Shipmate Stove Division,
Richmond Ring Company, 44022- 1 ( D.JC ) sm

Souderton, Pennsylvania. 6174 J 1901

U.S.A. 18964

Gentlemen:

■ This is further to my letter of September 30, 1986, inquiring as
to the number of marine cooking apparatus and heaters exported by
your firm to Canada. The fuel source could be kerosene, diesel,
propane or natural gas.

The departmental survey has now been completed. Effective
March 1, 1987, all such cooking apparatus and heaters for use in
the construction or equipping of vessels are considered to be of a
class or kind made in Canada by Force 10 Marine Ltd. of Richmond,
B.C. Accordingly, such goods are no longer eligible for duty free
entry under tariff item 44022-1 but, rather, are dutiable under
tariff item 44300-1 at 11.3 per cent Most-Favoured-Nation rate
when imported from the United States.

Tin s..cancels and supersedes all previous rulings on these types
of goods.

Yours truly,

•Thank you "for -your letter of April 9, 1987,

^concerning _a .recent change in the Canadian tariff on marine: -st.oves^froBTfreeT.to 11.3%. 'il understand the reasons for.your cqncerff,)^,utl,can .assure you that.^this.'.change was"fully in keeping »ith our'GAn obligations towards the'United States' andJJ.s^n6t*vthe'3result',of a capricious "or'protectionist action.,

The change in dutiable status of these stoves Lresulted from a change in their classification from Tariff litem 44022-1 to Tariff Item 44300-1. Item 44022-1 provides [free entry for a list of specified metal articles used to equip {vessels; it also covers all other metal articles for vessels, fbut only if they are determined to be o£ a "class or kind not made in Canada". The'"-not-made linaCanadaocqualificat ion,'-which" extends "duty-free'.treatment ,ri.can tbelFlifted if .'Revenue Canada _. determines_,_^af ter>-.having ..surveyed the ".industry, -that -Canadian" Jjnanufacturers^nave^actually produced >« "quantity sufficient to' | supply ^'atsi.easteJ.0%\of It he ,:normai ACanadi juijconsumpt ion .

Following representations from a Canadian producer, and after thorough investigation. Revenue Canada determined that Canadian production of such stoves is sufficient to supply at least 10% of Canadian consumption. As a result Revenue Canada had no choice under Canadian law but to rule that marine stoves (other than certain alcohol-burning types) are now "made in Canada" and no longer qualify for duty-free entry under Tariff Item 44022-1. Instead, they fall under Tariff Item 44300-1 at a rate of 11.3%.

EXHIBIT 3, page 2

In view of the foregoing, jf^trust ..thatyou appreciate ^StTiat^U^^rial^e^ih^ tcome rabout-*as'*a 'result";o£-.a - tar i f f _policy.deci si on -or-any flegi slat iv.e iact ion-to increase tari ff , protection. This was simply a case of a Canadian Manufacturer taking advantage of his rights under Canadian law, which ia consistent with GATT rules. These provisions have been in effect for many years and are included in Canada,s GATT tariff schedule, which has been accepted by our trading partners.

As you know, an important objective in the CanadaUnited States trade negotiation is the phased elimination of tariffs on trade between our two countries. ..il-/believe vthat

-jthese ^eqo^at.i6nsf%:bf fe£jthe «best -prospect .^pf^esolyj,ng ;&n a

lKiS?Jy*way23y<^r'^^

Yours sincerely,

Allan Gotlieb
Ambassador