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The End of Globalization?
The Emergence of Protectionism in the U.S. Seafood Market
U.S. Seafood Imports Have Doubled in the Past 15 Years
0
2
4
6
8
10
12
1984 1987 1990 1993 1996 1999
Seafood Imports (US $Billions)
While Domestic Production Has Remained Relatively Stable
0
0.5
1
1.5
2
2.5
3
3.5
4
1991 1993 1005 1997 1999
U.S. CommercialLandings (US $Billions)
Domestic Producers Are Suffering
• Fishery specific
• Increasing Costs of Operation– Increased Labor Costs– Increased Capital Costs– Increased Conservation Burden– Decreased Resource Availability
Domestic Producers Perceive an Unlevel Playing Field
• Shrimp– Wild-caught vs. wild-caught: turtles– Aquaculture vs. aquaculture: drugs– Wild-caught vs. aquaculture: costs
• Catfish– Aquaculture vs. aquaculture: labor & land
• Salmon• Wild-caught vs. aquaculture: product form, costs &
seasonality• Others: Crawfish, Mussels, Blue Crab, Northern Shrimp
U.S. Tariffs are low and will likely decrease further
• Average <2%
• U.S. seeking zero for zero tariff reductions in WTO round
• Freed Trade Agreement of the Americas
• U.S. – Chile Free Trade Agreement
• U.S. – Singapore Free Trade Agreement
In the absence of tariff protections…
• Antidumping
– Crawfish
– Salmon
– Catfish
– Shrimp
– P.E.I. Mussels
– Northern Shrimp
• Countervailing Duties
– Salmon
• Section 201
– Blue Crab
SHRIMP
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0.5
1
1.5
2
2.5
3
3.5
4
1989 1991 1993 1995 1997 1999 2001
Shrimp Imports (US $Billions)
Gulf of Mexico Shrimp Farmers Calling for Antidumping
Investigation
• Don’t appear capable of raising funds necessary to file an antidumping case
CATFISH
0
5
10
15
20
25
1989 1991 1993 1995 1997 1999 2001
Catfish Imports (US $Millions)
Vietnamese CatfishImports (US $Millions)
Domestic Catfish Industry Called for Antidumping Investigation
Don’t appear capable of raising funds necessary to file an antidumping case
SALMON
0
100
200
300
400
500
600
700
800
900
1989 1991 1993 1995 1997 1999 2001
Salmon Imports (US $Millions)
Domestic Salmon Industry has tried antidumping in the past
Unsuccesful
OTHERS
• Crawfish – antidumping duties of 200% imposed
• P.E.I. Mussels – case settled
• Blue Crab – couldn’t raise funds, filed Section 201 instead, unsuccessful
• Northern Shrimp – fishermen want to file, processors resisting
CRAWFISH
0
1000
2000
3000
4000
5000
6000
1989 1991 1993 1995 1997 1999 2001
Crawfish Imports(Thousand kilos)
TRENDS?
• Most Cases Don’t Win
• Those that do don’t curb the flow of imports
In the absence of procedural relief, domestic producers are
seeking political solutions
Nontariff Trade Barriers
• Non-science-based nomenclature rules
• Sanitary/Phytosanitary
• Country of Origin Labeling
• Wild vs. Farm-raised labeling
“All Politics is Local”
The Late “Tip” O’Neal
U.S. House of Representatives
Former Speaker of the House
CATFISH
• Mississippi & Alabama vs. National Policy– Senator Thad Cochran
• Ranking Member – Senate Agriculture Appropriations Subcommittee
– Senator John McCain• Presidential candidate
• Maverick politician
ISSUE
Statutory Prohibition on the use of the term “catfish” for anything other than North American catfish of the
family Ictluridae
PROBLEM?
• There are hundreds of species, 35 families in the Order Suliformes, the order of CATFISH
Science vs. Politics on the Floor of the U.S. Senate
The Senate voted 64-32 to keep the prohibition!
Unintended Consequences
• Target was Vietnamese Catfish
• Now being called Basa, enjoying a price premium and imports continue unabated
• Icelandic ocean catfish now being sold as Atlantic wolffish
Shrimp
Looking at unapproved aquaculture drug issue as possible means of relief
Mandatory Country of Origin Labeling
• Effective in 2004
• All fish and shellfish
• Ingredients in a processed food item exempt
• Retail level
• Must also identify as either “wild-caught” or “farm-raised”
Mandatory Country of Origin Labeling (cont.)
• Driven by:– Alaskan Salmon– Mississippi Catfish– Gulf of Mexico/South Atlantic Shrimp
Mandatory Country of Origin Labeling (cont.)
• Premised on perceived preference of U.S. consumers for U.S. products
• Premise is suspect – U.S. consumers may be more driven by price
• Consumers may actually prefer foreign goods (Norwegian salmon, for example)
• If so, labeling will afford little protection
CONCLUSIONS
• U.S. domestic producers will continue to seek political remedies
• Remedies will continue to be unsuccessful or only partially successful
• With each failure, the stakes get higher
• Could lead to a return to tariffs and/or government subsidies