The End of Globalization?

1
The End of Globalization?

• The Emergence of Protectionism in the U.S.
  Seafood Market

2
U.S. Seafood Imports Have Doubled in the Past 15
Years
3
While Domestic Production Has Remained Relatively
Stable
4
Domestic Producers Are Suffering

• Fishery specific
• Increasing Costs of Operation
• Increased Labor Costs
• Increased Capital Costs
• Increased Conservation Burden
• Decreased Resource Availability

5
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

6
U.S. Tariffs are low and will likely decrease
further

• Average lt2
• 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

7
In the absence of tariff protections

• Antidumping
• Crawfish
• Salmon
• Catfish
• Shrimp
• P.E.I. Mussels
• Northern Shrimp
• Countervailing Duties
• Salmon
• Section 201
• Blue Crab

8
SHRIMP
9
Gulf of Mexico Shrimp Farmers Calling for
Antidumping Investigation

• Dont appear capable of raising funds necessary
  to file an antidumping case

10
CATFISH
11
Domestic Catfish Industry Called for Antidumping
Investigation

• Dont appear capable of raising funds necessary
  to file an antidumping case

12
SALMON
13
Domestic Salmon Industry has tried antidumping in
the past

• Unsuccesful

14
OTHERS

• Crawfish antidumping duties of 200 imposed
• P.E.I. Mussels case settled
• Blue Crab couldnt raise funds, filed Section
  201 instead, unsuccessful
• Northern Shrimp fishermen want to file,
  processors resisting

15
CRAWFISH
16
TRENDS?

• Most Cases Dont Win
• Those that do dont curb the flow of imports

17
In the absence of procedural relief, domestic
producers are seeking political solutions
18
Nontariff Trade Barriers

• Non-science-based nomenclature rules
• Sanitary/Phytosanitary
• Country of Origin Labeling
• Wild vs. Farm-raised labeling

19
All Politics is Local

• The Late Tip ONeal
• U.S. House of Representatives
• Former Speaker of the House

20
CATFISH

• Mississippi Alabama vs. National Policy
• Senator Thad Cochran
• Ranking Member Senate Agriculture
  Appropriations Subcommittee
• Senator John McCain
• Presidential candidate
• Maverick politician

21
ISSUE

• Statutory Prohibition on the use of the term
  catfish for anything other than North American
  catfish of the family Ictluridae

22
PROBLEM?

• There are hundreds of species, 35 families in the
  Order Suliformes, the order of CATFISH

23
Science vs. Politics on the Floor of the U.S.
Senate

• The Senate voted 64-32 to keep the prohibition!

24
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

25
Shrimp

• Looking at unapproved aquaculture drug issue as
  possible means of relief

26
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

27
Mandatory Country of Origin Labeling (cont.)

• Driven by
• Alaskan Salmon
• Mississippi Catfish
• Gulf of Mexico/South Atlantic Shrimp

28
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

29
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