In the current economic downturn, a situation has arisen in the Customs and Border Protection Agency’s [CBP] purview that affects the United States as a whole, yet has received very little media attention. In January, the CBP filed within the federal register a proposed change in customs valuation, changing “first sale” valuation of imports to “last sale” valuation. “First sale” valuation produces customs revenue based on the price paid to the “first” foreign manufacturer; “last sale” valuation produces customs revenue based upon the actual full price paid by the U.S. importer. In contrast, many countries have “last sale” valuation, which the World Customs Organizations [WCO] has called for, and many countries that U.S. exporters ship into have “last sale” valuations. The United States is losing customs revenue, as well as putting domestic manufacturers at further disadvantage by ignoring the actual purchase price paid by importers on foreign goods. If they knew of it, many U.S. domestic manufacturers and members of the public might comment positively on the CBP proposal, but most people are unaware of it. The CBP has received a preponderance of negative comments from importers, importers’ lobbyists/lawyers and members of Congress, claiming with “last sale” valuation, prices to consumers would go up. However, price increases aren’t a foregone conclusion of “last sale.” For example, importers might instead choose to decrease their profit margins; customs is only one factor in prices charged to consumers, and other outcomes are possible. The change to “last sale” is important to U.S. domestic manufacturers, their employees, their communities and the United States as a whole. On April 29 the Senate Finance Committee held a hearing on trade oversight, with the customers valuation issue on its agenda. U.S. domestic manufacturers and citizens may want to contact the CBP, members of Congress and media to support the CBP’s proposal. NANCY GOLD Schenectady The writer is president of Tough Traveler Ltd.
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