Hafa adai,
I was looking through some old documents at home and found a clipping of a Pacific Daily News editorial that was published 38 years ago. In it, Pipe Dreams’ Joe Murphy paints a story of the struggle with the federal government and some policies that, to this day, act as an anchor rather than serve as a platform from which Guam’s economy could be launched.
As we celebrate the island’s liberation, and as we continue to fight on issues such as H2B and fair & equal treatment on Medicare & Medicaid, I thought I’d share this article with my fellow Guamanians. I hope you find it as interesting a read as I did. I believe there are lessons we can learn from this: We must continue to do what we can to build our economy on our own. While we must work with the federal government, it is clear that it is up to us to find solutions and push hard for them.
– Eddie
U.S. keeps pulling rug from under Guam
Pacific Daily News, Tuesday, January 9, 1979
Guam is never going to develop any economy of its own unless the United States government – which includes Congress – gets off Guam’s case when it comes to Guam exports into the mainland.
We can’t help but become indignant at the latest effrontery to Guam over the assembly of watches and the setting of quotas for those watches.
The United States can’t have it both ways. Either it has to continue to support the island through grants, loans and aid for the next hundred years, or it will allow Guam to develop its own manufacturing and industry under laws previously established by Congress.
Last week District Court Judge Cristobal Duenas ordered a temporary halt to imposing a new watch quota aimed in effect, at stopping the assembly of watches with Soviet-made parts on Guam and the Virgin Islands.
The temporary order was issued after a suit was filed Dec. 29 on behalf of the Jerlian Watch Co., a registered Guam company that manufactures watches on Guam from Soviet-made parts.
Three Virgin Island companies, including Cornavin, Inc., Waltham Watch Co. and Sussex Watch Co. have joined in the suit with Jerlian.
Duenas’s ruling was unprecedented on Guam and could serve notice on the United States that this island is not going to sit back and calmly accept decisions made through lobbyists and by Congressmen who are thinking only about themselves and their screaming constituents.
Guam, too, has rights. These rights were clearly established by Congress and should not be trampled on every time a congressman gets a pea-brained idea passed on by businessmen in his district.
Attorney Howard Trapp, on behalf of the watch manufacturers, said he and the U.S. Attorney’s Office have agreed to have a hearing on Jan. 18 on whether a permanent injunction should be imposed to halt the rule until a decision is reached after a trial.
The new quota rule, imposed by the U.S. Department of Commerce and the U.S. Department of Interior, was to have taken effect on Jan. 1, 1979.
The new rules states among other things that a company must use at least 26 components in the assembly of the watch movement to qualify for duty free status. The requirement of those numbers of components would push the cost of the watch with Soviet-made parts out of competition with other American watches, Trapp said.
Trapp said the new rule is an attempt by American manufacturers to eliminate competition from the territories. Jerlian is the only company on Guam that manufactures watches from Soviet-made parts, a department of Commerce spokesman said.
This all takes us back again to a report put out by then Gov. Carlton Skinner, Guam’s first civilian governor. Skinner advocated that a variety of businesses should be interested in relocating in Guam way back in 1951, because of the free port status and because items exported from Guam would be duty free, provided that a certain percentage of the value of the watch was added on Guam.
Skinner suggested that manufacturers of such things as embroidery good, woolen fabrics, bamboo items, ceramics and chinaware, oil, rattan furniture, glassware, rugs, curios, artwork and even oil products could take advantage of the duty free status of Guam and set up production plants on Guam. He felt that this could make Guam the “Hong Kong” of the Western Pacific, and go a long ways towards making Guam self-sufficient, so it wouldn’t have to continually rely on aid from Uncle Sam.
We mention Skinner’s plan because of one paragraph which read: “When I have mentioned these advantages (duty free status) particularly, the ones based on Guam’s free port, I have frequently been told ‘Oh, that would never last. As soon as any company started to use it, the competitors would get the law changed.’”
Skinner said that was untrue and unsound. He said this provision by which Guam is allowed to choose its own status as far as customs is concerned and by which the products of Guam enter the United States duty free is a deliberate and planned nation policy. It follows the pattern long-established in the Virgin Islands and in Puerto Rico.
Unfortunately, Skinner was wrong, and the businessmen who scoffed at the plan were right.
Guam’s free port and duty free status is working out exactly that way. Ten years ago Guam had as many as six watch manufacturers, all hiring local people. Then came the howls from U.S. watch firms, and then came the quotas established for Guam which had the effect of closing down the watch industry on Guam.
Later, several firms have tried to set up textile or clothing manufacturing on Guam to take advantage of these laws.
And, zap, along came more lobbyists, and more restrictions on what can be imported into the United States along with restrictions on bringing in people to train the Guam workers.
What breaks us up is that the new quota rule on watches for Guam was imposed by the U.S. Department of Commerce and the U.S. Department of Interior. Isn’t Interior supposed to be looking out for our interests? How come they are taking an adversary stand to Guam?
We say that Gov. Calvo should appoint a high level committee, through the Guam Department of Commerce and the Guam Economic Development Authority, to look into exactly what can and cannot be exported to the United States. They should look into the legality of the original watch quota.
We’re glad that Judge Duenas has ordered the temporary halt to the new ban that could put our watch company out of business, throwing more Guamanians out of work. We hope that the hearing on Jan. 18 will bring out, for once and for all, the whole complex system of duty free status between Guam and the United States.
Frankly, we’re tired of having the rug jerked out from under Guam every time it tries to establish business firms here. Does the United States want us to be forever at the trough, begging for handouts? JCM

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