May 25, 2001


CNMI Legislation Amounts to Economic Sanctions on a U.S. Possession

4.75 Million Pounds of Rice Destined for Burial, not for Poor

CNMI Legislation Amounts to Economic Sanctions on a U.S. Possession

Legislation providing for a federal takeover of the immigration authority of the Commonwealth of the Northern Marianas Islands (CNMI), a U.S. possession near Guam, is designed to shut down the Islands’ garment industry and should be understood as such.

The legislation, S. 507, has been proposed by Senator Frank Murkowski (R-AK), Chairman of the Senate Energy and Commerce Committee, where the bill is under consideration. The bill has yet to be marked up.

The legislation marks a attempt to continue the Clinton Administration’s unfortunte hostile attitude toward the expansion of private business in the CNMI. The Bush Administration should reverse the Clinton policy and allow the CNMI’s economic growth to continue.

Under the 1976 U.S.-CNMI agreement, known as the Covenant, under which the CNMI voluntarily joined the United States, the U.S. government agreed that local immigration policies would remain under the jurisdiction of the CNMI government. The Murkowski legislation would unilaterally alter the contract.

Immigrants to the CNMI do not have the right to immigrate to the U.S. mainland, so mainland immigration is unaffected by the legislation.

Because of free market reforms first begun 25 years ago, the CNMI is enjoying an economic boom so robust, thousands of guest workers are needed to fill vacant jobs.

A recent GAO report says phasing out guest workers on the CNMI would devastate the CNMI economy. According to analyst Peter Ferrara, writing in the March 21 Washington Times, this report echoes an earlier internal Interior Department report’s conclusion that if immigration on the islands were federalized and guest workers phased out, "the economy of the Marianas would be severely damaged, and the standard of living of the U.S. citizens residing there would suffer tremendously. Major existing industries could virtually collapse, leaving few sources of export earnings. The economy would be sent into a catastrophic contraction."

Economic prosperity made possible by both the free market reforms and the guest workers provides revenues funding 87 percent of the CNMI government’s budget. This, says Ferrara, is not only higher than any other U.S. territory, some of which are mostly financed with federal funds, but also higher than that of any U.S. mainland state or local government.

The median household income in the CNMI has soared from $8,900 in 1980 to $30,700 in 1999, adds Ferrara.

CNMI working conditions and immigration procedures have all been investigated by federal agencies, including OSHA, the Customs Service and GAO, and have received passing grades. OSHA administrator Frank Strasheim says of the CNMI’s working conditions: "They’re well on their way to becoming a model for the rest of the world."

U.S. mainland-based garment manufacturers have long called for an end to the CNMI’s right to employ guest workers, arguing that lower wage rates in the Far East Pacific region make it harder for mainland-based garment firms to compete with the CNMI. Garments manufactured in the CNMI account for one half of 1 percent of U.S. garment sales.

The Murkowski legislation essentially would impose economic sanctions on a small U.S. possession and U.S. citizens, simply because of its free market success.

-by Amy Ridenour

4.75 Million Pounds of Rice Destined for Burial, not for Poor

An unfortunate, perhaps even tragic story appeared in the May 21 Houston Chronicle: 4.75 million pounds of rice that could have been used to feed starving people is being destroyed by the Aventis Corporation. The destruction has been ordered as a defensive measure after last year’s incident in which unapproved bioengineered corn accidentally appeared in Taco Bell taco shells.

The rice, dubbed "LibertyLink," because it is resistant to Liberty pesticide, has been granted approval by the U.S. Food and Drug Administration and Department of Agriculture and is likely to receive Environmental Protection Agency approval shortly. If stored until EPA approval is received, the rice could be distributed as food.

Last year environmental groups and some network news anchors, including CBS’s Dan Rather, overhyped the Taco Bell story (See National Policy Analysis #311 "Print Trumps Broadcast Media in Accurate Reporting of Bioengineered Corn Recall" at for details). The result was a public relations disaster for the biotechnology industry, although the risk to humans was nearly nonexistent.

The Chronicle quotes a Texas farmer agreeing with the policy: "If I was Adventis, I would be doing exactly the same thing. They’ve got to be extremely cautious with what they’re doing."

He’s right. 4.75 million pounds of rice isn’t worth a PR disaster that could shut down an entire industry, especially since agricultural biotechnology holds such promise for feeding the Third World.

But it is a shame, nonetheless, that starving people will never receive this rice.

-by Amy Ridenour

The National Center for Public Policy Research is a communications and research foundation supportive of a strong national defense and dedicated to providing free market solutions to today’s public policy problems. We believe that the principles of a free market, individual liberty and personal responsibility provide the greatest hope for meeting the challenges facing America in the 21st century.