To Senate President Adriano and members

On behalf of the board members and general membership of the Saipan Garment Manufacturers Association, I want to personally thank the you, and the CNMI Senate members, for your recently adopted Senate Resolution No. 14-32, requesting of Gov. Juan N. Babauta, CNMI Resident Rep. Pete A. Tenorio and Insular Affair’s David Cohen in seeking assistance to amend General Note 3(a)(iv)(A).

SGMA has stated on numerous occasions in the past that this single act could very well sustain our apparel industry through the next phase of intense global competitiveness when foreign country quotas are eliminated on Jan. 1, 2005.

With Resolution No. 14-32, SGMA believes the CNMI Senate is addressing something within our ability to effectuate change in Saipan factory viability, where it seems all other economic variables are outside our control.

Unlike the changing worldwide global quota system, where the New Year brings new rules, or, for that matter, world global competitiveness, changing the value-added requirement under General Note 3(a), as the Senate has resolved, is something we can do with the help of the United States of America.

Unlike past critics’ concerns of jeopardizing American jobs in the domestic apparel industry, with a change in the value-added requirement, once again, as stated in Resolution No. 14-32, the CNMI as a part of America, would regain some of its lost advantage over truly foreign countries.

The CNMI House of Representatives, in a similarly adopted House Resolution, the Governor’s Strategic Economic Development Council and the Saipan Chamber of Commerce all have entered support to amend what is now an essentially restrictive value-added requirement for entry into the U.S. domestic market for apparel assembled in the CNMI from cut pieces, as U.S. federal trade offices have already stated they will allow cut-piece assembly in the insular area of the Commonwealth.

All we need to do now is to allow our island manufacturers to utilize what the federal government has already allowed in this type of manufacturing, by putting in place the necessary economic formula facilitating the CNMI’s ability to provide its own local industry the ability to perform.

The Senate is 100 percent correct in that the change in the value-added requirement would “translate into corresponding increase(s) in direct and indirect government revenues.”

With the factories’ cutting rooms turning into sewing and packaging rooms, when, as a result of amending the value-added requirement, we are better able to meet buyer demands in cost-competitiveness, there will be an increase in CNMI user fee payments and spending in the CNMI.

SGMA sincerely appreciates your action in the adoption of Senate Resolution No. 14-32 and we stand ready to assist the CNMI in any way we can in attaining this goal to sustain our industry and our host’s CNMI economic future.

Richard A. Pierce
SGMA executive director
Middle Road, Saipan