INDIA’S SEAFOOD EXPORTERS LAUD U.S. GOVERNMENT’S INITIATION
OF INVESTIGATION OF TSUNAMI DAMAGE TO SHRIMP INDUSTRY

"Changed Circumstances" Review Could Lead to Revocation of Antidumping Duties
on Indian Shrimp Imports into U.S.

Washington, DC – The U.S. International Trade Commission (ITC) announced today that it will initiate a formal investigation of the damage caused by the tsunami to India’s shrimp industry. The ITC’s self-initiated 120-day "changed circumstances" review could revoke the antidumping duties that the U.S. Department of Commerce (DOC) imposed — and the ITC approved — on imported frozen shrimp from India earlier this year.

"We commend the ITC for launching a formal investigation that could lead to the revocation of the dumping duties imposed on Indian shrimp exports to the U.S.," said A. J. Tharakan, National President of the Seafood Exporters Association of India (SEAI). "It is a sad fact that it will take years to recover from the unimaginable human and physical destruction to our industry caused by the terrible events of December 26. We are not seeking aid from, but rather trade with, the United States. Revocation of these duties will greatly assist India in tsunami recovery efforts while posing no threat to the U.S. shrimp industry."

The ITC voted on January 6, 2005 to approve the dumping duties that were formally imposed on Indian shrimp imports beginning on February 1, 2005. Those taxes currently range from 4.94% to 15.6%. The ITC also approved dumping duties on shrimp imports from Brazil, China, Ecuador, Thailand and Vietnam. However, on the day of the vote, ITC Commissioners took the unprecedented step of announcing that they would consider launching a formal "changed circumstances" review to determine whether the damage to India and Thailand caused by the tsunami has made shrimp exports from these countries no longer a threat to the domestic shrimp industry. Following a 30-day public comment period, the ITC voted five-to-one to formally launch the review for both India and Thailand.

"Once underway, a changed circumstances review must be completed within 120 days, during which time the ITC will issue extensive questionnaires, receive legal briefs, hold a public hearing, and conduct independent investigations, all of which will mostly concentrate on the tsunami’s damage to India’s shrimp industry. Terminating the dumping duties on India would require a majority of ITC Commissioners agreeing that revocation would not likely to lead to injury to the domestic shrimp industry," said Kenneth J. Pierce of Willkie Farr & Gallagher, counsel to SEAI.

"Fifty-five percent of Indian shrimp is wild-caught, 45% comes from aquaculture, and both sectors have been devastated by the tsunami," continued Tharakan. "Over 88,000 fishing boats were destroyed — and their main catch was shrimp. Our country’s shrimp aquaculture production raises black tiger shrimp, for which broodstock must be caught in the ocean with vessels because India restricts broodstock imports to avoid species contamination. This means that the severe damage to our fishing fleet amounts to a critical blow for both wild-caught and aquaculture production."

In January and February 2005 (the latest available statistics), U.S. shrimp imports from India dropped 57% compared to the same period in 2004.

"Every aspect of the industry has been affected. Based on preliminary information, the tsunami damaged the coastal sea beds where shrimp live and breed, reduced the fishing fleet in the affected states by one-third, and severely damaged 10% to 25% of the hatcheries, over 14,000 acres of shrimp farms, and critical infrastructure in the heart of our country’s shrimp producing regions," said Tharakan.

The impact of the tsunami was focused on three coastal states in India — Andhra Pradesh, Tamil Nadu and Kerala — that together account for 75% of India’s total shrimp exports, and for 85% of the shrimp exported to the U.S. Prior to the tsunami, India’s shrimp exports to the U.S. had already begun to decline — from 9.2% of market share in 2002 to 7.8% in the first half of 2004.

Nearly ninety percent of the shrimp consumed in the U.S. must come from imports. The U.S. shrimp industry in late 2003 filed a $2.4 billion dumping suit alleging its overseas competitors were dumping product at margins ranging from 30% to over 200%. Eventually the duties imposed ranged from 0 percent to little over 10 percent except for China, where they were higher. The six countries targeted in the suit, including India, made up 75% of those imports.

The Seafood Exporters Association of India represents nearly all seafood processors and exporters from India and works cohesively with all concerned within and outside the industry for the development and promotion of the seafood industry in India. Headquartered in Cochin, SEAI has eight regional offices across India.

For more information, please contact George Felcyn at or .