Bush accuses Vietnam and China of dumping shrimp on U.S. market
WASHINGTON - The Bush administration made a preliminary ruling on Tuesday that China and Vietnam were dumping shrimp in the United States at below market prices and proposed duties as high as 112 percent.
In the broadest trade complaint since the White House imposed tariffs on steel in 2002, the administration will issue its final decision in January. But the new duties will be levied at the end of the week and will probably lead to higher consumer prices in the long term, experts said.
At the same time, the duties and wholesale price increases could help save jobs in the South, especially in major political battleground states like North Carolina, a trade-off that the administration seemed eager to make.
Shrimp from China and Vietnam has accounted for about 25 percent of the shrimp imported into the United States this year. But the case includes four other major exporters - Brazil, Ecuador, India and Thailand. The six countries account for 75 percent of the shrimp imported into the United States, or $2.6 billion worth. Decisions on the other four countries will come later.
With Asian nations investing heavily in fish and shrimp farms, the ruling could have a significant effect on the growing seafood industry and plans for using trade to improve these developing economies. Shrimp, the most popular seafood in the United States, is dominated by foreign imports, which account for 90 percent of the shrimp consumed in the United States.
James J. Jochum, an assistant secretary of commerce, said in a telephone news conference that the ruling showed that the administration was "very aggressive in enforcing trade laws."
With the United States' trade surplus growing with China and Chinese imports being cited for the loss of more and more domestic jobs, the administration is gearing up to defend its trade record in the presidential election. Earlier this year, the administration issued a preliminary finding that led to 198 percent duties on wooden bedroom furniture from China.
The petitioners who filed the initial suit in the shrimp case last year argued that the lower-priced imports amounted to dumping and were driving down the price in the United States and undermining American producers.
"We're pleased, very pleased," said Bradford Ward, a partner at the law firm Dewey, Ballantine, who represents the Southern Shrimp Alliance. "It's very important," he said, "for coastal communities from Texas all around to North Carolina that the dumping ends and they can receive a fair price for their shrimp."
That will lead to higher prices for American consumers, said Jeffrey Schott of the Institute for International Economics.
"As a consumer I stand to lose on this because it's a simple issue of supply and demand," Mr. Schott said.
But the price increases will take some time to show up at chain restaurants or grocery stories, said Nao Matsukata, a former official at the office of the United States trade representative.
"In most cases," Mr. Matsukata said, "these things are absorbed by the industry so you won't see an immediate increase in price."
The decision on the other four nations will be announced at the end of the month. They were considered separately because, with their Communist political systems, China and Vietnam are not considered official market economies.
Thailand, the largest exporter to the United States, issued a statement earlier this year on behalf of the three other nations named in the suit warning that the domestic American shrimp industry would be unable to meet consumer demand.
And in a repeat of the arguments during the steel tariff debate, the four countries argued that their shrimp imports had created 100,000 jobs in the United States.
The preliminary investigation determined that Chinese and Vietnamese shrimp were selling at prices well below fair market value. The proposed duties vary widely, from as low as 7.6 percent to 112 percent for China and from 12.11 percent to 93.13 percent for Vietnam, depending on the difference between the fair-market price and the actual one.
The decision covers frozen and canned warm water shrimp from China and Vietnam, most raised on farms rather than caught at sea.
Fighting the duties were the Vietnamese and Chinese shrimp industry as well as a coalition of United States shrimp distributors, restaurants, grocers and food businesses.
Matthew Nicely, a lawyer at Willkie Farr & Gallagher who represents the biggest Vietnamese shrimp companies, said the decision was unfair for the Vietnamese and would raise the price of shrimp for American consumers.
"The Vietnamese are not dumping; they are not selling below market price," he said in an interview.
He argued that the Vietnamese were able to sell at prices far lower than American shrimpers because they had invested in modern technology for their shrimp farms and had lower labor costs.
"These shrimp-processing plants are an oasis in an otherwise economically depressed region," he said.
Action Aid Vietnam, a nongovernment organization, issued a report last week warning that thousands of families in rural Vietnam would lose their livelihood and "fall back into poverty" if the Commerce Department imposed the tariffs. It added that the duties would lead to higher prices and less demand for Vietnamese shrimp.
But officials at the Southern Shrimp Alliance, which initiated the complaint, argued that while the wholesale prices for shrimp have dropped 40 percent since 2000, the price for shrimp at restaurants has risen 18 percent, with the profit going to middlemen like shrimp distributors and chain restaurants.
By Elizabeth Becker - The New York Times - July 06, 2004.
Vietnam protests U.S. shrimp dumping duties
HO CHI MINH CITY & BEIJING - Vietnam voiced anger on Wednesday at an initial U.S. ruling to slap anti-dumping duties of up to 93.13 percent on shrimp exports, saying its prices were fair and did not jeopardize U.S. jobs.
The U.S. Commerce Department's preliminary decision to impose hefty duties on shrimp imports from Vietnam and China came after southern U.S. shrimpers accused the two countries of selling pond-raised shrimp in the United States at below-market prices.
"VASEP vehemently protests the preliminary ruling by the DOC in the anti-dumping suit," the Vietnam Association of Seafood Exporters and Producers said in a statement late on Tuesday.
"The unjust decision by DOC will have an adverse impact on the livelihood of millions of shrimp farmers in the coastal areas and thousands workers in shrimp processing factories in Vietnam as well as causing direct damages to shrimp consumers," it said.
The proposed duty of 93.13 percent would affect an estimated 64 percent of Vietnam's shrimp exports, the Vietnam Shrimp Exporters Association said.
"We are going to fight until the end," association president Nguyen Van Kich told Reuters. The group had contacted its lawyers to file an appeal, he said.
The U.S.-Vietnam Trade Council that promotes trade between the two countries called the decision an enormous disappointment.
"This is shockingly high," said council president Virginia Foote.
The duties will be up to 93.13 percent on shipments from Vietnam and 112.81 percent for Chinese imports, the Commerce Department said in a preliminary ruling.
A final decision will not be made until November.
China had no immediate comment but a commerce ministry official said it might issue a statement later in the day.
Blow to Vietnam
Fishery products, including shrimp, rank as communist Vietnam's fourth-biggest earner after crude oil, garments and footwear.
Shrimp exports to the United States rose seven-fold between 1998 and 2002, when shipments reached $470 million. They were estimated to have exceeded $500 million in 2003.
U.S. consumers could see a price hike of about 44 percent if the duties on shipments from China, Vietnam and four other targeted countries -- Thailand, Brazil, India and Ecuador -- take effect, said Wally Stevens, president of the Shrimp Task Force.
The group is an alliance of seafood distributors, restaurants and consumer groups that opposes penalties against shrimp imports.
Vietnam's VASEP said the action would in fact threaten thousands of U.S. jobs related to the shrimp import sector.
U.S. shrimp imports from all six countries reached $2.7 billion in 2003, of which China shipped $419 million and Vietnam provided $588 million worth.
Americans ate more shrimp in 2002 than any other kind of seafood, including canned tuna, said the U.S. Commerce Department.
Foreign competitors deny wrongdoing, saying they are simply more efficient than the U.S. industry, which mostly harvests shrimp from the sea.
The shrimp tiff is the second anti-dumping lawsuit that Vietnam has faced with the United States, following similar action against its exports of frozen catfish fillets last year that resulted in tariffs of up to 64 percent. (Additional reporting by Nguyen Nhat Lam in Ho Chi Minh City, Cher Gao in Beijing, Nichola Groom in New York and Richard Cowan in Washington)
Reuters - July 07, 2004.
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