US producers seek more duty on Indian shrimp

India’s seafood export industry is facing a serious threat after an American shrimp producers’ organisation has filed petitions against subsidising shrimp exports by seven countries, including India.

On Friday, the Coalition of Gulf Shrimp Industries (COGSI) filed petitions with the US government, seeking relief from the subsidised shrimp imports from China, Ecuador, India, Indonesia, Malaysia, Thailand and Vietnam. The petitions seek imposition of countervailing duties (CVD) on shrimp from these countries. These duties are needed to offset the unfair trade advantage currently held by these countries, they said.

If Washington imposes CVD on imports, India’s seafood exports industry will be in deep crisis as the US is the largest importer of Indian seafood in value terms. The exports industry is already hit by a drop in exports to other major markets, such as the European Union, Japan, South-east Asia and China. During April-September, however, the US imported 45,540 tonnes valued at Rs 1,947 crore, registering a growth of 11.42 per cent in value terms. The US is the only country which recorded growth in import during the period.
 

TROUBLED WATERS

• Coalition of Gulf Shrimp Industries seeks imposition of countervailing duties on shrimp imports from seven countries including India 
• Duties are needed to offset the unfair trade advantage currently held by these countries, the petitioners say 
• If Washington imposes CVD on imports, India's seafood exports industry will be in deep crisis as US is the largest importer of Indian seafood
• Earlier in 2005, the US Department of Commerce had imposed 11.17 per cent anti-dumping duty on Indian shrimp, but reduced it to 2.52 per cent last year

Earlier in 2005, the US Department of Commerce had imposed 11.17 per cent anti-dumping duty on Indian shrimp, which had caused a steep fall in exports. This was based on a petition filed by the Southern Shrimp Alliance, a producer’s organisation.

Over 280 exporters were shipping shrimp out to the US during that period, which had come down 68 in 2009. Thanks to the concerted efforts by the industry and the government of India, Washing-ton was forced to reduce the duty to 2.52 per cent last year, following which Indian shipments rose again.

COGSI, in a press statement, said the US shrimp producers struggled hard to compete with “artificially low-priced” imported shrimp that is heavily subsidised by foreign governments. Since 2009, shrimp producers in these seven countries have gained US market share by aggressively undercutting domestic prices, they said.

Shrimp is a major export commodity in each of these seven countries, and their governments have set specific growth and export targets for their domestic shrimp industries. To meet these targets, these governments are spending billions of dollars on subsidies, including grants, investments, low-interest loans, tax breaks, provision of land and export credits and guarantees. The petitioners document over 100 programmes benefiting shrimp producers in these countries, including numerous export subsidies.

“Today’s filing is about the survival of the entire US shrimp industry,” said C. David Veal, executive director of COGSI.

The petitions will be investigated by the US International Trade Commission (USITC) and the Department of Commerce, with final determinations expected in the second half of 2013.

USITC will issue questionnaires to US producers, importers, and foreign exporters next week. Finally, in mid-February ITC will issue its preliminary vote. If it votes in the affirmative, the case will proceed, but if it votes in the negative, the case ends. ITC is composed of six commissioners, and at least four need to vote in the negative for the case to end. If the case continues, the Department of Commerce will proceed with its investigation through the issuance of questionnaires to the government and largest packers and will conduct verification after issuing a preliminary determination of CVD.