The Honorable

Dick Schulze

Bouse of Representatives

Washington, D.C. 20515

Dear Mr. Schulze:

Your letter of April 9, 1987, inquired about the tariff status of portable marine stoves imported from Canada. You specifically ask: (1) What is the U.S. tariff rate on marine stoves} (2) Has a Canadian company. Force 10 Marine Ltd. ("Force 10"), been subject to such duties; and (3) Is it common or legal practice for Canadian companies to export their goods to destinations in the United States free on board from the state of Washington, particularly if there is no manufacturing facility in that state? You also asked about Customs regulations on importing the stoves from Canada.

Absent a detailed description of the stoves, we cannot offer definite advice as to their dutiable status. However, we are enclosing a recent court case that deals with marine stoves. The rate of duty for item 653.52, Tariff Schedules of the United States (TSUS), is now 4.2 percent ad valorem.

With regard to the second question raised by your inquiry, after reviewing entries made by Force 10, we have no reason to believe that marine stoves are being imported without the proper duties being assessed thereon. If you have any information to the contrary, we would be pleased to look . further rnto the matter.

Your last question concerned a "common or legal practice" of Canadian companies which ship goods free on board to other states after bringing those goods into the United States through a port in the State of Washington. Once goods are correctly entered into the stream of commerce of the United States, no legal impediment exists which would hinder those goods from being sent elsewhere in the United States. The only legal problem that we foresee would arise if those goods are in some way mislabeled to give the impression that the marine stoves are a product of the State of Washington.

EXHIBIT'S, page 2

Finally, Customs has no special regulations pertaining to the importation of marine stoves.

If we can be of further assistance, please do not hesitate to call on us.

Sincerely,

.? .? \

/<- .l') HJWM

A^-r Gerald J. McHanus

'Assistant Commissioner
Commercial Operations

Enclosure

George R. Tuttle (Gary C. Cooper) for plaintiff.

Richard K. Willard, Acting Assistant Attorney General, Joseph I. Liebman, Attorney in Charge, International Trade Field Office, Kenneth N. Wolf, United States Department of Justice, Commercial Litigation Branch, for defendant.

Upon consideration of the evidence introduced at trial in the above action held without a jury on September 17, 1984, in Seattle, Washington, and upon consideration of all filings herein the court finds as follows: Findings of Fact '"•" '•'•■' V

1. The Dickinson boat stoves and heaters at issue were exported from Canada on January 6, 1981, and'entered at the Port of Blaine, Washington, on January 19 ,* 1981.' ..:

TASCO ENGINEERING DIVISION TASCO MARINE DIVISION

-Mechanical Products "Boating Products

(or the 'or the

Electronic Industry- Marine Industry

November 18, 1987

Mr. Robert J. Leonard

Chief Counsel

Committee on Ways and Means

U.S. House of Representatives

Room 1102, Longworth House Office Bldg.

Washington, DC 20515

Subject: Bill H.R.2757

Dear Mr. Leoanrd:

As a U.S. manufacturer of stoves designed for use on marine vessels I have felt considerable market loss this calendar year, due primarily to the unfair trade condition which exists between the U.S. and Canada. Prior to this year the Canadian boat building industry was 21% of my sales on a 3 year average. Currently, we have recorded less than 5% of our year to date total sales in Canada.

A close contact at one former customer revealed to me that the last quote issued to them was a 7% difference in cost between my product and the competitor's (Canadian manufacturer). Clearly, the 11.3% duty ruling has a strong bearing in purchasing decisions and the Canadian manufacturer has a significant market advantage above the border.

Further, Canadian manufacturers enjoy extensive subsidizing of advertising and other promotional costs by the Canadian Government for which a typical manufacturer would budget 10% of his estimated sales. We see their participation in virtually all marine publications and every major trade show, something I would love to oe able to afford to do.

As their penetration into the U.S. market grows, I think it's time the U.S.
Government did something to protect our manufacturers, or better yet create
an environment throughout the U.S. and Canada which does not penalize anyone,
an environment which encourages superior engineering and competitive pricing.
Unfortunately, we're all working in an industry where price is almost always
the determining factor in a purchasing decision.

I request that swift action be taken to establish the tariff. I have no aversion
to good competition, however 1 do not feel we or any other manufacturer should
be subject to penalties which result in unfair trade.

Respectfully Yours,

Bruce M. Bodge

Vice-President