Trade zone wants environmentally safe companies

CNMI’s Free Trade Zone must only attract environmentally friendly businesses to protect the island’s natural beauty and not jeopardize the Northern Marianas tourism economy, said Bob Jones, chairman of the FTZ Committee.

The CNMI government hopes to attract capital intensive, computer and machine-driven type business operations with a minimum number of skilled higher-paid foreign workers in the Free Trade Zone. Likewise, these businesses must have training programs for U.S. citizens and local residents.

Jones said the activities in the free trade zone must also be culturally acceptable, not dependent on low wages or mass importation of foreign workers.

Based on the Free Trade Zone plan, industries being targeted include licensing and distribution, telecommunications, computer programming services, software development, Internet marketing, back office and data base storage and retrieval operations, finance and trade related services.

“It should be clear that it is not the political leaders’ intentions to lessen the existing tax base by allowing existing CNMI businesses to relocate into the free trade zones. On the other hand, we expect the existing businesses to benefit significantly from the spin of free trade zone operators,” said Jones.

The committee chairman noted that most free trade zones including those in the U.S. develop mass infrastructure facilities to entice investors to locate in these special areas.

In San Antonio Texas, officials promote the availability of skilled labor to lure aircraft suppliers and other businesses to relocate in the free trade zone including a $14 million federal grant to retrain former base workers there.

Also in Amarillo, Texas, officials have given over $100 million in grants and loans since 1990 to companies that pay above average wages. Nearly 5,000 jobs have been added.

In Maryland, local officials are dangling $50 million in tax breaks, road improvements and grants to prevent Marriot Cop. from moving its headquarters to Virginia.

While the Northern Marianas may not be able to offer cash incentives to locate here, Jones believes that the CNMI’s Free Trade Zone can still attract the needed number of investors.

Among the list of incentives include attractive lease rental on public land, substantial tax incentives such as no import tax, no GRT, no impact tax and up to 100 percent corporate tax rebates depending on the training and investment benefit to the local residents, availability of skilled labor at reasonable rates from neighboring countries, protection of U.S. legal system including copyright and trademark laws, year round operations without worrying about tariffs and quotas, regular scheduled service of shipping carriers.

To complement the CNMI’s efforts, Jones said he hopes Guam would also establish its own free trade zones. He said large companies in the states that have marketing offices on Guam may use the CNMI for some of their manufacturing needs in the future.