the end of globalization? the emergence of protectionism in the u.s. seafood market

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

0

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