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-2- Section 9, Common Market, expands on the international, sovereign aspect of Puerto Rico under the Compact by having the "Free Associated State of Puerto Rico" accepted as an associated developing state which can participate in all the benefits from any regional or worldwide system of preferences for developing countries. This is contrary to the fact of U.S. sovereignty and responsibility with respect to the conduct of foreign affairs and should not be approved. Also in this section, Puerto Rico would, while remaining in the U.S. customs territory, permit duty free imports of material for processing, provided that not less than 35% in value is added in Puerto Rico before shipment to the United States market. While this value added provision applies in Guam and the Virgin Islands, both of these territories are outside the U.S. customs territory. Granting this privilege to Puerto Rico would affect adversely the income Guam and the Virgin Islands now receive from this value added benefit. There is a need, as set forth in Section 10, for Puerto Rico to control to some degree the flow of immigration to the Island. The influx of large numbers of poor, uneducated and untrained aliens into an already economically depressed area makes a difficult situation even more untenable. However, application of the provisions of this section would have to be monitored carefully by the United States Immigration and Naturalization Service to insure that the provisions of Section 10 were not abused or misused. In the last analysis, this Report and recommended draft Compact pro- posing a new relationship between the United States Federal Government and its territory, Puerto Rico, should go forward to the United States Congress, but with the clear understanding that it is not a definitive document and is subject to debate, change and many compromises before it finally postulates a "permanent" relationship. Sincerely yours, Tom Secretary of the Interior Mr. James E. Connor Secretary to the Cabinet The White House Washington, D. C. 20006

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    "ocrText": "-2-\nSection 9, Common Market, expands on the international, sovereign\naspect of Puerto Rico under the Compact by having the \"Free Associated\nState of Puerto Rico\" accepted as an associated developing state\nwhich can participate in all the benefits from any regional or\nworldwide system of preferences for developing countries. This is\ncontrary to the fact of U.S. sovereignty and responsibility with\nrespect to the conduct of foreign affairs and should not be approved.\nAlso in this section, Puerto Rico would, while remaining in the U.S.\ncustoms territory, permit duty free imports of material for processing,\nprovided that not less than 35% in value is added in Puerto Rico before\nshipment to the United States market. While this value added provision\napplies in Guam and the Virgin Islands, both of these territories are\noutside the U.S. customs territory. Granting this privilege to Puerto\nRico would affect adversely the income Guam and the Virgin Islands now\nreceive from this value added benefit.\nThere is a need, as set forth in Section 10, for Puerto Rico to control\nto some degree the flow of immigration to the Island. The influx of\nlarge numbers of poor, uneducated and untrained aliens into an already\neconomically depressed area makes a difficult situation even more\nuntenable. However, application of the provisions of this section\nwould have to be monitored carefully by the United States Immigration\nand Naturalization Service to insure that the provisions of Section 10\nwere not abused or misused.\nIn the last analysis, this Report and recommended draft Compact pro-\nposing a new relationship between the United States Federal Government\nand its territory, Puerto Rico, should go forward to the United States\nCongress, but with the clear understanding that it is not a definitive\ndocument and is subject to debate, change and many compromises before\nit finally postulates a \"permanent\" relationship.\nSincerely yours,\nTom\nSecretary of the Interior\nMr. James E. Connor\nSecretary to the Cabinet\nThe White House\nWashington, D. C. 20006"
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