April 2004 Trade Forum

"The real cause of “injury” to American shrimpers is that they entered the 21st century unprepared to compete in a changed global marketplace."

Predicting the outcome of hotly contested litigation is always risky. But it doesn’t take a crystal ball to glimpse the outcome of the antidumping case that the Southern Shrimp Alliance filed Dec. 31, 2003, against six foreign shrimp countries. The SSA, a coalition of domestic shrimp interests from North Carolina to Texas, is seeking tariffs as high as 200 percent on farmed shrimp imported from Thailand, China, Vietnam, India, Ecuador and Brazil.

The outcome of this one is easy to call: The U.S. shrimp industry will win the case, but the “victory” will be short-lived.

For the domestic shrimpers to win their case, two things will happen. First, the U.S. Commerce Department has to agree that the foreigners have been grabbing U.S. market share by dumping their shrimp at unfairly low prices. Commerce will certainly agree — not because the foreigners are really selling their shrimp below cost, but because the U.S. antidumping laws give the bureaucrats broad discretion to almost always find accused foreigners guilty.

Second, at least three out of the six politically appointed commissioners who sit on the U.S. International Trade Commission must vote that the petitioning U.S. industry has been injured because of the dumped imports. Again, this is almost routine.

While petitioning Americans always claim that they are only seeking a “level playing field,” the truth is that the antidumping laws have an anti-foreign bias — a political bias, to be blunt.

In the shrimp case, each side happens to have strong arguments. If the laws weren’t rigged against foreigners, this case could go either way.

Lawyers for the domestic shrimp industry cite compelling statistics to show that skyrocketing imports have devastated their clients. Prices have tanked, dropping from over $5 per pound in 2000 to perhaps $1.50 last year. American shrimpers are truly desperate.

But lawyers for the American Seafood Distributors Association, whose 75 members sell foreign shrimp to grocery stores and restaurants nationwide, rightly argue that they can’t buy all the shrimp they need domestically. There simply aren’t enough wild shrimp to be caught in U.S. coastal waters to supply the national demand.

The Asians and Latin Americans, with their modern aquaculture, supply perhaps 90 percent of the shrimp that Americans eat and clearly have the competitive advantage. The real cause of “injury” to American shrimpers is that they entered the 21st century unprepared to compete in a changed global marketplace.

Tariffs won’t work. Even if the six targeted shrimp exporters were knocked out of the U.S. marketplace, there are a dozen others waiting to grab the business.

To survive, the domestic shrimpers — whose idea of marketing remains stuck in the mid 20th century — must learn to change. But who will help them?

I believe the key is in the hands of ASDA members, who are experts in modern marketing techniques. Alas, only a handful of these seafood companies have yet given more than lip service to the idea of lending struggling American shrimpers a helping hand.

The only hope for the revival of the domestic shrimp industry is for all involved parties — fishermen, processors, distributors, grocers and restaurants — to learn to work together. Alas, the crystal ball on this scenario is cloudy.

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