Customs bond on shrimp exports to be raised above dumping duty

Kochi, July 30 | Updated: Jul 31 2006, 05:30am hrs
India is planning to take up with the World Trade Organisation (WTO) the issue of trade barrier of customs bond over and above the anti-dumping duty imposed by the US on Indian shrimp.

A delegation comprising the chairman of the Marine Products Export Development Authority (Mpeda), the secretary-general of Seafood Exporters Association of India (Seai) and a legal expert will meet WTO officials in Geneva on Monday and present their case as the bond has driven out several exporters from the US shrimp market.

It was the customs bond of 10.17% on the annual turnover, besides the duty of an equal percentage that made business with the US near impossible, according to Seai secretary-general Elias Sait. The bond was causing a serious fund crunch, forcing medium and marginal exporters to keep out of the US market, he added.

It is estimated that around 230 exporters were shipping shrimp to the US prior to the imposition of anti-dumping duty in August 2004. Presently, only 125 exporters were involved in the US business, which included a few new ones.

In Kerala alone, while there were 54 exporters, the duty pared the number to 23, including four new entrants whose contribution to the export basket was insignificant, said a leading exporter.

After the imposition of the anti-dumping duty, it is estimated that nearly 55,250 tonne of shrimp was exported to the US which earned around Rs 2,150 crore.

According to figures available with the commerce ministry, the duty collected by the US was to the tune of nearly $48 million. The annual customs bond to be taken as cover for a change in duty had forced exporters to cough up around Rs 25 crore, holding up much of their funds.

Mr Sait said that India would take up the bond issue with the WTO in the presence of either representatives of the Southern Shrimp Alliance which moved the petition for imposition of the duty or the US department of commerce.

This was only an initial round of discussions where India would present its case. Based on this, the WTO would form a panel to look into the matter. Sait was hopeful of a favourable outcome. Seai had been opposing the customs bond issue and had taken up the matter before the US international trade court.

In a related development, the WTO is learnt to have set up a panel to probe whether the US anti-dumping duty on shrimp from Ecuador was against international trade norms. Ecuador had argued that there was no reason to claim that it was dumping its material on the US and the methodology to calculate the duty was incorrect.

The panel would take over a year to submit its report. Besides India and Ecuador, anti-dumping duties have been imposed on China, Vietnam and Thailand.