By Haidee V. Eugenio
Variety Assistant Editor

SAIPAN’S garment industry sales reached $23.4 million in October, a 37 percent drop from the same month last year, the latest Department of Finance data shows, as a result of garment factory closures and a reduction in orders from abroad.
The garment industry continues to shrink — from 34 factories in 2000 to only 14 today.
Compared to the month of September, the latest monthly sales were up by 10 percent.
From the $23.4 million in garment sales, the government collected $867,467 in user fees in October, a 37 percent drop from the same month 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.
Richard A. Pierce, the governor’s special assistant for trade relations and economic affairs, said sales are expected to gradually increase through the beginning of the year as winter and spring lines are completed.
Sales will go down again in February, he added.
Pierce said “all factories have indicated they will close with the second minimum wage increase installment in June 2008.”
By that time, the CNMI’s current minimum wage of $3.55 an hour will be $4.05 as a result of the federal wage law.
“The CNMI administration has gone to great lengths to make sure both the General Accountability Office and the U.S. Department of Labor know this as an absolute fact,” Pierce said.
GAO interviewed all factory representatives in September, while the CNMI Department of Finance provided data showing that the factories still provide 13 percent of direct CNMI revenue, representing approximately 20 percent of total government collections.
“As far as what remains of the CNMI’s garment industry, it’s going to boil down to a matter of political will, and/or political disfavor,” Pierce said.
Since January 2005 when the World Trade Organization liberalized trade rules allowing Third World countries to export more of their cheaper garment products to the United States, factories on Saipan have been shutting down.