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