Canada proposing tariff on U.S.-built boats

WASHINGTON, D.C. – The National Marine Manufacturers Association is warning U.S. boat builders that the Canadian government on November 23 proposed imposing a 100 percent surtax on U.S. manufactured recreational boats.

The surtax would apply to imported products from the U.S., including pleasure vessels such as yachts, sailboats, motorboats, inflatables and canoes, the association reported in a recent release. NMMA is asking its members to contact their dealers in Canada and urge them to register their opposition.

"This surtax would be devastating to U.S. boat manufacturers that export vessels to Canada. It would double the price of all American boats sold over the border, eliminating our competitiveness in the Canadian market,” said NMMA President Thom Dammrich.

The surtax is retaliation for the Byrd Amendment, a law that allows duties collected from antidumping and countervailing to be given to U.S. firms that petition for tax relief, according to NMMA.

The Byrd Amendment, named after Senator Robert Byrd (D-WV), was challenged by a number of countries in the World Trade Organization (WTO). The WTO ruled that the amendment violates their trade agreements and member countries can retaliate against the U.S. Canada also intends to levy tariffs on many other imported U.S. goods besides boats.

The Canadian government is soliciting comments on the proposed tariffs until December 20, 2004. NMMA urges all American boat builders who do business in Canada to contact their Canadian dealers and urge them to file comments. For more information on how to file comments, visit the NMMA Government Relations Web site.

Canada has said it favors a repeal of the Byrd Amendment over the imposition of tariffs, but until that happens, it must explore the retaliatory measures allowed to them by the WTO. The WTO found in January 2003 that the Byrd Amendment was inconsistent with their rules and gave the U.S. until December of that year to come into compliance. By January 2004, the U.S. had failed to come into compliance and the WTO members began to file for permission to retaliate.

“NMMA will be aggressively pursuing a repeal of the Byrd Amendment in the 109th Congress, and will be meeting with key Congressional staff next week,” said NMMA Vice President of Government Relations Monita Fontaine. “The amendment must be repealed immediately in order to prevent not only Canada but other WTO countries from seeking to impose tariffs on the boating industry.”

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