Trade measures spark hope for SGMA

The Saipan Garment Manufacturers Association yesterday welcomed recent developments in the United States and China, which would somehow ease the impact of the lifting of quota restrictions on apparel entering the United States beginning Jan. 1, 2005.

SGMA executive director Richard Pierce said the Bush administration’s proposed 30-day embargo on certain garment products would give the government time to consider petitions aimed at limiting China’s growth rate to 7.5 percent annually, once quota restrictions on garments entering the United States—the No. 1 market for apparel in the world—are lifted.

Pierce said the proposed rule, which was reportedly published in the federal register last Monday, would also give Saipan manufacturers more time regarding their clamor for the reduction of value-added requirement on garment exports to the United States.

“It gives us more time to get our work done,” Pierce said. Once the U.S. Tariff Code is amended to reflect the necessary change in the value-added requirement—and the petitions to limit China’s growth rate are granted—Pierce said Saipan’s garment industry “will look a lot better today.”

Pierce also lauded China’s self-restraint efforts, amid reports that it has decided to impose duties on textile and apparel exports.

“We’re pleased with China’s exercise of self-restraint,” Pierce said. “We want them to be responsible and not take away businesses from small countries.”

He said Saipan’s garment industry similarly exercised self-restraint in the past to prevent market disruption in the U.S. domestic market.

As regards the request for the Tariff Code amendment, Pierce said no congressional measure has been introduced yet, but he added that talks have been going on with some trade firms in Washington, D.C.

Local government officials and business groups rallied behind the local garment industry’s clamor for help in seeking a congressional amendment to the U.S. Tariff Code, which would reduce the value-added requirement from 50 percent to 30 percent—or increase the maximum allowable foreign content material in garment exports from the CNMI to the United States to 70 percent.

Currently, the U.S. Tariff Code requires that 50 percent of the value of the garment has to be added locally by transformation, in terms of additional labor, packaging or other overhead costs, so that garment products coming from the Commonwealth could enter the United States duty-free.