On March 31, 2011, China requested consultations with the United States to address the determination made by the U.S. Department of Commerce to not grant offsets (a practice generally referred to as “zeroing”) in the original shrimp antidumping duty investigation and subsequent administrative reviews, and reliance on dumping calculations made without offsets in the recently completed sunset review.

The Southern Shrimp Alliance submitted comments yesterday to the United States Trade Representative that reiterate our position that the grant of offsets is not required by U.S. law and, more importantly, is not required by the agreements accepted by the U.S. government leading to the creation of the World Trade Organization (“WTO”). Accordingly, the Southern Shrimp Alliance continues to oppose the grant of offsets in these proceedings.

The impact of Commerce’s use of zeroing  in administrative reviews is minimal in this case. Widespread circumvention of the antidumping duty order has severely undermined the efficacy of the trade relief obtained by the domestic shrimp industry and has made a mockery of Commerce’s administrative review process. We are aware of no actions taken by the Chinese government to address illegal circumvention, despite the fact that in some instances these circumvention schemes evade not only antidumping duties but also regulatory controls designed to keep unsafe food products away from American consumers. Yet, despite multiple incidents of significant illegal circumvention detected and documented by U.S. government agencies, the Chinese government is taking action under the WTO that seek to remove trade relief without having to address the impact that blatantly criminal behavior has on the rules-based international trading.

To the extent that China is seeking a re-calculation of the level of dumping undertaken by certain exporters in the original investigation through these consultations, it should be noted that these calculations currently grossly underestimated the full amount of dumping of Chinese shrimp in the U.S. market.  For example, Chinese exporters argued and Commerce has accepted that:

(1) Indian seafood workers are compensated at a rate of five cents an hour; and

(2) this labor wage rate accurately and appropriately reflects the value of labor in Chinese shrimp processing facilities.

The contentions of Chinese exporters – and the acceptance of these arguments by Commerce – have largely gone unnoticed. Regardless of what happens before the WTO, these proceedings have underscored the challenges domestic shrimpers face in the marketplace.

5-2-11 Comments to USTR re: China’s request for consultations concerning shrimp antidumping measures

3-21-11 Comments to the Department of Commerce on Calculating Labor Wage Rates

2-18-11 Comments regarding Calculation of Weighted Average Dumping Margin