HANOI - Pity the US
shrimp industry. Over the past decade, shrimp have
evolved from a delicacy only the rich could afford to
the most popular seafood in America. The problem is,
trawlers in the Gulf of Mexico can only catch 10% of the
country's demand. The rest comes from imports, and the
230 US companies joined together in the Southern Shrimp
Alliance, feel that is unfair.
On December 31,
2003, the eight-state alliance filed a US$2.4 billion
anti-dumping petition with the US Department of Commerce
and the International Trade Commission against
farm-raised shrimp from China, India, Thailand, Vietnam,
Brazil and Ecuador. (A seventh country, Mexico, was not
included in the suit after reportedly making a $1.3
million payment directly to the alliance.)
The
alliance claimed that the six countries that export
shrimp to the US had dumped shrimp on the US market at
below-cost prices, triggering a plunge in the value of
US-harvested shrimp from $1.25 billion in 2000 to $559
million in 2002.
The Department of Commerce will
make a preliminary ruling on the case in July. But in
order to impose punitive tariffs on imported shrimp, the
government needs to prove that imports have caused harm
to the US industry and are being sold in the US market
under cost.
Neither claim stands up to the
evidence. Higher tariffs on imported shrimp would
benefit 13,000 people employed in domestic shrimp
production - but hurt 250,000 other American workers
involved in the distribution, sales, and service
sectors.
Imported shrimp do cost less, for the
simple reason that production costs in developing
countries are lower than in the US. Shrimp farmers in
poorer countries, the majority of whom are private
entrepreneurs, depend on export markets to lift their
families out of poverty. If they sold their products
below cost, they would have no way to survive. Nguyen
Thi Hong Minh, a bright and energetic woman who serves
as Vietnam's vice minister of fisheries, points out that
"shrimp farming has helped improve the standard of
living for 3 million Vietnamese in a short period of
time".
The companies in the Southern Shrimp
Alliance aim to capture these gains for themselves using
a 2000 US law, the Continued Dumping and Subsidy Offset
Act, also known as the Byrd Amendment. The act provides
for duties collected by US customs officials in
anti-dumping cases to be paid directly to US producers.
Each company involved in the petition would receive up
to an estimated $1 million in payouts from dumping
duties: a direct transfer from Third World farmers to
the US shrimp industry.
This is corporate
welfare at its most crass, but the alliance is finding
support in unlikely places. A campaign by Ralph Nader's
consumer advocacy group, Public Citizen, attacks
imported farm-raised shrimp for destroying mangrove
forests, ruining coastal environments and benefiting
multinational corporations. Public Citizen blames
"international development institutions [that] are
bankrolling the conversion and privatization of coastal
areas to the detriment of the environment and citizens".
On the contrary, local entrepreneurs entering
the shrimp business in Vietnam are acutely aware of the
environmental risks that, if not carefully managed,
could wipe out their investment. They also know that
only clean, high-quality shrimp will attract buyers in a
competitive market. According to Nguyen Thi Hong Minh,
reforestation has reversed the decline of mangroves in
the Mekong Delta, as farmers "realize that it is in
their long-term interests ... to keep 70% of the
existing forested area intact and use the remaining 30%
for shrimp farming".
Vietnam's government is
worried about both the potential economic impact of
shrimp tariffs and the negative political precedent. "We
went to great lengths to sign a bilateral trade
agreement with the US [in 2000]," a Vietnamese Embassy
official said recently in Washington. "But now almost
every product that we sell successfully in the US market
has come under restrictions. First catfish, then quotas
on textiles, and now shrimp. It seems that the trade
agreement is a useless piece of paper."
The
rules of the global economy, as enshrined in the World
Trade Organization, are already tilted in favor of the
strong over the weak. Unfair trade practices enabled by
US anti-dumping laws deepen the injustice, taking away
from the baby shrimp to give to the jumbo. It's no
wonder that the Vietnamese smell something fishy.
Andrew Wells-Dang is the Hanoi-based
regional representative of theFund for
Reconciliation and Development, an
independent non-profit organization seeking normal
economic, diplomatic and cultural relations between the
US and Cambodia, Laos and Vietnam. He is a regular
contributor toForeign Policy In Focus,
which gave permission for publication.
