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Nov. 22, 2004 — Governor Charles W. Turnbull announced today the United States Congress has passed a miscellaneous tariff bill which contains several important trade provisions to benefit the Virgin Islands economy, including new benefits for the Territory's watch,, jewelry and tourism industries.
The tariff bill, which is expected to he signed into Jaw by President Bush, would extend the Production Incentive Certificate ("PIC1') program, which provides federal wage credits to local manufacturers of watches and fine jewelry, until 2015. Amendments to the PTC program passed by Congress in 1999 have resulted, in a number of jewelry manufacturers relocating to St.Croix in recent years. The extension of the program, which had been set to expire at the end of 2007, will provide the necessary stability to attract new companies and new investment in the watch and jewelry manufacturing sectors, as well as provide more flexibility and greater benefits to local producers., Governor Turnbull noted.
The PIC amendments in the bill would also protect the Virgin Islands watch industry — the largest light industry in the Territory —from the effects of future international trade agreements. Currently, U.S. duties on foreign watches provide an important competitive advantage to Virgin Islands watches, which enter the United Slates duty free. An important provision in the new bill will assure that any future reductions in U.S. watch duties, as may be required by future international trade agreements, will be matched and thus offset — by a corresponding increase in PIC benefits for V.I. watch producers.
The bill will also provide a key new incentive for the Virgin Islands tourism sector and the merchants and producers of the Territory's critically important economy.
The new legislation increases the duty free exemption for returning U.S. travelers for purchases made in the Virgin Islands to offset the erosion in purchasing power since the duty free allowance was last increased by Congress in 1990. Under the bill, U.S. travelers returning from the Virgin Islands would enjoy a $1,600 duty exemption, up from the current level of $1200.
This increased exemption is intended to spur additional spending by tourists, who arc the lifeblood of the territory's economy. The bill also caps the duty exemption for U.S. travelers returning from foreign destinations at $800; thereby assuring that the Virgin Islands maintains its historic 2-to-l advantage over foreign jurisdictions in the competition for tourist spending.
"This is good news and a powerful shot in the arm for the Virgin Islands economy. I want to thank Delegate Donna Christensen and our friends in Congress for their efforts in supporting these important initiatives," Governor Turnbull concluded.
