U.S. Shrimp Industry Wins Preliminary Determination in New Trade Cases
The U.S. International Trade Commission (ITC) unanimously ruled on December 8th that there is a reasonable indication that shrimp imported from Ecuador, India, Indonesia, and Vietnam are injuring the U.S. shrimp industry. The American Shrimp Processors Association petitioned for the investigations, and now the cases move to the U.S. Department of Commerce. Commerce will examine whether shrimp imports from Ecuador and Indonesia are unfairly dumped or subsidized and whether shrimp from India and Vietnam is subsidized.
Why This Matters
According to the ITC’s report:
- The U.S. shrimp industry has faced massive financial decline in recent years, with processors’ sales revenue dropping from $649.4 million in 2021 to $496.7 million in 2022 and a further 26.7% decline in the first half of 2023 compared to the same period in 2022.
- The domestic processing industry saw a 50% decrease in operating income between 2020 and 2022. It then experienced an 87% collapse in the first six months of 2023 compared to the previous year.
- Despite a 9% increase in domestic shrimp consumption from 2020 to 2022, the U.S. industry’s share of total consumption decreased from 7.4% in 2020 to 5.9% in 2022.
SSA Opposes Extending Free-Trade Benefits to Ecuador
In a letter to Congressional leaders, the Southern Shrimp Alliance strongly opposed the Innovation and Development in Ecuador Act of 2023 (H.R. 6414), which proposes extending free-trade benefits to Ecuador under the Caribbean Basin Trade Partnership Act. Shrimp imports from Ecuador, the second-largest source after India, increased 58.4% in volume over the last three years, contributing significantly to the challenges faced by U.S. shrimpers.
Why This Matters
- U.S. shrimp imports from Ecuador include products shipped to and processed in Liaoning, China, a region linked to the use of North Korean forced labor, before being re-exported to the U.S. as Ecuadorian products.
- Funds from U.S. taxpayers provided to the International Finance Corporation (IFC) have subsidized the development of Ecuadorian shrimp farming operations that harm U.S. shrimpers. On December 21, the IFC announced a new $20 million loan to Omarsa to boost Ecuador’s shrimp production, exacerbating the existing overcapacity.
Ecuador’s shrimp imports are under scrutiny in antidumping and countervailing duty investigations and found preliminarily to injure the U.S. shrimp industry.
USDA Buying $36 Million in U.S. Wild-Caught Shrimp
The U.S. Department of Agriculture (USDA) plans to buy up to $36 million worth of wild-caught shrimp from the Gulf of Mexico and South Atlantic, as announced by Rep. Garret Graves (R-LA) on December 20th. This decision is a response to requests from various Congressional offices, led by Rep. Graves, and a letter from Senator Cindy Hyde-Smith (R-MS) to Agriculture Secretary Tom Vilsack on December 14th.
Why This Matters
- The USDA’s purchase of domestic wild-caught shrimp is a response to the influx of cheap, unfairly traded shrimp in the U.S. market. This move helps reduce inventory and creates a market for local shrimpers to sell their catch.
- Rep. Graves stated that this will be the USDA’s fourth purchase of domestic shrimp in the last five years. It represents the USDA’s largest purchase, following previous buys of $25.1 million in 2020, $24.8 million in 2021, and $23.6 million in 2022.
SSA Opposes Treating Vietnam as a Market Economy
On December 21st, the Southern Shrimp Alliance filed comments with Commerce opposing Vietnam’s request to be treated as a market economy for antidumping and countervailing duty law. In a detailed submission spanning 724 pages, SSA argued and provided evidence that Vietnam operates as a state-controlled economy and does not adhere to market principles.
Why This Matters
- Currently, Vietnamese shrimp companies that cannot prove their independence from the government face a 25.76% antidumping duty. If Vietnam is recognized as a market economy, this duty rate would be eliminated, allowing state-owned enterprises to export to the United States again.
- Vietnam’s government continues to be controlled by Communists, is a single-party state, and recently announced deeper ties with China’s ruling Communist party. Treating Vietnam as a “market economy,” while the country remains under authoritarian, communist rule, bastardizes the concept of a market economy while strengthening China.
FDA Data: India Presents Most Significant Risk of Antibiotic Contamination in Shrimp
The U.S. Food and Drug Administration (FDA) has confirmed, in response to a Freedom of Information Act (FOIA) request from the Southern Shrimp Alliance, that India poses the most significant risk of antibiotic contamination in shrimp. The FDA’s data through November 2023 reveals increased surveillance of shrimp from Ecuador, India, and Indonesia. While domestic shrimp has never been found to contain banned antibiotics, the FDA reports that it continues to sample domestic shrimp.
Why This Matters
- The U.S. shrimp industry has continually asked the agency to allocate more resources to prevent antibiotic-contaminated shrimp from reaching American consumers.The FDA has responded by increasing its shrimp sampling program, averaging 354 samples annually in FYs 2022 and 2023 compared to 293 samples annually in FY2016 through FY2021.
- The FDA’s sampling program once again confirmed that Indian shrimp presents additional risks of antibiotic contamination. 4% of the samples taken by the FDA since FY2022 have been of Indian shrimp. In comparison, nearly half of the samples that contained banned antibiotics (48.4%) over that timeframe have come from Indian shrimp.
- Legislation introduced, known as the Laws Ensuring Safe Shrimp (LESS) Act, proposes using duties collected on shrimp imports to enhance funding for the FDA’s testing of banned antibiotics in shrimp sold in the U.S. market.