The Ad Hoc Shrimp Trade Action Committee (ASTAC), an association of shrimp farmers in eight southern states of the United States, filed an anti-dumping petition against six countries — Brazil, China, Ecuador, India, Thailand and Vietnam.
The petition alleged that these countries had dumped their shrimps in the US market.
on 21 January 2004 the US Department of
Commerce (DOC) announced the initiation of anti-dumping investigations against the six countries.
The Department notified the International Trade Commission (ITC) of its decision on initiation.
On 17 February 2004 the International Trade Commission announced its decision that there was a reasonable indication that the US shrimp industry was affected due to Anti-dumping.
The Department of Commerce continued with its investigations and gave its
preliminary determination on 28 July 2004.
The ratio of preliminary duty varies between 3.56% and 27.49% by the DOC.
The weighted average rate for India is 14.2%,
The average rate for
▪ China is 49.09%,
▪ Brazil 36.91%,
▪ Vietnam 16.01%,
▪ Ecuador 7.3%
▪ Thailand 6.39%.
On 26 February 2002, Reggie Dupre, a
Louisiana state senator, alleged that tainted farm-raised Asian shrimp was being diverted from Europe and dumped on the US market.
Vietnam, one of the countries identified almost at the beginning of the SSA(South America Shrimp Association) exercises and also highly dependent on the US market for shrimp exports, was the first to protest.
Foreign Ministry spokeperson Phan Thuy Thanh said in a statement on 12 September 2002 that ‘I can say with certainty that
Vietnam has never dumped its shrimp, and its
Source: WTO Secretariat, Rules
Rokhmin Dahiri, the Indonesian Maritime and Fisheries Minister, denied allegations that the Indonesian government subsidized its shrimp farmers.
He said that the price of shrimp on the domestic market was much lower than the export price.
“The dumping charge was baseless and,
therefore, the United States should exclude Indonesia from the proposed anti-dumping investigations. ”
The Indian government and the Indian shrimp industry were aware of the threat.
Arun Jaitley, the then Minister for Commerce, made a statement in June 2003 after his official visit to the United States: ‘We are anticipating an action against our shrimp exports because our
share in the US market is on the rise.
The six named countries accounted for 74% of shrimp imports in the US market.
Imports from the six countries increased from 466 million lbs. in 2000 to 650 million lbs in 2002.
Import prices of the targeted countries had dropped by 28%
in the previous three years.
The average unit value of the targeted countries in 2000 was
$3.54; this had fallen to $2.55 in 2002, on a headless, shell-on equivalent basis.
The average dockside price for one count size of gulf
shrimp dropped from $6.08 to $3.30 per pound from 2000 to 2002.
The United States was the most open market in the world.
High tariff rates in other large importing countries
provided a powerful incentive for exporters to increase shrimp shipments to the United States.
The anti-dumping investigations against Indian shrimp imports might be initiated was hinted at during bilateral talks when the then Commerce and Industry Minister Arun Jaitley had met his counterpart in Washington at that time.
The reason given was that India’s shrimp exports to the United States had been rising rapidly during the previous three years, from $255.93 million during 2000-1 to $299.05
The United States, traditionally a buyer of small-sized shrimp from India, has now
started buying many other varieties,
including black tiger shrimp, resulting in its occupying the top slot in India’s export
markets of marine products, replacing Japan in 2002-3.
Commerce Minister on the possible threat to Indian shrimp exports to the United States, SEAI(Seafood Exporters Association of India (Kochi, Kerala, India). and MPEDA(The
Marine Products Export Development Authority) went into action.
The SEAI (Sea food export Association of India) has estimated a total budgetary
requirement of Rs. 70 million to fight the case. Of this, SEAI would mobilize Rs. 40 million internally and the remaining Rs 30
million would be collected from its members, depending on the volume and value of their individual exports to the US market.
First, there are specific variations between
the shrimp caught off the south-west coast of the United States and in Indian waters, so
that prices are bound to be different.
India’s shrimp exports are predominantly of black tiger and scampi varieties which are not cultivated in the United States’, according to the president of SEAI.
Second, while fishing in the United States is a capital-intensive activity calling for major
investment, in India shrimp capture is carried out with a very low level of capital and
requiring hardly any investment.
This makes the cost of production
considerably lower in India compared with that for shrimp sea-caught off the US coast.
Department of Commerce observed that
India had a strong case as India was exporting mainly ‘tiger shrimps which are not found
there and that too, in unprocessed form’.
Noting that 80% of shrimp consumption in the United States is met through imports.
Shrimp exports to the United States had come almost to a standstill due to the
uncertainty regarding the contingent applicability and incidence of the anti-dumping duty.
In 1976 US banned shrimps ,It was on the ground that trawling for shrimp by mechanized means had been adversely affecting certain varieties of sea turtles.
The WTO ruled against the United States and asked it to make the regime WTO-compatible.
However, since that had not yet happened, India’s exports to the United States of aqua-culture shrimp and shrimp caught by non-mechanized means were being made on the basis of certification by the
Several visits by the representatives of those two bodies to Washington at critical points also helped to bring an understanding of the nature of the problem and how to face it.
This resulted in the selection and appointment of the legal counsel, in September 2003.
The speedy resolution of the issue of financing helped Indian case.
The shrimp industry in India shouldn’t have been focused on only one or two major
markets for growth.
Previously it was Japan and during the last few years, it has been the United States.
India learnt the importance of diversification.
A. J. Tharakan, the SEAI president, has said
that they are exploring alternative markets to make up for the loss of the lucrative US
market.
‘But it will be a long drawn-out process. It is not easy to establish your presence.’