Over 50 members of the House of Representatives sent a letter to Secretary of Homeland Security Michael Chertoff April 18 asking him to immediately withdraw a Jan. 24 proposal by U.S. Customs and Border Protection to revoke the First Sale Rule. The Senate sent a similar letter to Chertoff a day earlier. The comment period on the proposal closed April 23 and it is now up to CBP to decide what further action to take.
The House letter pointed out that CBP’s proposal would violate a long-standing judicial and administrative interpretation of a U.S. statute in favor of a non-binding commentary from the World Customs Organization. “We hope you concur,” the lawmakers wrote to Chertoff, “that U.S. law trumps a non-binding opinion of an international organization.” Furthermore, the letter argued, an administrative action is the wrong way to go about changing existing policy. The First Sale Rule is based on U.S. law and has been upheld by the courts, the letter said, and it is “an abuse of discretion and contrary to law for an Executive Branch agency to use the administrative rulemaking process to abrogate the judicial interpretation of a U.S. statute.”
Aside from legal considerations, the representatives added, revoking the First Sale Rule would be harmful to U.S. consumers, manufacturers and exporters. For the past 20 years, they said, this methodology has resulted in millions of dollars in savings on virtually every type of product imported from overseas, lowering costs for consumers and helping importers and exporters compete in the global marketplace. Eliminating the rule would force U.S. companies to pay higher import duties, fees and taxes that could be passed on to consumers, “hitting our businesses and families with an increase in the cost of goods they buy at a time when the domestic economy is already struggling.” Exporters could be affected as well if other countries that use the First Sale Rule follow CBP’s lead, which would make U.S. goods more expensive in those markets.
In related news, April 23 was the deadline for public comments on CBP’s proposal, and the large majority of the comments submitted by that date were firmly against it. Expressing their opposition were groups like the American Apparel and Footwear Association, the Customs and International Trade Bar Association, the American Association of Exporters and Importers and the National Retail Federation, as well as various individual companies.
World Trade/Interactive
