Why The Commonwealth Needs Duty Free Access To The U. S. Market
The Commonwealth of the Northern Mariana Islands is unique in its relationship with the United States, a relationship which eventually evolved out of the flames of World War II and a relationship entirely different from any other territory associated with the United States. While the people of the Northern Marianas are United States citizens and the American judicial system prevails it is important to realize that the Commonwealth is the only entity under the American Flag that controls its own immigration and customs.
Because of this fact, the United States immigration and customs authorities consider the Commonwealth a foreign country simply because it controls such entry. In spite of their proximity to Asia – in all of the islands' 476 years of recorded history – the only time the islands have been under the control of an Asian nation (Japan) was the thirty year period between the world wars, (1914 to 1944). For the other 400 odd years, at least until 1978 when the islands became self-governing, they were controlled by western nations, first Spain, then Germany and later by the United States under the auspices of the United Nations. Indeed, the United States still exercises control over defense and those federal laws that apply within the Commonwealth. This unique relationship between the United States Government and the Commonwealth stems from the fact that the islands were never recognized as a permanent possession of any nation since they were taken from defeated Germany by the Allied Powers during World War One. Subsequently assigned to Japan under a mandate from the League of Nations, the islands' status did not change after they were occupied by United States armed forces in 1944. Indeed, since their purchase by Germany from Spain in 1899, and their assignment to Japan for administration in 1920 by the League of Nations, the Northern Marianas had no political identity among the countries of the world. From the time of Germany's loss of the islands they were never regarded as a permanent colony within the exclusive sovereignty of any nation, except, of course, by Japan when it left the League before the outbreak of World War Two. At the conclusion of the Second World War the United States, not desiring to appear as having annexed the islands by virtue of "victor's rights", placed the islands under the supervision of the Security Council of the newly formed United Nations. As the Marianas where considered to be within a strategic area of the western Pacific they were to be overseen through the Security Council where the United States had veto power, rather than the U.N. General Assembly.
The people of the Marianas were encouraged to choose their future political status from several options. These included: selecting independence; or becoming affiliated with the United States, either through a relationship of free association or a commonwealth status based upon a negotiated agreement which later became known as the Covenant. The Covenant describes the relationship agreed upon between the people of the Northern Marianas and the United States Government. No other United States territory or insular possession has a similar relationship. Alaska, Hawaii, Puerto Rico, the Virgin Islands, American Samoa, Guam and other Pacific possessions were all acquired under circumstances far different than that of the Northern Marianas. For a nation to acquire additional territory, a government must either annex an area by force of arms or by purchase from a sovereign government.The Northern Marianas was not a permanent legal possession of Japan at the time of the war as it had only been entrusted to Japan under a mandate by a group of countries through their organization – the League of Nations. Therefore, the United States could not strip territory from defeated Japan at the conclusion of hostilities since the islands were never recognized as a permanent legal possession of Japan in the first place. The people of the Northern Marianas, by 78.8 percent of the votes cast in a plebiscite held on June 17, 1975, elected to accept a negotiated Covenant with the United States. This became U.S. Public Law 94-241 when enacted by the United States Congress and became effective on April 1, 1976, a little more than 30 years after the end of World War Two. United States citizens residing in the Commonwealth are denied the right to vote in presidential elections nor are they represented in the United States Congress by an elected representative. This is, of course, inconsistent with the fundamental premise of democracy, namely, that the right to govern rests on the assent of those governed. At any rate, in negotiating the Covenant relationship between the United States and the Northern Mariana Islands the United States agreed to permit the Northern Marianas to take advantage of certain valuable “development tools” principally: control of immigration, relief from the U. S. minimum wage and duty free entry into the United States of certain “qualified” products manufactured In the Commonwealth. The American negotiators of the nexus establishing a political relationship between the two governments may have failed to anticipate certain conflicts which could arise from the marriage. One cannot help but wonder, after the fact, that the rush for agreement to establish a political union may have been dictated principally by both military expediency (the U. S. Government is responsible for defense of the CNMI) and, the Commonwealth's own anxiousness to terminate what, at the time of negotiations, amounted to a state of political limbo for the islands. The benefits of Headnote 3(a) of the U. S. Customs Tariff Schedule allowing duty free entry into the United States of qualified products manufactured in the Northern Marianas provides the only real economic link the Commonwealth's private export sector has with the United States. Without this entry to the U. S. market it is unlikely that the two economies would have any meaningful trade connection at all – with only a one-way street of imports from the U. S. flowing to the Commonwealth. Considering the high cost of ocean shipping, it is possible that Japan could eventually replace the U. S. as a source of many supplies with the result that the Commonwealth's private sector commercial links with the States could become ever thinner. With the exception of a small number of American tourists briefly visiting the islands the only connection would be that of a rather sterile government to government bureaucratic relationship. In addition, in the early eighties ocean shippers were reluctant to call at Saipan with cargo because they had to return empty. The exports of the garment industry, benefiting from Headnote 3 (a), helped convince the carriers that they could obtain a return cargo. This had the effect of reducing inbound freight rates on imported commodities. Additionally, it aided in the diversification of the economy and provided a market for the lease of locally owned land. The CNMI needs the revenue generated by the garment industry and further needs the economic diversification the garment industry provides an economy dominated by the tourism sector and its almost entirely single market orientation, (Japan). The continued benefit of Headnote 3 (a) is essential if the CNMI is to develop light manufacturing endeavors such as: pharmaceuticals, bags and luggage, small electrical components, soap and detergents, sporting goods, toys, jewelry and several other products. No area should be dependent upon one or two major sectors within its economy for its existence and this is true of the islands of Saipan, Tinian and Rota.
There are now those within the U. S. Government that would renege on this contractual promise which is the only tool by which the Commonwealth can diversify an otherwise tourism based economy. As an individual who has spent more than 27 years involved in the process of development within these far flung islands, I have yet to meet a single Washington based official, one responsible for making policy effecting the Commonwealth, that has spent a total time in the islands exceeding 30 days. A little history never hurt anyone – but experience is a better teacher. There is an old adage, “good judgment comes from experience – experience comes from bad judgment.” And experience being what it is – it very often is a costly process. Let’s hope that the price we may have to pay for the experience gained by Washington will not be too costly when, and if, the Commonwealth’s duty free access to the U. S. market is withdrawn.