nations. While the recently announced free trade agreement would eventually achieve this goal, its ultimate adoption remains in doubt and its implementation could well take 10 years. In the meantime, the enactment of H.R. 2604 would serve to mitigate this disparity by removing a unilateral duty-free benefit, unintended by Congress, from Canadian hardboard exports to the U.S. Brazilian hardboard which is edge-worked also is entitled to duty-free status under T.S.U.S. 245.90. To AHA's knowledge, Brazil accords no special status to imports of edgeworked hardboard, which like other hardboard imported from the U.S., are subject to an 85 percent ad valorem tariff.'' Moreover, the Harmonized Tariff nomenclature, which will soon be put into effect by most of America's major trading partners, includes mechanically worked hardboard and hardboard whose edges have not been worked under the same generic headings. Hardboard will be classified under Heading 4411, "(f)iberboard of wood or other lingeous materials, whether or not bonded with resins or other organic substances." It is only in the United States that a special, duty-free eight-digit sub-category has been carved out for hardboard that is "tongued, grooved or rabbetted continously along any of its edges," because of this dispute. COHCLU8IOM AHA supports H.R. 2604 even though it might reduce duties on some hardboard products because it believes that it is absurd for Customs to classify two nearly identical products under two different tariff categories having widely divergent duties, merely because one product has been subjected to certain minimal edgeworking. The proposed headnote definition would eliminate this anomaly by including in the headnotes a definition of "hardboard" that would ensure that hardboard imports, notwithstanding their type(s) of edges, are subject to uniform classification and duties. The rationale for passage of H.R. 2604 is equally compelling to that which spurred adoption by the House of Section 815 of H.R. 3, which would restore edgeworked plywood to its eo. nomine category. In the interests of fairness, uniformity and equity, the American Hardboard Association strongly urges passage of H.R. 2604. (7) On* partlcualr hardboard product haa bean the subject of protracted litigation between AHA and theCanadian Hardboard Manufacturer, NacMillan EXHIBIT I The member companies of the American Hardboard Association are: Abitbi-Price Corporation Evanite Hardboard, Inc. Forestex Company P. O. Box 68 Forest Grove, Oregon 97116 Georgia-Pacific Corporation MacMillan Bloedel Building Materials 50 Oak Street Weston, Ontario M9N 1S1 Masonite Corporation Temple-Eastex, Inc. Weyerhaeuser Company P. O. Box 9 Klamath Falls, Oregon 97601 To suspend for a temporary period the duty on certain nitrogenous compounds. No statements submitted. H.R. 2757 STATEMENT SUBMITTED BY: Jean C. Morrow Marine Operations Director Shipmate Stove Division Richmond Ring Company P.O. Box 375 Souderton, PA 18964 (215) 855-2609 BACKGROUND INFORMATION: The Richmond Ring Company, established in 1934, purchased The Stamford Foundry Company's patterns and registered trademark for Shipmate stoves in 1950. (See Exhibit 1: advertisement from Pacific Fisherman, March 1925). Shipmate stoves have a world renowned reputation for quality with no built in obsolescence. Shipmate stoves are exported to Canada, England, France, Taiwan and Hong Kong, to name a few; and, through the years, many Canadian boat builders used Shipmates exclusively. NEW CANADIAN MARINE STOVE TARIFF: Received letter on March 2, 1987, from Revenue Canada, dated February 19, 1987, advising that new duty of 11.3 per cent on marine stoves would be effective March 1, 1987. (See Exhibit 2; all such cooking apparatus and heaters for use in the construction or equipping of vessels of class or kind made in Canada by Force 10 Marine Ltd. of Richmond, BC). Revenue Canada levied this new 11.3 per cent duty during the ongoing trade talks between the U.S. and Canadian trade representatives. Canadian made marine stoves cross the U.S. border, by the truckloads, at 4.2 per cent. The 11.3 per cent on marine stoves was levied at the request of a Canadian manufacturer, according to Allan Gotlieb, Canadian Ambassador. (See Exhibit 3). This manufacturer is identified by Revenue Canada as Force 10 Marine in Exhibit 2. The Canadian government claims that they recently became aware of Force 10 Marine. However, Force 10 Marine has been extant for 19 years according to the Canadian government's advertisement section, entitled 'Canadian Boat' in the September 1987 BOATING INDUSTRY, 1988 Business Outlook. (See Exhibit 4 - complete magazine section in color - ONE COPY ONLY). Force 10 