Under Title 19 of the U.S. Code, 19 CFR § 7.2, Guam and other insular territories of the United States are considered to be outside the U.S. customs zone, and therefore fall under provisions of the Harmonized Tariff Schedule. This status has its benefits, including more independent trade with Asia and Australia, by which we have enjoyed the availability of many familiar brands from Asia and Australia in our supermarket and convenience store shelves, from corned beef to milk tea. This status though also has negative implications to include the tariff for items manufactured in Guam and shipped to the United States mainland.
The U.S. Code stipulates a product must be composed of at least 70% in value of raw goods from within Guam to qualify for the duty-free treatment when importing to the U.S. mainland. However certain products under the Caribbean Relief Act allow certain products to be only 50% in value of raw goods from within a territory to qualify for duty-free treatment. Clearly, the percentage value of raw goods which must come from a territory to qualify for duty-free status is within the control of the Congress.
We should explore the lowering of that raw goods value through congressional legislation. A lower percentage would allow Guam to compete for the assembly of goods in the world market, as Guam was once a hub for wristwatch assembly in the Pacific. Surely if the people of Guam were able to assemble devices so delicate and fine-tuned as wristwatches, the people of Guam can assemble anything produced by the modern world.
The diversification of our economy has been one of our collective goals. A duty and tariff policy that encourages the growth of new industries on Guam can only be of greater service toward that goal. I hope that this is something all levels of government on Guam can work together on.