Indian seafood exporters may get a major lift

In an important move that can be termed as positive to the Indian seafood export industry, the US Customs and Border Protection [CBP], under the Department of Homeland Security has initiated action to abandon the enhanced bonding requirement [EBR] on shrimp imported to that country.

CBP has recently invited comments from the public on the proposal to end EBR, especially from importers and domestic producers of shrimp. The US move is in response to a decision of the Dispute Settlement Body [DSB] of World Trade Organisation [WTO] to abandon EBR immediately as it is inconsistent with the WTO obligations. The WTO decision was in the wake of a complaint filed by India and Thailand in April, 2006.

As termed by the exporters and experts this move is crucial and important to the domestic export industry since India’s business with the US had dropped terribly during last 4-5 years.

The number of exporters to the US had dropped from 254 in 2005 to 52 last year obviously due to the heavy burden of EBR in addition to the anti dumping duty on warm water shrimp. India’s export basket to USA had dropped to 36,612 tonne valued at Rs 1,017 crore in 2007-08 from 43,758 tonne valued at Rs 1,347 crore in 2006-07 .

The US import had dipped by 24.55 per cent in value and 16.33 per cent in volume. The US share in the export basket had dropped to 13.3 per cent making the country to the fourth spot after EU, Japan and China.

At the request of India and Thailand WTO had established two panels to study the issue in October and November, 2006. Both the countries argued that the US action breached several provisions of GATT 1994, the WTO agreement on implementation of Article V1 of GATT, and the agreement on subsidies and countervailing measures. The panels uphold the views of India and Thailand.

The US cross appealed against the panel’s findings in April, 2008 at the Dispute Settlement Body [DSB], but it adopted reports of the panels and appellate body in last August.

In a consultation meeting with the US, India and Thailand on 5 September,2008 Washington indicated that it intended to comply with the recommendations and rulings of the DSB, but sought more time to implement.

Washington had sought time till March of this year. In its notification dated 7 January, 2009 CBP has called for public comments on the issue and the last date for submitting them is 11th February, 09. Final notice regarding EBR will be announced after a scrutiny of such comments, the notification said.