Reyes defends trade zone

A member of the Subcommittee on Free Trade Zone yesterday defended a government plan to establish special economic sites in the Northern Marianas, saying the island must take advantage of its close proximity to Asian countries to entice prospective investors.

Rep. Karl T. Reyes, who is part of the group tasked to map out the plan, also underscored its benefits to the local people who will be employed and trained in highly-skilled jobs to be created by companies within the proposed free trade zone.

Responding to opposition by the chair of Board of Public Lands, the representative said CNMI must follow the success of other countries, such as the Philippines, and states, like Hawaii, which have set up their own investment areas to help boost their economies.

“As long as there are available infrastructure and incentives, investors will probably come in,” Reyes explained. “Our proximity to Asia is very attractive and we should take advantage of it.”

Under review by the Legislature, the plan is an attempt by the Economic Recovery and Revitalization Task Force to steer business activities on the island and diversify the economic base following the fallout of the prolonged recession in Asia, NMI’s main tourism market and source of investments.

Unfair treatment

But Public Lands Chair Tomas B. Aldan has thumbed down a proposal to offer tax breaks, lower land lease rate and other incentives to companies within the zone, saying this would discriminate other businesses, such as hotels and garment factories, which have already been contributing to the economy.

He has also questioned the benefits to be derived from the zone as the investors will be exempted from paying taxes and thus, they will not help boost the income of the government.

Reyes, however, maintained the zone will provide employment to residents, although companies will be allowed to hire foreign manpower. “The free trade zone does not promote investments which are labor intensive and with lower pay,” he said.

The locals will also benefit from the training to be made available by companies engage in new industries, like high technology and computer, while making sure that they get higher pay than those offered outside the zone, according to the legislator.

Local support

Meanwhile, Rota Mayor Benjamin T. Manglona has thrown its support behind the proposal, citing its positive benefits like employment opportunities, lower shipping rates due to increasing “economy of scale,” as well as diversification of the economy.

“We will also put our precious and limited land resources to the highest and best use,” he told the House of Representatives in a letter. “Further, with free trade zones proliferating in the Western Pacific, we need to stay competitive.”

The joint House panel of Ways and Means and Commerce and Tourism, which is reviewing twin measures setting in motion the free trade zone proposal, has begun its deliberation.

Members will meet on Monday with the governor’s legal counsel and the subcommittee to discuss further provisions of the proposed legislation, whose passage is being rushed by lawmakers to help deal with the worst crisis to hit the Northern Marianas in years.