WASHINGTON — The Louisiana shrimp industry was dealt a blow Friday after the U.S. International Trade Commission voted against increased duties on frozen shrimp imported into the country from several nations.
In a divided 2-4 vote, the commission ruled that the Coalition of Gulf Shrimp Industry failed to present a strong enough case that the Gulf shrimp industry was unfairly suffering from cheap frozen shrimp coming in from China, Vietnam, Ecuador, India and Malaysia.
The vote was one shy of victory for the Gulf shrimp industry because a tie vote legally sides with domestic industry.
The overall argument presented during debate last month by Lt. Gov. Jay Dardenne and others is that the lower-costing frozen shrimp from foreign nations — 75 percent of the U.S. domestic consumption — competes unfairly against Louisiana and Mississippi shrimpers because the foreign industries receive extra government subsidies and can undercut the prices of domestic shrimpers and processors.
Eddy Hayes, the Gulf coalition’s legal counsel, expressed disappointment after the ruling.
“Absent relief from subsidized imports, the culture, way of life, and economic opportunity provided by the Gulf shrimp industry will continue to be in jeopardy,” Hayes said.
Once the commission releases its report and explains its ruling, Hayes said, a decision can be made to appeal to the U.S. Court of International Trade in New York.
Dardenne, whose office now includes the Louisiana Seafood Promotion and Marketing Board, said he was “surprised” by the vote and called it a “huge blow to the industry.” The Louisiana shrimp industry has a $1.3 billion annual economic impact and includes 14,000 direct and indirect jobs, according to his office.
“It’s very frustrating when an American tribunal fails to protect our businesses from clearly abusive and illegal practices from foreign governments,” Dardenne said.
Domestic shrimp prices have increased in the past year or so, and that evidence harmed the Gulf coalition’s assertions. But with temporary increased duties in place in recent months, David Veal, executive director of the Coalition of Gulf Shrimp Industry, or COGSI, argued that the increased domestic pricing strengthened their argument.
“We filed these petitions because our industry is being hammered by large volumes of subsidized shrimp imports,” Veal said in a prepared statement. “The improved pricing we have seen in the market since the imposition of provisional duties on these imports in the spring of this year confirms how important relief from these subsidized imports is to the domestic industry. While the commission did not vote in our favor today, we are not throwing in the towel on this vital issue.”
The Southern Shrimp Alliance released a statement blaming COGSI for moving forward with an effort that focused on the shrimp processors and largely left out the shrimpers and fishermen.
“Here, the thirty-odd members of COGSI pursued trade relief without seeking to build support for the request within the industry,” the Southern Shrimp Alliance statement read. “Instead, COGSI advocated for narrow definitions of the domestic shrimp industry that would have precluded the participation of various segments of the industry. In consequence, overall support for the petitions for trade relief was limited, with the vast majority of industry members declining to express any position regarding the case.”
The U.S. Commerce Department last month excluded frozen shrimp from Thailand and Indonesia from having increased tariffs and now the International Trade Commission ruling removes the higher duties on the other five nations.
Warren Connelly, who represented the foreign interests, contended the domestic shrimp prices are currently on the rise and that foreign shrimp arriving in the U.S. has decreased some, largely because of some issues with shrimp disease. Connelly argued that price is only part of the issue and that the quality of domestic shrimp is in decline.
The Commerce Department determined previously that government subsidy rates for foreign shrimp were about 18 percent in China; more than 10 percent in Ecuador; more than 5 percent in India; as high as 54.5 percent in Malaysia; as much as 7.88 percent in Vietnam; but lower than 2 percent in Thailand and Indonesia.
“There are massive illegal subsidies and there’s not a level playing field,” Hayes said.
But the commission ruling Friday determined that such subsidies were not causing enough “material harm” to the Gulf shrimp industry.
Thailand last year exported 122,000 metric tons of frozen shrimp to the U.S. that was valued at more than $1 billion. The next heaviest amount was 72,000 metric tons from Ecuador.