U.S. Shrimpers Haul Cash From Lower-Cost Rivals

The Fish Site
by The Fish Site
3 April 2007, at 1:00am

US - For the better part of three decades, John Williams made a good living netting shrimp from the Gulf of Mexico. These days, he is landing a different catch: cash payments from foreign rivals.

Mr. Williams, executive director of the Southern Shrimp Alliance, co-founded the group in 2002 to help American shrimp fishermen fight competition posed by cheap, pond-raised shrimp from Asia and Latin America. The alliance petitioned the U.S. government to slap tariffs on shrimp imports from six countries at the end of 2003, arguing they were dumping crustaceans in the U.S. at unfairly low prices.

But after winning the case -- which both raised tariffs and eventually netted $100 million in compensation for U.S. shrimpers -- Mr. Williams and his alliance wanted even more. With the help of their New York law firm, the shrimpers filed a special appeal with the U.S. government that threatened the overseas shrimp producers with even higher tariffs. The action spooked more than 100 foreign shrimp suppliers into paying millions of dollars to the U.S. shrimp alliance in return for its promise to drop the action.

The alliance says it is using the money to help the U.S. industry recover from a flood of cheap imports. The payouts have funded lawyers to spearhead trade actions and pay lobbyists to rally government support for the industry, among other priorities.

"We now have a voice we never had before," Mr. Williams says.

Sparking a Fight

The practice has sparked a fight over the shrimp alliance's winnings, as well as concern that U.S. shrimpers unjustly exploited laws designed to protect domestic businesses from unfair trading practices. "We know it's unfair, but have to play the game," said Vuong Quang Khanh, head of international sales for Can Tho Import Export Seafood Joint Stock Co., a Vietnamese shrimp exporter that says it paid $68,000 to the shrimp alliance.

Dan Ikenson of the Cato Institute, a free-market think tank, says, "There's something unseemly about the domestic industry extorting large sums of money from foreign shrimp producers."

For nearly 100 years, U.S. law has protected domestic businesses from aggressively low-priced imports. Current law allows domestic businesses to seek tariffs to mitigate the price advantages of foreign competitors when they ship to the U.S. at below production costs in order to grab market share.

More controversial is the Byrd amendment, which since 2000 has enabled the government to funnel antidumping tariffs to U.S. companies that had complained about low-priced imports. That law is set to be abolished in October, because the World Trade Organization said it punished exporters twice, hitting them with tariffs and then handing over the money to rivals.

Critics fear the shrimp alliance's tactics will point the way for other enterprising U.S. industries to win payments from overseas competitors, even after the Byrd amendment expires.

Source: Truth about Trade & Technology