduced a new bill that seeks to amend the tariff code as it applies to the importation of products to the United States from U.S. territories, including the Northern Marianas.

U.S. Representative Jeff Flake (R-Arizona) and U.S. House Delegate Luis Fortuno (R-Puerto Rico) introduced H.R. 3165, the "Insular Areas Trade Enhancement Act", in the U.S. House of Representatives on July 24, 2007. H.R. 3165 would amend the General Notes of the Harmonized Tariff Schedule of the United States with respect to certain products imported from United States insular possessions.

The bill is almost identical to the "Insular Possessions Act of 2005" introduced in the U.S. Senate by senators Larry Craig (R-Idaho) and Daniel Akaka (D-Hawaii). S. 1954 was introduced to give the CNMI and the other insular areas equivalent treatment with foreign countries that have entered into Free Trade Agreements with the United States.

Governor Benigno R. Fitial expressed his "sincere appreciation" to both Flake and Fortuno and, as members of the newly created House Natural Resources Subcommittee on Insular Affairs chaired by Delegate Donna Christensen (D-Virgin Islands), Fitial hopes to find additional sponsors and support within their House subcommittee.

"Many members of the newly created Subcommittee on Insular Affairs would be affected by the legislation, and as such, we respectfully seek their cooperation and support in these times of tougher economic challenges for all the American territories," said Fitial.

A Senate committee visit to the Northern Mariana Islands precluded Fitial's and Washington Representative Pete A. Tenorio's attendance at the first Insular Affairs Subcommittee Hearing on Budget held February 27, 2007. The Governor submitted statements for the record, requesting the Subcommittee's assistance, including the legislation offered by Flake and Fortuno.

Special assistant for trade relations and economic affairs Richard A. Pierce expressed optimism that with passage of the amendment of General Note 3(a), what remains of Saipan's manufacturing base revenue stream could be preserved past the generally assumed demise of the industry at the end of 2008.

"This amendment, in conjunction with reconsideration of a second wage hike in 2008, could allow manufacturing to continue in the CNMI, as well as possibly open new diversification in other product commodities utilizing the special tariff privilege afforded all insular areas," Pierce said.

Factory production has slipped from a high of US$1.06 billion in 2000 to US$489 million in 2006. There were 34 factories in 1999; only 15 remain.

Employment has dropped from over 16,000 to just over 6,000 today. Total CNMI revenue from taxes, fees and indirect collections has dropped from nearly US$80 million in 2000 to an estimated less than US$30 million this year.

The House Natural Resources Subcommittee on Insular Affairs will conduct hearings on Saipan on August 15, 2007, where the subcommittee will consider federal legislative initiatives affecting the CNMI economy.

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