Marine, Richmond, BC crosses the U.S. border at Blaine, Washington, with truckloads of stoves and parts. All stoves and parts are shipped F.O.B. Blaine. Washington. Enclosed is a Force 10 Marine label which was attached to our recent order for kerosene stove parts, products of Portugal. (See Exhibit 5). According to Gerald J. McManus, U.S. Customs Service, Force 10 Marine, entries have been properly assessed, and they can ship anywhere they wish once the goods clear customs. (See Exhibit 6). However, I do not believe a foreign manufacturer who ships according to the enclosed label is properly identified. I have sent a copy to Mr. McManus for his opinion. The Border Brokerage Co., Inc. (same as on Force 10 shipping label) brought suit against the United States of America in 1984 because of Customs assessment on imports from another Canadian marine stove manufacturer, Dickinson Marine. The president of our company testified as an expert witness on behalf of the United States. The judge ruled in favor of the plaintiff, Court No. 81-10-01432. Based on this case, Customs levies 4.2 per cent on marine stoves and heaters. The stoves and heaters at issue were considered NOT portable in Border Brokerage Co., Inc. vs U.S.A. However, the stoves and heaters in this case are not unlike those manufactured by Richmond Ring Company, Force 10 Marine, and all other manufacturers of marine stoves. According to the case, the boats were considered households since the boater can live onboard. The case illustrates a lack of careful review by the judge, a dearth of knowledge about sailing and motor yachts, and a complete disregard for an expert in the marine stove manufacturing industry. SUMMARY: It was only after Revenue Canada established their new marine stove tariff that my attention was drawn to the U.S. tariff. I learned that we do not have such a tariff; marine stoves enter the U.S. under the tariff for household cooking stoves. Shipmate stove sales have been impacted greatly by Force 10 Marine imports. Not because they offer a better product, but because of subsidization and an outmoded U.S. tariff. When the Canadian government picks up your advertising expense in all major publications, pays your expenses for attending all major trade shows, and the U.S. government allows you to bring in truckloads of marine stoves at 4.2 per cent (possibly at cost rather than wholesale), then the U.S. manufacturer cannot compete at the sa-ne distributor discount level. Therefore, since price is the major consideration, the Canadian marine stoves will outsell the U.S. stoves. Richmond Ring Company's stove sales dropped over $200,000 annually during 1985 and 1986. The pattern continues for 1987, and clearly demonstrates Force 10 Marine's impact on domestic sales. If I matched their discounts to distributors, then I would be below cost. I cannot stop the subsidization, but I can ask my government to establish a reasonable tariff to offset some of the impact. This would be beneficial since Force 10 Marine ships F.O.B. Blaine, HA, and U.S. prices include duty and brokerage fees. In establishing this tariff, I would ask that it include all stoves and heaters for vessels, all fuels including electric, and that the word 'PORTABLE' be removed since it was misused in the Border Brokerage Co., Inc. vs U.S.A. Including electric marine stoves has become necessary due to Force 10 Marine's recent introduction of an electric marine stove. They will soon be dumping these by the truckloads. While we do not presently manufacture electric marine stoves, others in our small industry do, e.g. Seaward Products, Inc., whose sales have dropped $250,000 annually. An 11.3 per cent duty should be levied on all such cooking apparatus and . heaters for use in the construction or equipping of vessels. Contrary to the ruling in favor of Border Brokerage Coi, Inc., such stoves and heaters should not have been considered as household stoves. The word "PORTABLE" in H.R. 2757 must be removed or Border Brokerage Co., Inc., can bring suit on behalf of Force 10 Marine. It has already been shown in Exhibit 5 that Force 10 Marine ships from Border Brokerage, Co., Inc's Blaine, WA location. (See Exhibit 7, Shipmate catalogue). In discussing duties with distributors from other countries, it would appear that 11.3 per cent is the norm. Only the United States has outmoded and extremely low duties. Reassessing U.S. tariffs, establishing new tariffs, and raising old tariffs to approximate the rest of the world may be one way to ensure equitable treatment for U.S. manufacturers. We want equity in tariffs, not quotas and other hindrances to export/import activities. H. R. 2757 offers equity to the manufacturers in our small industry. |