U.S. proposes shrimp-import tariffs

NEW ORLEANS – The Bush administration proposed tariffs Thursday on shrimp imports from four of the largest shrimp-producing nations in Asia and South America, accusing them of hurting domestic producers by dumping the shellfish on the U.S. market at artificially low prices.

The proposed tariffs against Brazil, Ecuador, India and Thailand ranged from 4 percent to 68 percent – far smaller than what Southern shrimpers and processors had sought.

Although the ruling was preliminary, it will probably stand. The Commerce Department will make a final decision by December and the U.S. International Trade Commission will decide in February if imports have damaged the domestic industry, a finding it has already issued in a preliminary ruling.

The ruling, released in Washington, came three weeks after the Commerce Department proposed tariffs on China and Vietnam.

In all, the six countries provide about 75 percent of the shrimp Americans eat.

“I hope that the shrimpers who brought this case will feel vindicated,” said James Jochum, assistant commerce secretary for import administration. But he said it was unclear if the duties would have an “immediate benefit to the shrimpers.”

Southern shrimpers said the action was a mixed victory.

“We commend the Department of Commerce for imposing antidumping duties, but feel that in certain instances the duties underestimate the seriousness of the violations,” said Eddie Gordon, the president of the Southern Shrimp Alliance, an eight-state group that paid for the petition.

The shrimp alliance has said dumping cut the value of the U.S. harvest by more than half between 2000 and 2002, from $1.25 billion to $560 million.

Opponents of tariffs say duties could drive shrimp prices up and do little to boost a domestic industry unable to meet the country’s demand for shrimp. They contend the dumping charges were exaggerated. All four countries have denied the charges.

“The only thing I can say is that the gap between the allegations and the reality are significant,” said Warren Connelly, a trade lawyer for Ecuador.

The tariffs proposed Thursday varied according to each country’s sales and production costs. Brazilian exporters faced the stiffest duties, at up to 68 percent. The Southern shrimpers had sought duties ranging up to 349 percent for Brazil and between 57 percent and 166 percent for the three other countries.

“This is not dumping,” said Itamar Rocha, president of the Brazilian Shrimp Farmers Association. “What we have are good Brazilian entrepreneurs who identified a market and built businesses to supply the demand.”

Rocha said the association will soon map out its legal strategy to contest the decision. Brazil’s Foreign Ministry said the government will study ways to challenge the proposed tariffs with the 147-nation World Trade Organization.

Starting next week, importers will begin paying cash deposits and bonds to U.S. Customs to cover the duties, which could affect shrimp prices.

Granvil Treece of the Texas Sea Grant Program at Texas A&M University said the domestic industry is clearly distressed, but expressed doubt the tariffs would save it.

“There is a crisis. You have people going out of the industry who have been in it for years,” Treece said.

“The industry hopes the tariffs will raise the prices, but the retail prices have been increasing since 2000,” he said. “That tells me that the imports will keep flowing in even though they will keep levying heavy tariffs.”

For example, he said, Indonesia and Mexico may be two countries that increase production and exports to meet demand. He said, “The problem is that other countries will step in and fill the void.”

Southern shrimpers and processors filed the antidumping petition in December, alleging that their industry was on the brink of destruction because of a flood of cheap shrimp.

Exporters and importers accuse the Bush administration of protectionism. They argue that booming U.S. demand for shrimp and a burgeoning shrimp farming industry are behind the rise in imports – not dumping.

But the shrimp alliance says the problem started in 2001 when Europe and Japan began blocking imports of farm-raised shrimp because of concerns of unhealthy levels of antibiotics. Also, shrimpers charge that shrimp farming has exploded only because of subsidies by the World Bank and national governments.

The eight states that make up the Southern Shrimp Alliance are: Alabama, Florida, Georgia, Louisiana, Mississippi, North Carolina, South Carolina and Texas.