Under US administration as part of the UN Trust Territory of the Pacific, the people of the Northern Mariana Islands decided in the 1970s not to seek independence but instead to forge closer links with the US. Negotiations for territorial status began in 1972. A covenant to establish a commonwealth in political union with the US was approved in 1975. A new government and constitution went into effect in 1978.
The first people to come to the Marianas arrived over 3500 years ago, probably from Southeast Asia through the Philippines. The south islands were occupied early, the north later. The ancient people evolved into Chamorro people. An ancient trading route between the central Carolinian islands brought ancestors of the Carolinians to Saipan.
The first European to arrive in these islands was the Portuguese navigator, Ferdinand Magellan, who came to Guam and Rota in 1521 during his circumnavigation of the world in an attempt to find a route across the Pacific. Spain took possession of the archipelago in 1565 and ruled it for more than 300 years. The first permanent Spanish colony was established in 1668. Spain ceded Guam to the United States following the Spanish-American War, then sold the Northern Mariana Islands to Germany in 1899. Germany acquired these islands primarily to increase their international prestige. German economic development was based on the copra industry.
Japan took control of the Northern Mariana Islands in 1914, the first year of World War I. By ratification of the League of Nations in 1920, Japan received a mandate over the islands. This mandate lasted until 1945 with 30,000 Japanese nationals residing on Saipan. The Japanese developed the island largely for sugar production and processing.
World War II came to the Marianas in 1941. Major American battles occurred in the Northern Marianas in 1944, including the pivotal Marianas campaign which signaled the end of the War in the Pacific. The Emperor of Japan surrendered to the Allied Forces on August 15, 1945, ending World War II, and a U.S. military government was instituted in the Northern Mariana Islands.
In 1947, the Northern Mariana Islands became part of the post-World War II United NationsíTrust Territory of the Pacific Islands (TTPI). The United States became the TTPI's administering authority under the terms of a trusteeship agreement. In 1976, Congress approved the mutually negotiated Covenant to Establish a Commonwealth of the Northern Mariana Islands (CNMI) in Political Union with the United States. The CNMI Government adopted its own constitution in 1977, and the constitutional government took office in January1978. The Covenant was fully implemented on November 3, 1986, pursuant to Presidential Proclamation no. 5564, which conferred United States citizenship on legally qualified CNMI residents.
On December 22, 1990, the Security Council of the United Nations terminated the TTPI as it applied to the CNMI and five other [the Marshall Islands and the Federated States of Micronesia (Chuuk, Kosrae, Pohnpei and Yap)] of the TTPI's original seven districts.
Under the Covenant, in general, Federal law applies to CNMI. However, the CNMI is outside the customs territory of the United States and, although the internal revenue code does apply in the form of a local income tax, the income tax system is largely locally determined. According to the Covenant, the federal minimum wage and federal immigration laws "will not apply to the Northern Mariana Islands except in the manner and to the extent made applicable to them by the Congress by law after termination of the Trusteeship Agreement:"
The economy benefits substantially from financial assistance from the
US. The rate of funding has declined as locally generated government revenues
have grown. The key tourist industry employs about 50% of the work force
and accounts for roughly one-fourth of GDP. Japanese tourists predominate.
Annual tourist entries have exceeded one-half million in recent years,
but financial difficulties in Japan have caused a temporary slowdown. The
agricultural sector is made up of cattle ranches and small farms producing
coconuts, breadfruit, tomatoes, and melons. Garment production is by far
the most important industry with employment of 17,500 mostly Chinese workers
and sizable shipments to the US under duty and quota exemptions.