U.S. Congress may approve ‘Franks bill’ next • Legislation seeks to eliminate trade privileges to CNMI

The House leadership warned yesterday against bolder moves in the U.S. Congress to cut off trade privileges granted to the CNMI under the Covenant as well as to press federal takeover of the local immigration.

House Floor Leader Oscar M. Babauta expressed alarm during a special session that the pending bill seeking to deny the islands of the privilege to use the “Made in USA” label and to impose tariff on U.S.-bound goods from here is likely to be voted on the floor next week.

HR 222, sponsored by Rep. Bill Franks from New Jersey, needs only four more sponsors from the U.S. House to bypass committee voting and to head straight to full voting by the more than 400 members of the lower chamber, he said.

“It’s more than likely that it will be on the floor of Congress next week… if the CNMI stands still and does nothing,” Mr. Babauta told his colleagues.

He said that this legislation gives only 15 days for the CNMI to adjust to changes to Headnote 3 (a) in the Covenant — the duty-free, quota-free treatment for products manufactured on the islands such as apparel and garment exports to the mainland.

“We are standing on the edge here,” said Speaker Benigno R. Fitial at the session. He noted that it would wipe out the local garment industry and drastically cut government revenues when 23 percent of the local coffers depend on user’s fee paid for by manufacturers.

“I hope and pray that something will happen now to stave off this,” he added.
Mr. Babauta also disclosed that there has been renewed efforts in the U.S. House to push passage of S. 1052, the bill that will automatically extend federal immigration laws to the CNMI.

Passed by the U.S. Senate last February, the measure offered by Sen. Frank H. Murkowski (R-Alaska) has been pending in the House Resources Committee which has oversight of the CNMI and other insular areas.

Even if committee chair Rep. Don Young (R-Alaska) has already expressed opposition against the takeover bill, some House members, particularly Rep. George Miller (D-California), have been campaigning hard to take action on the proposal.

United effort

Because of these pressures, island leaders must join hands to block attempts to federalize labor, immigration and minimum wage here and to defend the integrity of the Covenant, especially the Headnote 3(a), according to Mr. Babauta.

“We keep saying and we keep prodding other officials of the Commonwealth to join hands [and] put a collaborative effort in support of the defense of our Covenant,” he told reporters in an interview after the session.

Referring to the tariff-free treatment of CNMI-manufactured apparel, the lawmaker stressed that this provision helps make the CNMI survive economically.

“If this is taken away, we’re doomed. It’s going to be an economic downfall for the people of the Commonwealth,” added Mr. Babauta.

On Wednesday, the House urged Gov. Pedro P. Tenorio to hire Preston, Gates, Ellis 7 Rouvelas, Meeds to undertake lobbying and public relations campaign in Washington D.C. in a bid to protect local interests.

While presence of CNMI officials in the nation’s capital to meet with U.S. lawmakers is necessary to help fight federal takeover proposals, the House leaders believed it can only do so much owing to the pressures being exerted by labor unions and other interest groups opposed to the current economic system on the islands.

Mr. Babauta also noted that the local business community, through the Western Pacific Economic Council, has been very active in lobbying on behalf of the government, but these actions are not sufficient if the CNMI is not going to get involved.

“They are very aggressive, but there’s a limit,” he explained. “Most of them are keeping an eye on the operations of their businesses and there’s only so much they can do at this time.”

Mr. Tenorio, in an interview the other day, appeared inclined to grant request by lawmakers to hire Preston Gates, although he is still mum on any final decision by his administration.