Lolo calls the federal ASEDC credit a ‘vitally important tool’ in attracting businesses to American Samoa
Pago Pago, AMERICAN SAMOA — Gov. Lolo Matalasi Moliga is fighting back against a call by Chicken of the Sea International (COSI) - producer of Chicken of the Sea canned tuna - for the US Congress to eliminate once and for all the federal 30A-American Samoa Economic Development Credit (ASEDC).
COSI in a June 28th letter to the US Senate Employment and Community Development Taskforce recommended that the ASEDC “should be left to expire permanently”, as it benefits only StarKist Inc., COSI’s major competitor.
COSI’s letter was included in the Taskforce’s 216-page report released late last month, following a review of federal temporary tax policy — referred to as temporary tax extenders — including the ASEDC. (See Samoa News Aug. 29th edition for details)
Lolo was not pleased with COSI’s letter and wrote directly to the top leaders of the US Senate Committee on Ways and Means in a Sept. 27th letter saying, “I take strong issue” with COSI’s “self-serving letter” which calls to eliminate the ASEDC. Lolo said he is “concerned” that COSI’s “claims serve to undermine the credit, which is a vitally important tool in our efforts to retain and attract businesses to American Samoa.”
The governor recalled a March 2019 letter to the same US committee leaders, noting that American Samoa “does not enjoy the economic benefits of a robust tourism industry or the presence of military installation as do other territories.” He explained that the territory’s remote location makes it more expensive to do business from American Samoa than from other islands in the region or from Asia, and the ASEDC “helps us reduce this competitive disadvantage as we seek to attract more businesses to the territory.”
He said StarKist is currently the single largest private sector employer on island, and “as such, is an interest of which we are fiercely supportive.” However, he said COSI’s depiction of ASEDC benefiting only StarKist “could not be further from the truth.”
“In fact, this credit is available to most companies that may consider setting up facilities in our territory and, without it, we will be at an even worse competitive advantage than we currently are,” Lolo explained. He pointed out that American Samoa has the lowest gross-domestic-product (GDP), by far, of any American state or territory.
“In fact, our GDP is only one-half that of the next lowest territory,” he noted, adding that American Samoa’s unemployment rate is currently at 11.4% - more than three-times the national average. Lolo further stated that last year, American Samoa was devastated by Tropical Storm Gita, “the effects from which we are still recovering.”
“These factors explain why the American Samoa Economic Development Credit is so important to our territory, as a whole,” he wrote. “We are constantly on the lookout for companies that may seek to relocate to or expand in American Samoa”. Without the 30A-ASEDC, “our efforts at trying to boost our very challenged economy will be severely impacted.”
In conclusion, Lolo wrote, “On behalf of the 55,000 residents of American Samoa, I urge you to ignore any self-interested calls to end the American Samoa Economic Development Credit and to instead, make it permanent so that we may continue to benefit from this important tool with a new level of certainty that it will be available to potential employers in our territory for the long term.”
US Rep. Rick W. Allen of Georgia also wrote to the Senate Taskforce earlier this year in June, calling for the elimination of the ASEDC, which he argues, benefits only StarKist, competing with COSI, a plant in Lyons, Georgia.
COSI made no mention in its letter that it shut down cannery operations in American Samoa on Sept. 30, 2009 — which was described at the time by then Gov. Togiola Tulafono as an “economic disaster” following the Sept. 29, 2009 tsunami — and relocated operations to Lyons, Georgia — leaving more than 1,500 workers unemployed and causing a major economic blow to American Samoa.