Salmon trade ruling expected Friday> High tariffs on dumping could slash Chile’s sales

PUERTO MONTT, Chile — Salmopack SA, a Chilean salmon producer, could see sales tumble if the United States slaps anti-dumping tariffs on its exports in a ruling that could cripple Chile’s $550 million-a-year industry.

The Commerce Department is expected to rule Thursday on claims by U.S. fishermen that Chilean salmon producers are dumping, or selling fish below cost. The United States could impose duties of as much as 42 percent on Chilean salmon.

Commerce plans to make its ruling public Friday, with a final decision expected in May. At stake is about $111 million in sales to the United States by Chilean producers, which now supply 55 percent of the fresh salmon consumed in the United States. They expect the Commerce Department to rule in favor of U.S. fisherman.

U.S. salmon farmers said they can’t survive for more than a year without the aid of heavy duties. Chilean producers sell fresh salmon 10 percent to 25 percent cheaper than U.S. farmers.

“We’re looking at new markets but it’s pretty hard to see where,” said Pablo Aguilera, chief executive of Salmopack, a company that sells half of the fish it processes in the United States. “Any significant sanctions will hurt, no matter what.”

Heavy duties couldn’t come at a worse time for Chile’s salmon industry, located in Puerto Montt. Its best alternative market to the United Statesis Japan and other parts of Asia, but sales there are falling because of the region’s economic slump.

Michael Coursey, the lawyer for the Maine-based Coalition for Fair Atlantic Salmon Trade, an association of U.S. producers that filed the claim, said the strongest proof of dumping is in salmon prices. Surging Chilean imports sent average prices for whole salmon in the United States to $1.91 a pound last year from $5 a pound in 1991.

“Many U.S. producers have been put out of business,” Coursey said. “We think [the Commerce Department] will show that the Chileans have been dumping.”

The Chileans are resigned to losing, claiming the Commerce Department sides with U.S. interests in most dumping disputes. The U.S. government said it has sided with domestic industry in 39 percent of dumping cases.

No matter what the odds, the industry’s destiny will be in how heavy the duties will be. Duties much higher than 10 percent would put Salmopack’s U.S. sales in the red, Aguilera said.

The ruling will be based on a Commerce Department study that compares the pricing by five Chilean salmon exporters with prices they charge in an unnamed market outside the United States.

If duties are imposed on any of the five, they would be applied to the entire Chilean salmon industry.

Whatever the preliminary ruling, Commerce Department officials would travel to Chile to verify the accuracy of its probe, and could roll back duties in its final ruling. The ruling also has to be affirmed by the International Trade Commission.

Chilean government and industry officials spent six months making their case in Washington, enlisting former Senate Majority Leader Bob Dole and his law firm as high-profile lobbyists. Chile also sent several Cabinet-level delegations to lobby Washington policy makers.

Chile won the first round of the dispute in November, when the Commerce Department rejected U.S. producers’ claims that the government unfairly subsides salmon producers. They’re not so confident about this week’s decision.

“We’ve done our best to make our case, but the odds are against us winning the dumping side of the case,” said Economy Minister Alvaro Garcia.

Garcia on Friday sent a letter to Commerce Department Secretary William Daley calling the procedure for applying duties against one company to the entire industry “unjust.”