April 8, 2011
 

US decreases shipments of Ecuadorian tuna due to tariffs

 

 

After the preferential tariff expired on last February, US importers decided to lessen their purchases of Ecuadorian tuna and import other tuna alternatives such as those from Thailand.

 

This change occurred when tuna in pouches (bags) produced in Ecuador, did not have to pay fees to enter the US market, began to pay a tariff of 12.5%.

 

"Pending the outcome of the renewal of the Andean Trade Preferences and Drug Eradication Act (ATPDEA), many US buyers think that we should not buy the same volumes from Ecuador that we are purchasing painfully from Thailand," said a businessman from the local tuna industry.

 

By paying a fee, the price of Ecuadorian tuna went up and lost its competitiveness relative to other products sold in grocery stores and supermarkets.

 

According to the media, although tuna from Thailand also has tariffs, it is a strong competitor because it has large government support and is produced with a lower cost of labour.

 

Executives from Empesec S.A., a tuna pouch processing firm for the American brand StarKist, indicated that since the tariff preferences expired, deliveries fell by 18%.

 

To cope with this reduction, the company agreed with its US customers to take part in the fee, in some cases up to 50% and in others the total.

 

Sources from Empesec speculate that when the renewal of the ATPDEA occurs, these taxes will be returned.

 

The company produces around 55,000 tonnes of tuna exports to the US.

 

At present, exports of tuna from Ecuador range from US$100-120 million per year.

 

According to Rafael Trujillo, director of the National Chamber of Fisheries, it is difficult to sell tuna that is not sent to the US market to other countries in Latin America. "There are many companies trying to place the product in South America and other markets," he said.
 

For her part, the Coordinating Minister of Production, Nathalie Cely, said that the tuna industry is facing a difficult situation after the ATPDEA was not renewed, since it is difficult to compete in other markets due to logistical issues.

 

Meanwhile, the president of Fedexport, Felipe Rivadeneira, warned that Ecuadorian exporters are concerned about the reduction in shipments of tuna.

 

According to Lucia Fernandez, head of the Chamber of Commerce and director of the Business Committee of Ecuador, they are even worried that there will not be a renewed interest in tariff agreements with the US government.

 

"And if you do not expedite the negotiations successfully, I wonder, what will happen to the fishing industry, which hundreds of jobs rely on," she added.

 

Furthermore, the Ecuadorian Foreign Minister, Ricardo Patino, admitted that the demand for the US Ambassador in Ecuador, Heather Hodges, to leave the country will politically and commercially affect the country.

 

The government demanded the departure of Hodges in the shortest time possible after a filtration from Wikileaks showed that the ambassador signed a cable in July 2009, according to which President Rafael Correa had appointed Jaime Hurtado Vaca as commander of the police in 2008 whilst knowing that he was easy to corrupt and manipulate.

 

"There is no doubt that the decision had an impact. I know of no haughty conduct of a government that has no consequences," he said.

 

He continued, "We have not said anything against the US government but have said that this decision has to do with the conduct of the ambassador. We hope that there are no other damages, and if there are, we must confront them."