January 19, 2007

 

Shrimp trade pits US shrimp industry against Asian shrimp exporters

 

As US shrimp farmers and associations protest the influx of Asian shrimps to the US, Asian shrimp farmers and liberalists are petitioning the WTO to open its markets in the name of fair trade.
 
In an effort to protect US shrimp farmers the US government set up an Ad Hoc Shrimp Trade Action Committee.

In December 2003 it complained to the World Trade Organisation that the US industry was being materially injured by frozen or canned warm water shrimp from Asian and Latin American countries because the shrimp was selling at prices below fair value.

The complaint was upheld and, as a result, the US was able to impose import duty and protect its domestic shrimp market.

In Thailand, the US import duties have added to an existing ban, upheld in part by the WTO, on wild shrimp caught by Thai fishermen who did not use turtle excluders on their nets. Thailand was the biggest supplier to the US but the result so far has been a 43 per cent drop in the country's shrimp exports to the US in the first quarter of 2005.

 

The situation in countries such as Thailand and India is made even worse for small farmers because the industry is controlled by large multinationals such as Thailand's Charoen Pakphand, and Mitsubishi of Japan.

In recent months India and Thailand have accused the US of using anti-dumping measures to shield US shrimp farmers from cheaper, more competitive imports. They argue that they cannot be accused of 'dumping' on the grounds that their shrimp are legitimately cheaper than those in the US.

 

According to Brian Marks, a geographer at the University of Arizona, the anti-dumping duties have been effective in reducing imports and raising prices.

An industry report argues that a relatively small number of well-organised US farmers are being protected at the expense of Thai and Indian shrimp farmers who are far poorer than their US counterparts.

 

The report also says that since 90 per cent of shrimp consumed in the US is imported, US consumers could be hurt by the higher prices induced by the anti-dumping duty.

 

India and Thailand said the US's protectionist stance contradicts its espousal of free trade.

 

There are also US academics who do not think the anti-dumping duty is the ultimate solution and argue that instead of duties, quotas and floor prices should be adopted, as that currently practiced in the textile industries.

Even US fishermen agree that the dumping duties are not necessarily helping. 

 

Tariffs have raised prices paid to fishermen less than 10 per cent on average, not enough to compensate for the 25 per cent drop over the last eight years. 

 

Still, the Southern Shrimp Association, the most powerful organisation in the Ad Hoc Committee has avoided discussion of such quotas and floor prices. Disgruntled parties said the continued cashflow from the Byrd Amendment, which awards the money from the anti-dumping duties to SSA to distribute to the US shrimp industry, ensures that it would not want to rock the boat.

 

While the affected nations plan to contest the US anti-dumping measures at the WTO ministerial meeting in Hong Kong, solutions may not be forthcoming.

Instead, negotiators from some of the industrialised nations are pushing hard to open global trade further by removing duty and tariffs within fishing as part of Non-Agricultural Market Access (NAMA) proposals.

 

The FAO has refused to examine how proposed NAMA rules would affect wild fisheries, though Japan warns that by opening up more markets, NAMA would increase overfishing of some species, risking further resource declines.

 

Brian Marks is worried that if NAMA proposals are accepted it will have a negative impact on quality and sustainability.

At the same time, small fishermen from South-east Asian countries are protesting on the streets of Hong Kong, demanding better protection and calling for the WTO to take further liberalisation of fisheries off the agenda.

Liberalisation, they say, will benefit commercial fishing operations and bring greater hardship to poor independent fishermen, pitting them against their counterparts from the US, Mexico, southeast Asia and India.