June 22, 2006

 

Asian shrimp companies lining up to line SSA's pockets

 

 

Asian shrimp companies exporting shrimps to the US are lining up to pay US's Southern Shrimp Alliance a portion of their sales proceeds to avoid a review of the anti-dumping duty.

 

Southern Shrimp Alliance had filed a complaint with the Department of Commerce earlier, alleging that shrimp duties on foreign shrimp are too low and hurting US shrimp producers.

 

Shrimp producers have disputed the claim and The Department of Commerce would be presiding over a review of shrimp duties to begin soon.

 

Not only could court hearings for a review of the shrimp duties result in higher duties it may also apply retroactively.

 

The review process could also take about a year, thus making settlement out of court a favoured choice for many companies.

 

Thailand's largest shrimp exporter, CP Foods denied making any payments to the US's Southern Shrimp Alliance as part of a settlement.

 

However, news reports indicate that CP Foods and Thai Union Frozen Products offered to pay SSA a percentage of their US sales to avoid the review process. At least six other Thai companies are hoping to make similar deals.

 

News reports also indicate that the SSA made similar deals with dozens of companies in other countries facing the penalty.

 

Vietnam's media reported that 19 Vietnamese shrimp companies settled with the SSA, agreeing to pay the US shrimp companies two percent of total sales from the past two years.

 

The Byrd Amendment, which allows duties collected from foreign shrimp companies to be given to affected companies, expires next year. Upon expiration, duties collected would go to the US government instead of the damaged parties.

 

The SSA is thus accused of making a last-minute money-grab before the law expires.

 

SSA spokeswoman Deborah Long told the Norway-based trade journal IntraFish that SSA did not initiate the negotiations but added there are mutual benefits to such an arrangement.