USA: Starkist and Tri-marine to benefit from government owned near-shore cold storage facilty?

Some media have reported that Governor Togiola Tulafono of American Samoa is seeking to make available to Tri Marine International and to Starkist a 2,400 tonnes cold storage freeze facility, to be located in the Department of Port Administration in the port area. The local fishing fleet would also benefit from this facility.

Also according to press reports Governor Togiola is seeking federal financial assistance to finance the project.

Here a few links on the subject:

http://samoanews.com/viewstory.php?storyid=24775&edition=1300788000

http://www.samoanewsonline.com/publicviewstory.php?storyid=27119&newspaperid=189

USA: still more subsidies for jobs in Samoa's tuna processing industry

Readers of this blog have surely noticed that I have following developments on the subsidies provided by the US to the tuna canning industry in American Samoa.

Well, the saga continues. According to Samoa News Governor Togiola Tulafono has signed the “tax exemption certificate” for StarKist Samoa. This exemption is from American Samoa’s taxes and it is granted by the Governor of American Samoa on some or all taxes (except for individual income tax) forup to 10 years for the establishment or expansion of qualifying industrial or business enterprises under American Samoa’s “Industrial Incentives Act”.

Also according to the press there were some strings attached to the cerificate, in particular in terms of jobs.

Note that this exemption adds to postponement with for one year, by the U.S. Congress, of federally mandated minimum wage increases, and to extension the “30A” tax benefit for another two years. I will discuss this 30A tax benefit in another post.

Here is the link to the article on this issue in Samoa News.

http://www.samoanews.com/viewstory.php?storyid=22919&edition=1295949600

USA: (more) subsidies to the processing industry - tuna canneries in American Samoa

More "life-support" measures for the ailing tuna canning industry in American Samoa.

Hereunder a copy a press release by the American Samoa Government announcing President Obama's decision to delay for two years the federally mandated minimum wage increase.

Published on American Samoa Government (http://americansamoa.gov)

Home > President Obama signs H.R. 3940 to delay American Samoa minimum wage increase for two years

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President Obama signs H.R. 3940 to delay American Samoa minimum wage increase for two years

Created 09/30/2010 - 15:41

Submitted by Newsroom on Thu, 09/30/2010 - 15:41

Announcement

(UTULEI: Thursday, September 30, 2010) –Governor Togiola Tulafono today expressed his sincere gratitude to President Barack Obama for signing legislation that will delay the minimum wage increase scheduled to take effect in American Samoa for 2010 and 2011.

Governor Togiola said the delay in minimum wage hike, through H.R. 3940, is a much-needed blessing for the Territory.

“We have truly been spared another disaster and this hold on the minimum wage increase, even if it’s for only two years, will allow us time to work with this very important issue,” said Governor Togiola. “I am very grateful to President Obama for his favorable consideration and expeditious action. When I received the great news this afternoon, I breathed a huge sigh of relief, and thanked God for His direction and help. The minimum wage issue has made it impossible to attract investments because of the uncertainty it has created. I truly welcome this two-year suspension, but it is not the ultimate solution we need.”

Governor Togiola said there are so many hardworking and caring people to thank for the wonderful news for American Samoa.

“It is important to give credit where it is due. I want to thank Senator Daniel Inouye of Hawaii for his continuing support of American Samoa and helping to direct our attention to issues that we can address effectively to help our own cause. I wish to also express my thanks to our Congressman Faleomavaega Eni for his role in keeping track of this situation and asking the Senate and the House memberships for this relief. I look forward to our efforts in working with him for a permanent solution to our minimum wage to propose in the future.”

Governor Togiola also thanked U.S. senators and representatives and their respective staffs for their support in the successful passage of this very important federal legislation for American Samoa.

“This great news is also giving me hope that we will be able to work with Congress, on both sides of the aisle, to forge a permanent solution to the wage issues as well as our economic development needs. If we do not have a permanent solution for this issue, it will continue to be a major set back for near future developments. We need a permanent solution that makes sense for us and will help us effect more effective economic development,” said Governor Togiola. “I wish to recognize with gratitude and appreciation the special understanding given to my plea to U.S. Sen. Jim DeMint (R-SC) and his staff. I have never met the senator, but the good relations that my Washington staff have with him and his staff have enabled us to appeal to him for help, and he was gracious in his response and assurances.”

Governor Togiola gave thanks to the White House staff for their support in always being helpful; and also to his attorney and staff in Washington D.C. for the great assistance and diligence in pursuing Congressional help to achieve success in this matter.

“I wish to also thank the Fono for their support and I know that our people here in American Samoa have also been praying for relief, and God has answered us favorably. We give thanks to God for His guiding hand in these endeavors,” said Governor Togiola. “We have truly been spared another disaster, so now we have a lot of work to do in the next two years to ensure that this issue is resolved in the best interest of our people and our businesses.”

---americansamoa.gov---

Announcement

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Source URL:

http://americansamoa.gov/news/2010/president-obama-signs-hr-3940-delay-american-samoa-minimum-wage-increase-two-years

USA: USD 18 million federal subsidies underway for American Samoa (and its tuna cannery)

American Samoa is getting a USD 18 million money transfer as part of the efforts of the local government to keep alive StarKist Samoa.

I copy here under the passage of the bill H.R. 4213 “The American Jobs and Closing Tax Loopholes Act of 2010” explaining the rationale for the transfer:

"American Samoa economic development support. Existing possessions credit corporations with active business operations in American Samoa were allowed an economic development tax credit to offset their U.S. tax liability on income earned in American Samoa from active business operations. This credit was based on the corporation’s employment and capital investment in American Samoa. As a result of the economic downturn, those domestic corporations have been unable to utilize the economic development credit. The bill would provide a payment to the American Samoa Government for stimulating economic development in American Samoa in an amount equal to the cost of the economic development credit. This proposal is estimated to cost $18 million over 10 years."

