"We value your continuing support and encouragement as we work with both Canada and Mexico to rectify this disparity," wrote Zoellick in a letter to Senator Collins. "It is unfortunate that the U.S. small businesses that have long recognized the benefits of international trade - those on our borders - have been handicapped by this disparate treatment."
Senator Collins introduced a resolution in the Senate seeking parity between the personal exemption allowed by the U.S. and those permitted by the Canadian and Mexican governments. These allowances determine the amount of merchandise that people can bring back to their home country after making purchases across the border, without having to pay duties on those goods. Senator Collins wrote to the U.S. Trade Representative, the U.S. Ambassador to Canada, and the U.S. Secretary of the Treasury urging them to pursue the issue with Canadian officials.
"The discrepancy in personal exemption allowances puts American retailers in border communities at an enormous disadvantage because it discourages Canadian and Mexican visitors from buying goods when they are in the U.S.," said Senator Collins. "In Maine, this trade disparity hurts small businesses along the Canadian border. We must act forcefully and immediately to ensure that our small businesses have fair access to compete in the international marketplace."
Currently, Americans traveling to Canada are allowed to return to the U.S. with significantly more merchandise than Canadians who visit the U.S. For example, a Canadian citizen is given no duty-free personal exemption allowance for trips under 24 hours and Canadian Customs is instructed to begin collecting duties and taxes on merchandise as long as it can collect three Canadian dollars. By contrast, an American traveling to Canada for less than 24 hours is exempt from paying duties on $200 worth of merchandise on return to the U.S. For trips longer than 48 hours Americans are exempt from paying duties on $800 worth of goods.
The U.S. Trade Representative said his office is seeking a review of current personal duty exemption programs and is pressing Canadian and Mexican officials to resolve the personal allowance disparity.