January 18, 2013

Following US International Trade Commission's (ITC) preliminary investigation into an alleged government subsidy case, Indonesian shrimp exporters met with the US ITC this week to provide information.

Indonesian Fisheries Product Processing and Marketing Association Chairman Thomas Darmawan said that 13 firms have vowed to offer the comprehensive information required by ITC.

"We will give relevant data as requested, including our export figures and annual minimum wage. We are trying to cooperate by complying with all the procedures," he said.

The case was launched after US shrimp producers filed a petition in late December asking the US Department of Commerce (DOC) to conduct an anti-subsidy investigation into frozen warm-water shrimp imports from Indonesia, Vietnam, Thailand and other shrimp exporting countries. The US shrimp sector alleges that these countries receive government subsidies to enhance their competitiveness in shrimp markets abroad, and that this is an unfair practice.

In consequence, US shrimp producers have asked the US Government to impose retaliatory duties on the seven shrimp producers, to compensate for the losses incurred. The ministry will commence the investigation on January 17. Meanwhile, Indonesian representatives will be cooperating in consultative talks with US Government officials in Washington, DC.

The Trade Ministry of Indonesia's acting director general for foreign trade, Bachrul Chairi, expressed hopes that the US would not decide to impose an anti-subsidy duty on Indonesian shrimp, as this move would disrupt shipments to Indonesia's largest shrimp export destination.

"The Indonesian government will go through all the investigative procedures and coordinate with all the relevant stakeholders," he stated.

Indonesia's shrimp exports to the US have jumped by an average of 4.2% from 2007 to US$559.4 million in 2011, making up 48.2% of the country's total global shrimp exports. Between January and October 2012, shipments reached US$484 million, up 4.8% on-year, accounting for 47.3% of total exports.

According to the Trade Ministry's trade safeguard director, Ernawati, potential subsidy margins proposed by the US would range between 0.75% and 18.5%, and could put a dent in the competitiveness of local shrimp.