Trade bodies seek to preserve First Sale

Trade bodies seek to preserve First Sale    Industry leaders on Wednesday expressed strong support for a rule that allows U.S. importers to value goods using the 'first sale' in a series of transactions as the basis for setting duties.
   Seventy-five companies and 36 industry organizations sent a letter to the House Ways and Means and Senate Finance Committees seeking preservation of the First Sale Rule. The rule allows a company to base the value of an imported finished good, for purposes of determining the duty rate, on the cost of the product at the first sale in the supply chain, rather than the value at the point of importation.
   'We want Congress to understand that the First Sale Rule enjoys popularity in many different industries and throughout the trade community,' wrote Steve Lamar, executive vice president of the American Apparel & Footwear Association (AAFA). 'For the past 20 years, this rule has helped companies lower costs and pass along savings to their customers.'
   The trade organizations said, 'its elimination could potentially cost industries, and their customers, millions of dollars. The First Sale Rule has allowed U.S. importers and exporters to remain competitive in the global marketplace and has resulted in millions of dollars in savings that help generate employment opportunities or that are passed through to American consumers.'
   In 2008 U.S. Customs and Border Protection proposed to revoke the First Sale without consulting Congress. Action was delayed because of language included in the Farm Bill prohibiting CBP from implementing any change to the First Sale Rule until Jan. 1, 2011. Businesses depend on the predictable rules under which they operate and are concerned that revocation may be considered again after that date, the trade organizations said.
   'The First Sale Rule is an important tool that allows retailers to remain competitive in the global marketplace,' said Stephanie Lester, vice president of international trade for the Retail Industry Leaders Association. 'Congress should uphold policies that help companies to navigate the worst recession in 30 years.'
   The organizations pointed to a December report on the First Sale program by the U.S. International Trade Commission, which found that 23,000 importing entities use First Sale in the United States, amounting to $38.5 billion imports in products such as apparel, electronics, footwear, machinery, beverages and pharmaceutical products. Collectively, this represents 8.5 percent of all importing entities and about 2.4 percent by value of total U.S. trade.
   'The ITC report shows that there is a significant number of companies in a diverse range of industries that depend on the First Sale Rule when conducting their day to day business,' said Jennifer Mulveny, senior director for trade and government relations at the law firm Sandler, Travis and Rosenberg. 'Congress should recognize the value of the First Sale Rule and provide assurances to industry that it will continue as a valuation option.' ' Eric Johnson