Here is the link to the document:

http://www.rules.house.gov/111/LegText/111_hr4213_summary.pdf

And here is an extract of the press realease of 20 May 2010 by Congressman Faleomavaega in which he clearly states his views on how the money should be used.

“Because StarKist would have been entitled to 30A tax credits worth up to $18M if it had been operating at a profit, the money we have now been able to set aside as a direct payment to ASG is intended to be used to put our tuna cannery workers back to work at StarKist Samoa. This is why I will be entering in to discussions with the U.S. Department of Treasury, ASG and the Fono to make sure the funds are used for their intended purposes.”

“Also, to be clear, the entire $18M will be available in FY2010, if H.R. 4213 is signed into law. If signed into law, this will be the good news we have been waiting for as it will provide ASG with the means it needs to help StarKist until we can put a more long-term solution in place.”

“Again, I thank my colleagues in the House and Senate for their strong show of support, and I look forward to working hand-in-hand with Governor Togiola and our Fono leaders and members as we do all we can do to save our tuna industry which is our largest private sector employer,” Faleomavaega concluded.

This is the link to the press release by Congress Faleomavaega:

http://www.house.gov/apps/list/press/as00_faleomavaega/Housewaysandmeansandsenatefinancetaxcredit.html

USA: Congress discussing a bill on subsidies to the fisheries industry (2)

In this post I will comment on some of the written statements presented by witnesses at the hearing.

I will start with the statement by Mr. Nikolao Pula, Director, Office of Insular Affairs, Department of the Interior. When reading Mr. Pula’s statement I thought that, when touching WTO issues, his intervention could be summarized as follows: “Coordination between U.S. agencies works!” and “How to avoid the (ugly?) word subsidies”.

I copy here the relevant passages of his statement:

In the introduction Mr Pula said:

“Also, the United States is working to eliminate practices in ongoing World Trade Organization (WTO) negotiations that have for decades let to over-capacity and over-fishing, particularly with regard to the build-up of foreign fishing fleets. This legislation could have implications for that important effort.”

And here is what he stated in the conclusion:

“The Administration is supportive of efforts to strengthen the economy of American Samoa, but has several concerns regarding the implementation of H.R. 3583. First, the Administration is actively working in the WTO to strengthen the rules regarding fisheries, and the proposed legislation may have implications for that effort.“

So, the Department of the Interior seems to have coordinated this statement with the Office of the US Trade Represenative (and with NOAA and NMFS?).

This statement appears to have been carefully, and cleverly, drafted avoiding the ignominious and embarrassing (so it seems for the Obama Administration) word “subsidies”, especially in combination with the word “fisheries”.

Notice how Mr Pula referred to WTO negotiations on fisheries subsidies:

“…the United States the United States is working to eliminate practices in ongoing World Trade Organization (WTO) negotiations that have for decades let to over-capacity and over-fishing, particularly with regard to the build-up of foreign fishing fleets. “

Subsidies have become “practices” !

And:

“First, the Administration is actively working in the WTO to strengthen the rules regarding fisheries, and the proposed legislation may have implications for that effort. “

The WTO is strengthening the rules regarding…fisheries! Mr. Pula stopped short of adding the awkward and distressing word “subsidies”.

I do not think this was an oversight. Reflecting on this way of putting things to the Committee I thought that perhaps Mr. Fula was right. As negotiations seem to develop I would not be surprised if the WTO, perhaps unwillingly, would contribute to an strengthening of fisheries management of WTO Members willing to subsidise their fishing industry (see my post of 24/10/09).

USA: Congress discussing a bill on subsidies to the fisheries industry

Last week, on 4 November 2009, the House Natural Resources Committee, Subcommittee on Insular Affairs, Oceans and Wildlife, led by Del. Madeleine Z. Bordallo (D-GU), held a legislative hearing on the following bill:

• H.R. 3583 (Faleomavaega): To provide for a subsidy to sellers and buyers of fish directly delivered to American Samoa from vessels with United States fisheries endorsements that manufacture for the United States. "American Samoa Protection of Industry, Resources and Employment Act"

Among other items the bill proposes payments amounting to USD 200 per metric ton to processors buying tuna and to USD 200 per metric ton to US vessels, fishing under the authority of Western Pacific Regional Fishery Management Council or areas covered by the United States South Pacific Tuna Treaty, or which has an American Samoa Longline Limited Access Permit (issued pursuant to the Fishery Management Plan for Pelagic Fisheries of the Western Pacific Region).

The above payments would be financed by a tax of 6.25% on transhipment of tuna to non-US vessels operating in the above mentioned areas or to non-Samoan processors.

Personally I find that this bill could create some problems for the US.

First of all the subsidy could be discriminatory as it would benefit US vessels only. Furthermore the transhipment tax is tantamount to an export tax. Remember that the US has recently launched dispute settlement proceedings against China for putting barriers to exports of raw materials.

Secondly this bill is in stark contrast with the US position in the ongoing negotiations on fisheries subsidies. Indeed the US appears to be supporting the draft negotiating text which includes prohibitions on subsidies to the processing industry and income and price support subsidies (such as the proposed USD 200 essel payment for each ton delivered to the processing industry in American Samoa.

I will come back on this remarkable bill.

Here is the link to the hearing at the U.S. Congress:

http://resourcescommittee.house.gov/index.php?option=com_jcalpro&Itemid=27&extmode=view&extid=305