By Quebe Merritt
NYT Institute

NEW ORLEANS, MAY 21-- In his 40 years as a shrimp fisherman, John Williams has seen fuel prices increase, boat insurance rates soar and a fluctuating market. He said he’s ridden the waves of the economy and managed. Until now.

Williams said the overwhelming amount of shrimp dumped into the United States has lost him business because he cannot compete with the cheaper prices. He said he is barely hanging on and has canceled his family’s life and health insurance plans because he could not afford to pay for the policies.

“I’ve dealt with everything, but I’ve never dealt with anything like this,” said Williams, who shrimps out of Tarpon Springs, Fla.

Dumping has become a controversial issue that has pitted U.S. shrimpers against restaurant officials.

On one hand, domestic shrimpers say foreign companies should not be able to sell shrimp in the United States at prices lower than those in their own countries. On the other hand, restaurant officials are saying U.S. shrimpers cannot meet the growing demand for shrimp and should not block competition. The debate has reached the U.S. Department of Commerce, which is investigating whether dumping has occurred in the United States.

The Southern Shrimp Alliance, which represents shrimpers in eight coastal states, blames the industry’s problems on unfair trade. The alliance said six countries Brazil, China, Ecuador, India, Thailand and Vietnam have been dumping cheap, warm-water canned and frozen shrimp into the United States, devastating U.S. markets.

Dumping is when imported shrimp are sold in the United States at less than fair market value. For instance, the alliance alleges that China has been selling shrimp in the United States for 113 to 264 percent less than in their homeland.

“Free trade has rules, and dumping violates those rules,” said Debbie Regan, spokeswoman for the alliance. “In the shrimp industry, we’ve witnessed evidence of dumping, which has increased significantly since 2000. Dumping has led to injury of the shrimp market.”

Chien Bach, spokesman for the Vietnamese Embassy in Washington, denies that his country is dumping shrimp into U.S. markets.

“You can see we are not dumping because Vietnam is a poor country,” Bach said. “Vietnamese shrimpers try to make a profit, so they wouldn’t sell their shrimp at a lower price.”

The economic adviser for the Ecuadorian Embassy in Washington, Aluiison Lima-Campos, also denied that his country was dumping shrimp.

A representative from the Thai Embassy in Washington D.C., said the embassy could not comment on the issue, while the Chinese, Indian, and Brazilian embassies could not be reached.

A study by Nicholls State University in Louisiana indicated that between 2000 and 2002, the value of the domestic harvest fell from $1.2 billion to $559 million.

The alliance has petitioned the Department of Commerce for help. It wants the department to levy a tariff on imported shrimp, thus increasing the price. The department is investigating whether a tariff is warranted.

Shrimp prices differ from dock to dock, but according to Tommy Delaune, president of Tommy’s Seafood, there is vast difference in price between imported and domestic shrimp.

Shrimp are sorted by the number it takes to make a pound. Delaune said domestic shrimp off the boats cost around $4.20 when sold 21-25 shrimp per pound. The price increases by 80 cents to $1 when the shrimp are unloaded, processed, peeled and packaged. So, by the time the shrimp are sold, they cost $5 to $5.20 per pound. However, imported shrimp that have been peeled and processed cost between $3.40 and $4.50 for 21-25 shrimp per pound.

In a letter addressed to the Commerce Department, Steven C. Anderson, president of the National Restaurant Association, wrote that tariffs should not be imposed because domestic markets are unable to meet the growing demand.

“Overseas producers mainly raise shrimp in farms rather than harvest it in the ocean, allowing them to supply the U.S. year-round with a competitively priced, high quality, consistent product,” he wrote.

Thomas V. Vakerics, a lawyer representing the Coalition of Shrimp Exporters/Producers of South China, agrees. In a response to the alliance’s petition, Vakerics cited the International Trade Commission’s 1985 report, which recognized that “farmed shrimp enjoyed significant comparative advantages over shrimp caught in the wild.”

If a tariff is imposed, consumers might have to pay more for shrimp, according to Steven Grover, vice president of health and safety regulatory affairs at the National Restaurant Association. He said businesses are likely to pass on the extra cost to buyers and that some restaurants are also considering taking shrimp off the menu.

“Shrimpers want the government to help them get money; they want to eliminate the competition,” Grover said. “Gulf-coast fishermen have a unique product. If they try to market it at high-end restaurants, they’d make more money.”

Grover said he believes shrimpers should distinguish their shrimp from cheap, imported shrimp. He said Gulf-coast shrimp could be sold as premium shrimp, creating a greater profit for shrimpers.

“It’s kind of like Angus beef. People pay more for that,” Grover said.

Though the alliance has begun a marketing strategy, Regan said marketing alone would not solve the problem. She said the “Red Lobsters of the world” are able to market their products, but solo shrimpers do not have the finances to market their shrimp versus imported products.

This summer, the alliance will launch a marketing strategy that will provide quality assurance and brand differentiation through packaging.

The Commerce Department announced May 19 it would need 50 days to rule on the tariff. A ruling may come on July 2.