By Haidee V. Eugenio
Variety Assistant Editor

GARMENT sales dropped by 23 percent or $8.65 million in March compared to the same month last year with the closure of at least 14 garment factories on Saipan since the lifting of the world trade quota in January 2005, Variety learned yesterday.
From $37.36 million in March 2006, local garment industry sales reached only $28.71 million last month, the latest government data shows.
The Division of Customs Services collected $1,060,252.90 in user fees last month, a 23 percent drop from $1,382,262.85 last year.
The user fees are the taxes paid by businesses on locally manufactured and finished garment products. It is equivalent to 3.7 percent of the garment sales.
Local garment industry sales have been on a steady decline since the World Trade Organization liberalized trade rules that now allow Third World countries to export more of their cheap garment products to the U.S.
Testimony submitted recently to the U.S. House Subcommittee on Insular Affairs mentioned the extent of the CNMI garment industry’s decline.
“Trends in international trade agreements have left our apparel industry less competitive than those in countries such as China, Vietnam and India,” Washington Rep. Pete A. Tenorio said.
In 2000, according to Tenorio, Saipan had 34 operating factories.
“By the end of this month, we will have only 13, and I expect two or three more will close in the near future,” he said.
Saipan factories have been closing due to lack of orders from U.S. retailers, but the Fitial administration continues to ask Congress for an amendment of Headnote 3(a) to allow Saipan manufacturers to use more imported raw materials for their products.
Garment industry sales dropped by $170 million or 26 percent — from $662.7 million in calendar year 2005 to $492.16 million in 2006.
The industry’s peak sales of over $1 billion came in 1999 and 2000.
Garment manufacturers are exempted from paying the business gross revenue tax.