GULF OF MEXICO — Shrimpers have filed petitions with the federal government seeking relief from subsidized shrimp imports. The move came several weeks after Gulf of Mexico shrimpers hailed a House bill that included a provision to increase U.S. Customs and Border Protection’s powers to combat illegal imports.
The Coalition of Gulf Shrimp Industries filed the petitions, which seek “countervailing duties” — duties imposed to offset subsidies by foreign governments — on shrimp from China, Ecuador, India, Indonesia, Malaysia, Thailand and Vietnam. The coalition states that the duties are needed “to offset the unfair trade advantage currently held by these countries.”
The petitions will be investigated by the U.S. International Trade Commission and the Department of Commerce, with final determinations expected in the second half of 2013. The coalition states that the seven countries have aggressively undercut domestic prices more and more since 2009 through about $13.5 billion in subsidies for their aquaculture and seafood processing industries — with the shrimp industry the primary recipient.
But even before 2009, the Gulf has seen massive declines to its domestic shrimp industry with annual catch falling from 322 million pounds in 2000 to 212 million pounds in 2008. Meanwhile, the price per pound dropped from $2.78 in 2000 to $1.66 in 2008, according to data from the National Oceanic and Atmospheric Administration and USDA’s Foreign Agricultural Service-commissioned research.
During that same eight-year period, annual imports jumped from 625 million pounds to 948 million.
Twenty years ago, 80 percent of shrimp consumed in the United States came from domestic producers, with 20 percent imported. Although Louisiana leads the country in domestic production of shrimp, it amounts to less than 5 percent of the shrimp consumed in the United States. More than 90 percent of U.S. consumption is from imports.
The petitions document more than one hundred programs benefiting shrimp producers in these seven countries, including numerous export subsidies. Examples in the petitions include the Thai government buying shrimp from farmers and processing it at artificially low prices; the Indian government helping reduce shrimper processors’ ocean freight costs, with added subsidies specifically for exports to U.S. markets; and the Malaysian government investing tens of millions of dollars to build shrimp farms and processing facilities to target various export markets.
The coalition maintains that the countries covered by the petitions exported $4.3 billion worth of shrimp to the U.S. in 2011, accounting for 85% of imports or more than three quarters of the domestic market.
C. David Veal, the coalition’s executive director and the executive director of the American Shrimp Processors Association, said the filing “is about the survival of the entire U.S. shrimp industry.”
“Our harvesters, docks, and processors have all played a vital role in the economy and culture of the Gulf region throughout its history,” Veal said. “This case will help determine whether together we can continue to create jobs, contribute to economic growth, and sustain communities across the Gulf states for years to come.”
Edward T. Hayes, the coalition’s attorney, said the countervailing duties would help domestic shrimpers “compete with the deep pockets of foreign governments,” because without such relief, it “could eventually drive our domestic industry to extinction.”
The coalition states that its membership include more than 90 percent of domestic shrimp production, from Louisiana, Mississippi, Texas, Alabama, Georgia and Florida fisheries.
The House bill filed earlier this month in part is working to combat illegal shrimp imports and the circumvention of anti-dumping duties by foreign shrimp importers.
Anti-dumping duties are tariffs imposed on foreign imports by the Department of Commerce if it determines the import price is below fair market value and thereby would injure or threaten to injure a domestic industry. Often, the logic of such duties is to protect domestic jobs, although critics argue that they lead to higher prices for domestic consumers.
The Southern Shrimp Alliance estimates that the United States has lost at least $130 million from shrimp that has been misclassified and thereby not charged required such duties.
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