Palacios writes to Biden to open consultation on NMI-US Covenant; request follows news of Hyatt closure

Gov. Arnold I. Palacios is invoking a section of the Section 902 of the Covenant to Establish the Commonwealth of the Northern Mariana Islands in Political Union with the United States of America in the hopes of getting assistance with financial challenges and also addressing policies that the local government says hampers the NMI’s efforts to restore its economy.

The governor hopes to discuss cabotage restrictions among other concerns under three priorities during the consultations: 1) direct financial assistance under Section 702 of the Covenant; 2) tourism and transportation infrastructure; and 3) access to skilled labor.

Palacios wrote to the president following an announcement that Hyatt Recency Saipan will be closing permanently.

The Hyatt's closure has raised concerns with the business and industry leaders in the Hotel Association of the Northern Mariana Islands in a press release called it a “tremendous loss to The Marianas and its local economy.”  HANMI representatives are calling for the government to take action to help other businesses and the economy. The HANMI letter follows the text of the governor’s letter below. mbj


April 26, 2024

The Honorable Joseph R. Biden Jr.
President of the United States
The White House
1600 Pennsylvania Avenue,
N.W. Washington, D.C. 20500

Dear Mr. President:
I write to initiate consultations between the governments of the Commonwealth of the Northern Mariana Islands (CNMI) and the United States of America pursuant to Section 902 of the Covenant to Establish the Commonwealth of the Northern Mariana Islands in Political Union with the United States of America (Covenant).

Section 902 of the Covenant provides that the Government of the United States and the Government of the Northern Mariana Islands "will designate special representatives to meet and consider in good faith such issues affecting the relationship between the Northern Mariana Islands and the United States as may be designated by either Government and to make a report and recommendations with respect thereto."

For this round of consultations, the CNMI proposes to engage with the United States Government on three priority issues:
1) direct financial assistance under Section 702 of the Covenant;
2) tourism and transportation infrastructure; and
3) access to skilled labor.

Direct Financial Assistance
Section 701 of the Covenant between the CNMI and the United States reflects the aspirations of the people of the Northern Marianas to join the American political family, and the commitment of the United States to assist the Commonwealth government in providing a progressively higher standard of living for its citizens. The primary vehicle for achieving this commitment was Section 702, which once provided nearly $28 million annually in direct financial assistance to the Commonwealth government for economic development. Unfortunately, U.S. Public Law 104-134 redistributed funds intended for the Commonwealth to other insular jurisdictions. Fully restoring 702 funds to the CNMI and adjusting for inflation would go a long way towards shoring up public services and providing relief to economically distressed citizens and small businesses today. The CNMI urgently seeks direct and expanded financial assistance from the United States government, and flexibility to apply those funds to capital improvements, government operations, and economic relief programs.

Tourism and Transportation Infrastructure
Here on the frontlines of the Indo-Pacific, economic vitality and national security are inseparable. Early on in my administration, I announced that the CNMI would pivot away from overreliance on tourism and investment from the People’s Republic of China (PRC) to more sustainable markets in allied democratic jurisdictions like Japan, the Republic of Korea, and the Republic of China (Taiwan). We need the support of our federal partners to accomplish this pivot. Our efforts to revitalize our economy and especially our tourism industry in the post-Covid era, however, are hampered by inadequate infrastructure at our airports and seaports, and limited air and freight service to and from the islands. The CNMI seeks the assistance of the United States government in upgrading our transportation infrastructure, securing new and expanded air service options, and relaxing cabotage restrictions to facilitate air service competition.  

Access to Skilled Labor
The CNMI is facing an acute shortage of skilled workers in construction and other key sectors, imperiling timely completion of critical infrastructure projects. Many of these projects are funded by federal program sin defense, disaster recovery and economy resiliency. Slow processing times affecting the Commonwealth-only Transitional Worker (CW) visa program and inflexible restrictions in the H visa program exacerbate our already-challenging workforce issues and curtail our ability to access the pool of skilled workers available in the region. Meanwhile, the CNMI’s exclusion from Wagner-Peyser programs and limited resources to support a robust apprenticeship program impair our ability to develop our skilled workforce locally. The CNMI seeks the support of the Untied States government in affording greater flexibility and efficiency in visa processing for skilled labor in the Marianas and parity in access to the full spectrum of workforce development and training programs available to other communities across the nation.

Proud and grateful Americans
The people of the Northern Marianas are proud Americans. We support the position and interests of our nation in the Indo-Pacific region, and we appreciate the partnership of the United States government inour shared endeavors. We look forward to the United States appointing a Special Representative so that the 902 consultation process can begin. My administration is ready to work with you and your Special Representative in furtherance of our mutual goal to improve the lives of people of the Northern Marianas, consistent with our Covenant.

Sincerely,
Arnold I. Palacios.
Governor

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