Economy of The Northern Mariana Islands - Textile Industry

Textile Industry

Garment production had until recently been the fastest growing industry with employment of 12,000 mostly Chinese workers and shipments of $1 billion to the United States in 1998 under duty and quota exemptions. This production is extremely controversial because goods produced in the North Marianas can be labelled "Made in the U.S.A.", although not all American labor laws apply to the commonwealth leading to what critics charge as "sweatshop conditions" for imported, mostly Asian, workers. Among other companies, the teen clothing store Abercrombie & Fitch produces some of their clothing in the Northern Marianas and then sells them for high prices.

The garment industry is changing, though, and many of the garment factories are closing due to the lifting of WTO trade restrictions on Chinese imports. The industry was initially established in the Commonwealth because some U.S. labor and immigration laws do not apply within the CNMI — for example, the CNMI's minimum wage rate of $3.05 per hour (for most employment positions) is lower than the federal rate, which applies to most other areas of the United States. Additionally, the CNMI retains local control over customs and immigration enforcement, unlike in Guam.

In 2004 — and in response to a long and expensive class action lawsuit brought by garment workers against various clothing manufacturers — a Garment Oversight Board, aimed at protecting workers' rights, was created. These actions have reportedly resulted in improved conditions since the turn of the 20th to 21st century.