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CITAC Shrimp Task Force

November 18, 2004


George Felcyn
The PBN Company


Potential Damage to U.S. Exports of Brine Shrimp and Soybeans If Duties Imposed

Washington , DCTwo Senators and six Representatives recently sent letters to Commerce Secretary Donald Evans urging him to ensure that the Commerce Department (DOC) takes a fair and balanced approach to the pending final determination of antidumping duties on shrimp imports from six countries. The letters also express concern that the Commerce Department's discretionary methodology declared illegal by the World Trade Organization (WTO) known as 'zeroing' may unfairly create or inflate dumping margins for most of the foreign shrimp companies being investigated.

These letters come on top of another batch of letters sent to the DOC last spring and summer signed by a total of 18 lawmakers expressing concern about the antidumping petitions and their impact on the U.S. economy.

Also today, the Shrimp Task Force placed a full-page ad in The Hill highlighting the inherent bias and damaging effects that zeroing has on the credibility of antidumping investigations conducted by Commerce. Zeroing is a discretionary trade policy choice inherited by the Bush Administration, which it could readily eliminate. View the ad.

Commerce will decide final dumping duties for China and Vietnam by November 29, 2004, and for Thailand, India, Ecuador, and Brazil by December 17. In January 2005, the ITC will determine whether the imports from the six countries are a true cause of material injury to the domestic industry. Earlier this year, DOC made preliminary determinations on dumping duties ranging from 12.86 percent to 67.8 percent for Brazil; from 0.04 percent to 112.81 percent for China; from 6.08 percent to 9.35 percent for Ecuador; from 3.56 percent to 27.49 percent for India; from 5.56 percent to 10.25 percent for Thailand; and from 12.11 percent to 93.13 percent for Vietnam.

In his letter to Secretary Evans, Utah Senator Orrin Hatch (R-UT) wrote, "In this final determination, the Commerce Department has another opportunity to review the facts in these cases, including new evidence supplied by both sides, and enforce our nation's trade laws in a fair and balanced manner."

Tens of millions of dollars in brine shrimp exports from the U.S., primarily from western states such as Utah, are used as feed for shrimp farming, and could be jeopardized if significant dumping duties are imposed on shrimp imports, resulting in loss of demand for the product.

In addition to Senator Hatch, other lawmakers who recently wrote to Secretary Evans regarding the shrimp trade case include: Senator Barbara Boxer (D-CA), Rep Rob Bishop (R-UT), Rep. Chris Cannon (R-UT), Rep. Lane Evans (D-IL), Rep. Joseph Knollenberg (R-MI), Rep. Pete Sessions (R-TX), and Rep. Rob Simmons (R-CT).

Sen. Hatch's letter expresses specific concern with DOC's 'zeroing' methodology. When determining duties, investigators currently eliminate, or 'zero out,' a company's sales to the U.S. that are at higher prices than foreign sales, thereby intentionally biasing the required averaging to create higher margins. By limiting the averaging to only a cherry-picked subset of lower-priced sales, zeroing exaggerates dumping margins and has been declared illegal by the WTO.

"In this case," wrote Sen. Hatch, "I believe it is appropriate for the Department to abide by the WTO ruling that the U.S. must fully account for sales where there is no dumping rather than zeroing out such sales when calculating any dumping damages. It is my belief that by abiding by the WTO ruling, the Department will conclude that reduced or even eliminated tariffs will be in order."

In addition to brine shrimp, the trade petitions also threaten U.S. exports of soybeans. In October, the American Soybean Association wrote a letter to Secretary Evans warning that the outcome of the case could "have a direct and serious impact" on the American soybean industry. Soybean and soybean meal are an important source of feed for farmed shrimp, a major U.S. export market.

Also last month, more than 2,500 Vietnamese shrimp farmers signed a letter to DOC, ITC, and members of Congress expressing "strong objection" to the prospect of duties being imposed on shrimp imports from Vietnam. The U.S. accounts for 45 percent of Vietnam's shrimp export sales each year, and the country's shrimp industry accounts for over three million jobs.

Thanks largely to high-quality, reasonably priced imports, shrimp has become America's #1 seafood, with Americans consuming a record 4.0 pounds of shrimp per person in 2003, up from 3.7 pounds in 2002. Nearly 90% of all shrimp consumed in the U.S. comes from imports, much of it from countries utilizing modern aquaculture techniques that enable exporters to efficiently farm and export their product year-round with consistent quality. Facing high costs, limited supply, weather problems, and other inherent production disadvantages, U.S. shrimpers have failed to keep up with global competition.

In response to the threat that these food taxes pose to consumers and the consuming industries that serve them, the Consuming Industries Trade Action Coalition (CITAC) and the American Seafood Distributors Association (ASDA) formed the CITAC/ASDA Shrimp Task Force, joining concerned grocers, restaurants, processors, distributors, U.S. exporters, business councils, and U.S. importers. The Shrimp Task Force seeks to assure that the U.S. government considers all the facts, applies the law, and exercises its discretion in the case fairly and objectively, with a full understanding of the national ramifications of any decision.

For more information on the Shrimp Task Force, contact George Felcyn at or .