Gridlock in the global shrimp trade

The Fish Site
by The Fish Site
15 January 2007, at 12:00am

GLOBAL - Every winter, large concentrations of female shrimp, Pandalus borealis, crawl towards the cold waters of the western Gulf of Maine, off the northeast coast of the United States. Having spent the first two years of their lives as males their orange bodies are now heavy with bright turquoise eggs as they move towards the shore to spawn.

Waiting for the shrimps are the fine mesh nets of fishing boats scooping up several hundred pounds in each two-hour trip. Between the 1960s and the mid '80s, the New England shrimp industry couldn't satisfy demand, with shrimp stocks never yielding more than 9,000 tons. This meant shrimp could fetch a price as high as US$1.30 a pound.

But in 1986 the price slumped: the Maine shrimp were heading to market as usual when shrimp from Ecuador were imported and sold at half that price. Since then, the small US industry has declined. "We won't even go this year," says Brad Hall, long time captain of the Irene Alton, an 18-metre boat. "Ain't worth it."

For the shrimp fisheries off the south coast of the US, which drive the economies of many Gulf of Mexico communities and supply over 90 per cent of the US domestic shrimp product, the impact of the increase in foreign imports has been more severe.

"About 15 years ago our catches went down but the price stayed flat," says Margaret Curole, wife of a shrimper based in Galliano, Louisiana. "We knew something was wrong. But we didn't know what."

The new wave of shrimp imports has also badly hit the vast majority of Mexican shrimp fishing communities along the Gulf of Mexico who normally sell on the US market. They too were unable to compete with the new lower prices.

In an effort to protect US shrimp farmers the US government set up an Ad Hoc Shrimp Trade Action Committee. In December 2003 it complained to the World Trade Organisation that the US industry was being materially injured by frozen or canned warm water shrimp from Brazil, China, Ecuador, India, Thailand, and Vietnam because the shrimp was selling at prices below fair value.

The complaint was upheld and, as a result, the US was able to impose import duty and protect its domestic shrimp market.

"Such duties are regulated by the WTO Agreement on Anti-Dumping, which allows members to impose taxes on imports if an investigation shows that the imports are being sold in the importing country at a price below the cost of production in the exporting country," according to reports of the International Centre for Trade and Sustainable Development (ICTSD) a non-profit organisation concerned with the impacts of international trade on sustainable development.

In Thailand, the US import duties have added to an existing ban, upheld in part by the WTO, on wild shrimp caught by Thai fishermen who did not use turtle excluders on their nets. Thailand was the biggest supplier to the US but the result so far has been a 43 per cent drop in the country's shrimp exports to the US in the first quarter of 2005.

Source: The New Nation