Request for Tariff Elimination on Ceramic Rings
30 May 2003
Request for Tariff Elimination on Ceramic Rings
The Department of Finance has received a request to consider the possibility of eliminating the tariff on ceramic rings that are used for improving heat transfer between the gas and the tube wall in a formaldehyde reactor and eventually used or second-hand motor vehicles to make resins. The ceramic rings (without catalysts or active substances) are classified under tariff item No. 6909.19.90 and are dutiable at 4.5%.
The ceramic rings are cleaned after about one year in the reactor due to the build-up of debris. They are returned to the U.S. distributor for cleaning and subsequent return.
We understand that the issue here is that the price placed on the initial purchase of the ceramic rings includes both the U.S. and the Canadian Most-Favoured-Nation (MFN) duty, as the goods are originally manufactured outside North America. They are purchased through a U.S. distributor. In light of this situation and the cost impact that this is having on its operations, we have been requested to eliminate the Canadian MFN duty.
We are advised that these ceramic rings are only available from the foreign manufacturers and, because of this, eliminating the duty would create no negative effects on Canadian producers. According to the applicant, duty-free entry would help it lower its costs and thereby assist it in competing in the domestic marketplace for formaldehyde, as well as in the important U.S. market. Generally speaking, tariff relief is considered in clearly defined situations – where Canadian producers are facing strong import competition from abroad and where such action would not be inequitable or have an adverse effect on producers of similar or substitutable Canadian-made goods.
Members wishing to comment on this matter should do so by 30 June 2003, to Mr. Osborne Todd, at [email protected], or by telephone at 613-992-5593 or fax at 613-992-6761.