Am. Samoa Governor Calls On U.S. Support For Tuna Canneries

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Lolo calls for stop in minimum wage increases to compete against China

By Fili Sagapolutele

PAGO PAGO, American Samoa (The Samoa News, Dec. 17, 2014) – Gov. Lolo Matalasi Moliga has called on the U.S. Department of Interior for support in fisheries issues which will have an impact on the future of American Samoa’s two tuna canneries, already faced with stiff global competition and "cut throat" policies pursued by the Chinese.

Lolo’s request was made in a letter last month to Esther Kia’aina, the new Interior Assistant Secretary for Insular Areas. The letter included a list of economic and social developments for American Samoa and the governor cited fisheries issues that will impact the future of the local canneries which need DOI assistance.

One of the most pressing issues that would erode the local canneries’ competitive edge is the next mandatory minimum wage increase set to go into effect on Sept. 30, 2015, the governor wrote. He is asking DOI’s support in halting this, and any more increases.

"Given the significantly changed dynamics of the fisheries industry caused by the ‘cut-throat’ policies being pursued by the Chinese, the resumption of the application of the federal minimum wage will severely erode the competitive edge of the two canneries, which could very well cause their demise," Lolo said.

The administration didn’t elaborate on the Chinese policies but they — along with the U.S. fishing fleet — have raised concerns over the increased presence of Chinese vessels fishing in the region as such vessels are subsidized by the Chinese government. China is among the foreign countries with a thriving tuna cannery industry competing with American Samoa.

Kia’aina was also called upon to support extension of the federal tax credit 30A, which is critical to the survival of the local canneries.

Lolo says the two canneries competitive advantage has been "methodically reduced" by federal actions such as the elimination of federal incentives (such as the IRC 936 tax credit) and soon to lapse is the federal 30A tax credit, made worse by the mandated minimum wage hikes.

He said American Samoa needs support and assistance from DOI to "advocate" for the territory’s request to extend the 30A tax credits, restore the traditional process to determine local minimum wage and resurrect the IRC 936 type of federal incentive to stimulate local economic development.

(When the IRC 936 incentive was eliminated, it was replaced with the 30A incentive.)

The U.S. House on Dec. 3 passed a tax extender package that includes out-going Congressman Faleomavaega Eni’s provision for an extension of 30A benefits for another year. The measure is pending in the U.S. Senate, which has its own version of the tax extenders.


Another issue that will impact the canneries is the $90 million South Pacific Tuna Treaty signed in October this year between the U.S. government and the Pacific Island Forum Fisheries Agency (FFA), whose membership covers 17 countries. The new treaty takes effect in 2015.

The treaty, which allows some 40 U.S. flagged vessels to fish in the region, drastically reduces fishing days from just over 5,000 to only 300 days for U.S. vessels. The biggest concern for American Samoa and the canneries is the impact the treaty will have on the U.S. fleet fishing in Kiribati’s Exclusive Economic Zone (EEZ), which is considered the largest fishing area compared to the EEZs of the other Pacific Islands.

Lolo said American Samoa needs assistance from DOI "to compel" the U.S. State Department — that negotiated the treaty — to revisit the treaty.

"Moreover," said Lolo, "authorize the governor [of American Samoa] to negotiate fishing treaties with our island neighbors for our locally based fishing fleet."

Early this month, Tokelau — a member of FFA — signed a memorandum of understanding with Tri Marine International, which local operations include Samoa Tuna Processors Inc, and 10-locally based U.S. flagged vessels. (See Dec. 3 edition of Samoa News for details.)

As part of the MOU, the Tokelau government will provide fishing access to longline vessels targeting both albacore and the tropical tunas, which will supply Tri Marine’s new tuna processing plant in American Samoa.

Tokelau will also provide Tri Marine purse seine vessels with fishing days over and above what is provided under the South Pacific Tuna Treaty, if necessary.

Earlier this month, Lolo also signed a separate MOU with Tokelau, dealing with trade and fisheries issues.

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