Continuous Bonding Requirements Necessary to Enforce U.S. Trade Laws
Tarpon Springs, FL—A World Trade Organization dispute panel severely weakened the United States’ ability to ensure full payment of U.S. import duties in recent rulings against the U.S. enhanced bond requirements on shrimp imports from Thailand and India. The WTO determinations effectively prevent the United States from taking steps to ensure collection of duties owed. The rulings require the United States to meet an impossible standard to justify enforcement of our trade laws and would significantly weaken trade relief on dumped shrimp imports. In a March 12 letter, the Southern Shrimp Alliance strongly urged United States Trade Representative (USTR) to appeal the WTO rulings.
“The WTO panel decisions are a significant barrier to enforcing U.S. trade laws because they severely restrict U.S. efforts to collect duties owed on unfairly traded imports,” explained John Williams, executive director of the Southern Shrimp Alliance. “USTR now has the simple decision between appealing the unreasonable WTO decisions or acquiescing to circumvention of U.S. trade laws by importers.”
Since 2001, U.S. Customs and Border Protection (CBP) has been unable to collect nearly $1 billion in duties owed on a wide spectrum of unfairly traded products. In response to the widespread refusal by importers to pay duties, CBP took action to ensure that these duties would be collected on shrimp imports by requiring reasonable security from importers of unfairly traded goods.
Under the enhanced bond requirements, adopted by the CBP in July 2004, exporters subject to antidumping duties were required to maintain bonds equal to the amount of estimated duties they would owe on unfairly traded imports in a year’s time. Parties were allowed to demonstrate that they do not pose a risk of underpayment to reduce their enhanced bond requirement. CBP has already granted numerous reductions.
The enhanced bonding program has been remarkably successful with respect to shrimp imports. In total, less than 15% of duties on shrimp have gone uncollected. In contrast, since 2003, nearly 40% of duties owed on all products — and over 71% of duties owed on agriculture/aquaculture products — subject to trade orders have not been collected.
“The enhanced bonding requirements have been vital for this industry,” stated Williams. “The U.S. shrimp industry met all legal requirements to obtain trade relief. The thought that the relief we fought for could be lost because the WTO determined importers must be allowed to violate our laws without consequences is offensive.”
SSA is an alliance of the U.S. warmwater wild shrimp fishery from eight states: North Carolina, South Carolina, Georgia, Florida, Alabama, Mississippi, Louisiana and Texas. For more information on the SSA, please visit shrimpalliance.com.
Read SSA’s March 12 letter to USTR
Read the WTO’s ruling on continuous bonding