‘Chances for General Note 3(a) amendment almost nil’

Nearing the end of the 109th U.S. Congressional session, the Commonwealth of the Northern Mariana Islands’ chances to amend General Note 3(a)(iv)(A) in the U.S. Congress in 2005 are almost nonexistent.

The CNMI and other insular area political leaders have been actively seeking federal approval to change the value-added requirement under General Note 3(a)(iv)(A), which would preserve their rapidly declining local economies, including Saipan’s apparel industry, by allowing factories more affordable entry into the U.S. retail marketplace.

This move would serve the CNMI economy by protecting local employment, tax revenue and business for local companies serving the industry at a time when the CNMI faces economic uncertainty as tourist arrivals drop and factory orders shift to mainland China.

The Governor’s special assistant for trade relations, Richard A. Pierce, remained optimistic that the language contained in S. 1954, The Insular Possessions Act of 2005, to amend the CNMI’s tariff privilege would eventually pass the U.S. Congress and be signed into law by the Bush administration.

Pierce said, “The groundwork has been completed by this outgoing administration, and I have the utmost confidence that this will remain a priority with the incoming CNMI administration and Legislative leadership.”

“We received notification today that three of the U.S. insular areas’ delegates, Congressman Eni F. H. Faleomavaega of American Samoa, Congresswoman Madeleine Z. Bordallo from Guam and Congresswoman Donna M. Christensen of the U.S. Virgin Islands gave support for the bill to amend the tariff law by sending a jointly signed letter to Rep. William M. Thomas, Chairman of the U.S. House of Representatives Committee on Ways & Means,” added Pierce.

“Our options are extremely limited within what remains of this session, but there are many that afford us an opportunity as early as February or March next year. The miscellaneous tariff and trade bill, the U.S. reconciliation package, even an attempt to provide trade relief to Haiti would offer the insular areas a vehicle. All these options are realistic and available, and have been listed as possibilities by those stating the CNMI has a position of strong merit,” Pierce stated.

The World Trade Organization will convene in Hong Kong this week to address global trade and economic concerns. The WTO’s lifting of quota restrictions on its Member country exports to the U.S. is generally accepted as a major factor in limiting Saipan factory access to the U.S. marketplace.

On the other hand, industry leaders and CNMI government leaders are aware of the industry’s vulnerability in competing with low cost production countries in Asia, acknowledge that the amendment of General Note 3(a)(iv)(A) would make a bigger difference in keeping orders in Saipan than the recently signed bilateral trade agreement between the U.S. and China limiting China exports to the U.S. in response to the initial lifting of quotas by the WTO January 1, 2005 change in practice.

“I cannot stress enough that we must get this done in the U.S. Congress, despite what stands in our way politically. If Congress cannot find a way to allow for this change to protect our economy, when bi-partisan support for its passage has been evidenced, then they must inevitably accept responsibility for not having done so. I hate to be so blunt, but we have to be,” Pierce concluded. (PR)