Crossing the Border for a Good Deal
IF you ride a motorcycle, wear a fur coat, or love old cars, free trade is just the thing. And although tariffs are being dropped in both Canada and the United States, what is a deal depends on which side of the border you're on. Americans can wear cheaper fur coats and Canadians can buy that Harley-Davidson they've always wanted.Skip to next paragraph
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The free-trade agreement between Canada and the US went into effect New Year's Day. That means tariffs are coming down, but individual Americans and Canadians won't see many bargains right away.
Motorcycles are an exception. Tariffs of between 8 percent and 12.5 percent are off, but since there are no motorcycles made in Canada, Americans get no deals. Most motorcycles sold in Canada are made in Japan, but those made in the US by Harley-Davidson Inc. sell well here. One dealership has already dropped prices on the range of bikes by $900 to $1,800 (Canadian; US $750 to $1,500).
The 25 percent tariff on furs disappeared Jan. 1 - and that includes coats and so-called accessories such as hats and gloves. And the 22.5 percent tariff on leather garments lined with fur was also dropped. This could provide bargains for Americans, because Canada is the country that produces cheap furs.
``Forty percent of our customers are American tourists now,'' says a Toronto furrier on Spadina Avenue, where there are as many as a dozen fur stores on the block. ``Let's face it, many of them just wore them home past the customs agent. Now they'll be able to do it legally.''
Tariffs come off totally on other goods, such as skis, skates, and computers, but more gradually on clothing, textiles, and appliances that won't be totally duty-free until Jan. 1, 1993.
The reason for the gradual phase-out is to give textile and appliance industries time to adjust, especially in Canada, where they are usually less efficient.
But the border between Canada and the US did not disappear on the first of the year. ``Most people seem to understand the rules,'' said a customs officer on the Canadian side. ``They haven't been trying to sneak things through with the excuse they thought it was covered by free trade.'' The border posts are still there, and forms have to be filled out, and on the Canadian side at least, money is still paid even on duty-free goods.
A few days ago, this reporter bought a computer printer for $369 - already free of duty - in Vermont and drove it across the border into Quebec. The printer cost $369.19. The customs clerk converted that to American currency at the rate of $1.19 for a total of $439.11 Canadian. Then a federal sales tax of 12 percent, or $52.69 Canadian was added on. The printer came to $491.80. That was still a bargain, as the same product in Canada was retailing for $700 or more. But the whole process was tedious and took about half an hour.
One of the great bargains for Canadians under the free-trade deal will be in used cars. To bring a used car into Canada before Jan. 1, it had to be at least 15 years old. There was no duty on newer cars; they were just prohibited, period. Now cars can be brought in duty-free if they are eight years old. Next year it will be six years old, and so on until the tariff is totally removed by Jan. 1, 1993.
``This is going to be great for people like me who buy a lot of old cars in California,'' says Horst Kroll of Scarborough, Ontario, who buys and sells and old Porsches. ``The cars are so much cleaner down there. With free trade, we can get newer models and they'll sell much more quickly.''