"Made in USA" Garments Coming From Controversial Island

by Kalinga Seneviratne

This year, Asian governments have repeatedly complained about poor conditions and pay for nationals toiling in the garment factories of the Commonwealth of the Northern Mariana Islands (CNMI), an island chain in the Northern Pacific.

Fed up, these governments have brought their case to Washington, which in turn is pressing the Marianas government to shape up or risk having its powers over immigration and wage- fixing stripped by the federal U.S. government.

Such a federal takeover would be a disaster for the CNMI government, for whom garments have become the biggest export industry. In the capital Saipan alone, there are more than 30 garment factories in operation.

Last week, he assured the U.S. government that he would look into allegations of maltreatment of foreign workers. He however stressed that these reports do not warrant a federal takeover.

Under a 1978 Covenant with Washington, all U.S. laws apply to the CNMI with the exception of immigration and minimum wage laws. At least a third of the population are also entitled to U.S. citizenship.

In May last year, President Bill Clinton warned Tenorio that federal "immigration, naturalization and minimum wage laws should now be applied to the Commonwealth" and that it will be implemented "in a reasonable and appropriate manner."

While this stresses the importance of decent working conditions, it may not quite be the whole picture.

Instead of just being a labor rights issue, some skeptics say, it may well be shaped by fears in the U.S. about cheap garments entering its market without restrictions -- a situation that underlines what can be a complicated linkage between labor rights and trade issues.

Indeed, the Clinton administration had gotten complaints from the U.S. garments industry about the fact that "Made in the USA" labelled garments, made by cheap and often Asian labor, are flooding the American market from the Marianas.

Last year, U.S. industry sources complained to the Clinton government that most of the factories in CNMI are owned by foreign companies, notably from China, that used foreign fabrics and were completely staffed by overseas labor.

Yet, they argued, these factories were able to sew the "Made in the USA" label onto each garment produced and export to the U.S., free from any import tariffs or quotas.

Following these allegations, a string of U.S. Congress and government officials have visited CNMI to investigate the issue.

Earlier this year, the U.S. Commission on Immigration Reform issued a report criticizing immigration procedures and policies in the Marianas.

It noted that 90 percent of private sector workers in CNMI are foreign contract workers with "few rights" and "subject to serious labor and human rights abuses." It likened the CNMI immigration policies to that of Kuwait.

After visiting the islands in March, Alan Stayman, director of the Washington-based Office of Insular Affairs in the interior department, said most contract workers were ill-paid, and most were not paid at all. The U.S. minimum wages did not apply.

Stayman pointed out that lack of immigration and minimum wage controls, coupled with protection against U.S. tariff barriers, has allowed the Asian garments industry to transplant itself in the CNMI to produce $820 million worth of clothes each year, for export to the U.S. market.

But for Tenorio and his administration, it is a different story.

The garments industry, along with tourism which also employs mainly Asian labor, is the Marianas' lifeline.

And for them, it does not help that the industry is coming under fire at a time when the Asian financial crisis has dealt a heavy blow to both the garments and tourism sectors.

"Saipan factories are facing very real competition now from Asian manufacturers," said Richard Pierce, executive director of the Saipan Garments Manufacturers Association (SGMA) in an interview with a local newspaper. "Those foreign factories are actually delivering better prices," he added.

Experts say the CNMI garment industry has become uncompetitive mainly because it trades in the U.S. dollar and U.S. imports from Asia has soared due to the stronger dollar.

In recent months Tenorio and U.S. officials have been bickering over proposed legislation in the U.S. Congress to limit the stay of non-resident workers in the islands to three years.

According to some analysts, this is fuelled by U.S. fears that long-stay migrant workers will give birth to children who will become eligible for American citizenship.

But the U.S. government argues it is designed to stem immigration scams. For instance, Bangladeshis and Sri Lankans have been duped into parting with between $5,000-$10,000 by agents who promised them long-term employment in the Marianas, only to find that jobs or the wages did not exist when they arrived in Saipan.

In any case, Tenorio argues that guest workers remain the backbone of the Marianas' workforce. "There's no question that we need non-resident workers and the non-resident workers have been very helpful for us," he told the Saipan Tribune.

The Saipan Chamber of Commerce says the proposed law would be an unnecessary burden on business at a time when there is a serious downturn in all sectors.

But American legislators say the bill would address a concern in Washington about the growing numbers of foreign workers and to prevent them from living in the CNMI as disenfranchised residents whose children become U.S. citizens and the Native people becoming a minority in their own land.

A 1995 census shows that the indigenous peoples of CNMI of Chamorro and Carolinian descent make up 34.3 percent of the population. Filipinos account for 33.75 percent and Chinese, 11.6 percent of the total.