SGMA: Taxing CNMI garments will kill local manufacturers

Local garment manufacturers will be forced out of business if US Congress passes a proposed legislation taking away the duty-free privileges granted the Northern Marianas, paving the way for foreign countries to bring more apparel goods into the mainland.

This is the contention of the Saipan Garment Manufacturers Association in a letter that will be sent to members of the US House of Representatives in efforts to thwart attempts to tax CNMI products entering the American domestic market.

The letter also comes on the heels of recent statements made by the American Textile Manufacturers Institute (ATMI) to US lawmakers lashing out at the “Made in the USA” label in finished garments from the islands which they alleged are produced under sweatshop conditions.

A bipartisan measure is being introduced in the Congress seeking to strip the Commonwealth trade privileges provided under Headnote 3(a) of the Covenant, the agreement that accepted the Northern Marianas in the American political family.

“Please don’t let these false charges obscure the big picture,” SGMA said. “If ATMI’s proposed tax is imposed on our goods entering the US market, we will be forced out of business.”

It added that “the apparel that replaces ours made here on US soil will come from foreign countries where the protections of US laws and a living wage do not apply.”

SGMA, which groups the largest garment firms on the island, underscored the need to set the record straight, especially when information reaching Washington does not reflect the real conditions in the CNMI, a chain of islands in the Pacific some 7,000 miles away from the US capital.

They likewise pointed out efforts by the group to ensure compliance with both local and federal laws, adopting a code of conduct patterned after the Apparel Industry Partnership that has been formed between American garment manufacturers and the US Department of Labor.

While the minimum wage level is set by CNMI officials, the garment industry is still subject to environmental, wage and hour, safety and other regulations enforced by both federal and local authorities, including regular OSHA inspection at factories, according to the letter.

SGMA refuted allegations leveled against the group, citing such reports from US Customs denying the illegal transshipments into the island of finished garments from Asian countries.

On claims that the “Made in the USA” label has been abused in the Commonwealth, the group said vast majority of its products do not use it although they are allowed to as part of the American territory.

“ATMI says that its bill will protect the ‘Made in the USA’ label, but the real problem it faces is the loss of US apparel manufacturing to.. foreign countries,” SGMA explained. “Punishing the Marianas will only accelerate that loss.”