February 2003 Trade Forum

Imports, which have been dramatically increasing for more than a decade, surged another 16 percent, to $3.6 billion in 2001, and then surged again last year.

Meanwhile, prices have tanked to the 1970s level. Discouraged shrimpers are draining the bilges on their boats and bailing out of the business.

"Our backs are to the wall," says George Barisich, president of the Louisiana Shrimp Association. When I reached him on his cell phone recently, Barisich was on his boat braving an incoming tropical storm, "trying to catch a few shrimp," he explained.

So, what to do?

Barisich and the recently formed Southern Shrimp Alliance, comprising eight southern states ranging from Texas to the Carolinas, want to file an antidumping action aimed at imposing high tariff barriers on some 16 shrimp-exporting countries, mainly from Asia and Central America. In early December, the SSA hired Dewey Ballantine to investigate allegations of dumping (see Newsline story).

Will the strategy work?

Experience strongly suggests otherwise. Protectionism never works in the long run. Much like an aspirin gives temporary headache relief, protectionism can disrupt and divert trade flows, but not forever. It's like dying slowly.

The only people who get rich from protectionism are the Washington lawyers who send their children to expensive private schools from the revenues of trade cases.

Ask Louisiana crawfish producers, who received Louisiana taxpayer money to hit exporters of frozen Chinese crawfish tail meat with 100-plus percent antidumping tariffs in the late 1990s. While Chinese crawfish was supposed to be wiped out of American markets, it didn't happen. You still see the Chinese product in supermarkets, even in New Orleans.

Or ask the domestic salmon industry, which won an antidumping case against Chile in 1997. You can still buy farmed salmon fillets from Chile in supermarkets for $5 to $7 per pound, at least a couple of bucks cheaper than wild, domestic salmon.

The numbers simply aren't with domestic shrimpers, who only catch enough shrimp to supply some 12 percent of the U.S. market. The foreign competition grows its shrimp in ponds; it's like fishing in a hatchery. And even if an antidumping suit would drive 16 countries out of the shrimp exporting business, this would still leave more than 20 others who would have the incentive to rush in to capture a share of some $1.4 billion in annual U.S. revenues.

Alas, not every domestic shrimper will survive. But there will always be a thriving niche market for creative entrepreneurs who understand the attractiveness of fresh American shrimp and know how to market it.
As Wally Stevens, the president of Slade Gordon & Co. - a major purchaser of both foreign and domestic shrimp - says, his company will keep on selling as much wild ocean-caught American shrimp as it can.

Smart advice to shrimpers: Don't call your lawyer, call Wally.

Greg Rushford is editor and publisher of The Rushford Report, a Washington monthly newsletter on trade politics at www.RushfordReport.com.