November 8, 2004
Southern Shrimp Alliance
1078 Island Avenue
Tarpon Springs, Florida 34689
Re: Shrimp Antidumping Investigations
I have just had an opportunity to read your November 4, 2004, letter to Commerce Secretary Evans, responding to a letter he received from the American Soybean Association (ASA). I was surprised and disappointed by the text and tone of your letter. Your use of terms such as "extortion" and "economic terrorism," while sure to attract press attention, were totally without justification.
The ASA letter simply expresses the concerns of another American industry that stands to be hurt by restrictions on shrimp imports. It reflects the realities of international trade — that in essence what goes around comes around. The United States cannot expect that imposing trade restrictions on one of the most important exports of six developing countries will not generate a commercial response in kind. Shrimp represents one of the most vital industries in Thailand and the dumping case brought by SSA could have a devastating impact on it. Since so much soybean meal is used as food for farm-raised shrimp, it is hardly surprising that Thai soybean-consuming industries will not reward the United States for such an action, especially when what they import from the U.S. is readily available from other countries. That includes Brazil, another victim of the SSA's anti-trade campaign.
Your letter makes much of the fact that dumping cases are WTO-legal, and that somehow that makes a response from private companies in the target exporting country inappropriate. Perhaps you are not aware that the Commerce Department's very own mathematics that account for all or most of the preliminary duty levels have been ruled illegal by the WTO itself, at the highest appellate level, in a case involving the United States on facts identical to the shrimp investigations. I refer to the DOC's obviously unfair and discretionary "zeroing" methodology, by which any sales to the U.S. that are at higher prices than foreign sales, and thus would reduce dumping margins, are not counted in the duty calculation. Zeroing helps create or inflate dumping margins, as the margins are based only on the comparisons of a cherry-picked subset of lower priced sales. The WTO has already ruled that zeroing violates international trade rules on how dumping duties are supposed to be calculated, the very same rules that the United States wrote, and with which we demand compliance from other countries. The fact is that without applying the illegal zeroing methodology, nearly all of the dumping margins found by the Department of Commerce would disappear. Is it unreasonable for industries in the targeted countries to rethink their choices of sourcing from the U.S. if the Department of Commerce chooses to apply the illegal zeroing methodology to make and inflate margins?
SSA cannot have it both ways — demand that other countries abide by international rules, but reserve the right to break those rules when they prove no dumping has occurred. Bending international trade rules to create dumping margins is a misguided attempt to hide the reality that the domestic industry's problems are homegrown. It is no wonder that Thailand and other countries are outraged over the shrimp case when the duties can only be found using "funny math" that has already been ruled illegal by the WTO.
Your claims about subsidies are more of the same smokescreen of baseless allegations that SSA has used to stir up emotions throughout this case. The domestic shrimping industry has been tapping U.S., state, and local governments for millions of dollars in so-called disaster assistance for years, and has only been able to finance this multi-million dollar attack on trade thanks to such payments. SSA knows very well that those supporting this case stand to receive annual payments under the Byrd Amendment that could reach into the hundreds of millions of dollars if duties are actually imposed on shrimp imports, despite the fact that these subsidies have also been conclusively ruled illegal by the WTO. Let's be honest, this is where the food tax dollars that SSA wants to impose on the U.S. economy would end up.
Besides the nearly quarter million U.S. jobs dependent on shrimp imports, SSA is putting exports by many U.S. industries at risk with this dumping case. Both zeroing and Byrd Amendment subsidies are clear WTO violations. The six targeted countries will have every right under the WTO rules to seek compensation through unilateral imposition of tariffs on their imports from the United States to compensate for SSA's proposed food tax. SSA's members might pocket more subsidies from this case, but it is the American economy that will end up the poorer for it.
Eddie, this case is causing and will cause great harm to our industry. SSA's efforts to stop shrimp imports are going to undermine the popularity of shrimp as America's number one seafood, and turn it back into a high-priced, elitist delicacy. They are going to alienate major U.S. trading partners and risk the loss of billions of dollars in U.S. exports. What they are not going to do is restore the domestic shrimp industry to health — that will only come through the things your industry does to help itself.
As always, members of the Shrimp Task Force are ready to work with SSA and your industry to help you help yourselves, should you want to abandon efforts to restrict fair trade in shrimp.