Posted on: Tuesday, December 21, 2004

U.S. places tariff on foreign shrimp

By Charles Homans
Knight Ridder News Service

WASHINGTON — Shrimpers from Brazil, India, Thailand and Ecuador dumped their product illegally on the American market and must pay tariffs if they want to keep selling to the United States, the Commerce Department ruled yesterday.

The duties for Ecuador, India and Thailand were similar to the preliminary duties the department announced in July, while Brazil's were about 26 percent less than expected.

Nevertheless, some importers suggested that the Commerce Department's decision could increase the price Americans pay for shrimp at the grocery store.

The Southern Shrimp Alliance, which represents shrimpers in Alabama, Florida, Georgia, Louisiana, Mississippi, North Carolina, South Carolina and Texas, lauded the action. It had petitioned the Commerce Department last December for an anti-dumping investigation of foreign shrimp exporters.

The investigation targeted six countries: China, Vietnam, Brazil, Ecuador, India and Thailand. Dumping — selling a product below the cost of its production — is illegal in the United States, and is punished with tariffs to put law-abiding companies on equal footing.

The Commerce Department found evidence of dumping by all six countries, and imposed the first round of final determinations on China and Vietnam on Nov. 30.

If the International Trade Commission finds evidence of injury to American shrimpers as a result of the dumping when it completes its investigation in January, the tariffs will go into effect.

Foreign exporters argued that they simply produced shrimp more efficiently and cheaply than their American counterparts. Most American shrimp is caught from trawlers operating in the south Atlantic Ocean and Gulf of Mexico, but the vast majority of imported shrimp is produced on shrimp farms.

The Commerce Department ordered countrywide tariffs of 3.26 percent for Ecuador, 9.45 percent for India and 6.03 percent for Thailand. Brazil, which was handed a 10.4 percent tariff in lieu of the 36.9 percent suggested in the preliminary determination, got a pleasant surprise.

Three individual companies in each country were given their own rates, ranging from 2.35 percent to more than 60 percent, depending in part on the degree with which each company complied with the investigation.

One Brazilian company, Norte Pesca, was hit with a 67.8 percent tariff after it withdrew from participating in the investigation, Assistant Commerce Secretary James Jochum said.

Ernie Wayland, the executive vice president of sales for the New York office of seafood importer Rubicon Resources, said he foresaw no disruption in supply but expected prices to go up.

"What that will amount to remains to be seen. Nobody in our industry has ever been down this road," said Wayland, whose company imports the majority of its shrimp from Thailand. Thailand is the biggest exporter to the United States.

Some seafood analysts saw little probability of big price increases, however, noting that prices have changed little since the Commerce Department announced tariffs for China and Vietnam last month.