Authored by Senate Vice President Jude U. Hofschneider, R-Tinian, Senate Resolution 17-39, blames the federal government for the demise of the local garment industry and the loss of local control over immigration.
A copy of the resolution, which reflects the governor’s position on the issue, was sent by this reporter to Sablan who was on his way to Washington, D.C. yesterday.
According to S.R. 17-39, the CNMI economy used to be in good shape until the U.S. agreed to change tariff rules under the World Trade Organization which caused the Saipan factories to lose their competitive advantage.
Starting in 2005, the factories here had to compete with manufacturers from Third World nations that had lower labor and operational costs.
Since then, all of the local factories have either shut down or relocated.
The Senate resolution also cited a study supposedly commissioned by the Office of Insular Affairs in 1999 that warned against any changes in the CNMI immigration system.
A further drop in the number of nonresident workers, the resolution stated, could cause a decrease in the CNMI’s gross domestic product by up to 98 percent.
Hofschneider cited the General Accounting Office estimate that if the 20,000 guest worker population was reduced either by 95 percent, 40 percent or 15 percent in 2007, it could pull down the CNMI’s GDP by 73 percent, 85 percent and 98 percent respectively by 2021.
His resolution stated that the federalization of minimum wage here was “based in part on the discredited analysis that foreign labor prevented employment in the U.S. citizen population.”
These events caused the CNMI’s business gross revenues to go down from $2.6 billion in 1997 to approximately $1 billion in 2009 — a drop of about 59 percent, the resolution stated.
On May 5, 2010, the resolution noted, the Bureau of Economic Analysis released estimates showing that from 2002 to 2007, the islands’ real GDP decreased at an average annual rate of 4.2 percent.
However, the resolution added, granting guest workers improved status as recommended by the U.S. Department to the Interior “will create new entitlements for guest workers and responsibilities on behalf of the CNMI government.”
All these changes, the resolution said, have had a “devastating effect” on the CNMI economy and on the real wages of U.S. citizens in the commonwealth.
Article 701 of the Covenant, according to the resolution, mandates the federal to assist the CNMI government in its efforts to achieve a progressively higher standard of living for its people as part of the American economic community.
The resolution said the federal government failed to meet this obligation.
Until the federal government realizes its obligations pursuant to the Covenant, the health and welfare of the CNMI people are in jeopardy, the resolution added.
