US duty threat for Indian shrimp exports

Written by RajeshRavi | Kochi | Updated: Jan 2 2013, 05:01am hrs
<>American body says subsidised shrimp exports by seven countries, including India, hurting domestic producers

The countrys seafood industry is facing serious pressure from the US after an association of American shrimp farmers asked the US department of commerce (USDOC) to impose a countervailing duty on shrimps.

Several countries, including India, are already fighting a similar petition filed in 2004 by another US-based association, Southern Shrimp Alliance (SSA).

Indian shrimp exports to the US currently have to bear an anti-dumping duty of 1.67 %. The petition comes at a time when Indian shrimp exports to US were bridging the loss caused by the countervailing duty and custom bond imposed by the USDOC.

The Coalition of Gulf Shrimp Industries (COGSI), an association of shrimp farmers from the coastal states of Alabama, Florida, Georgia, Louisiana, Mississippi and Texas, claim that artificially low-priced imported shrimp from seven countries, including India, have suppressed domestic prices, eroded sales, destroyed US jobs and eliminated the operating margins of domestic producers.

Since 2009, shrimp producers from seven countries have gained US market share by aggressively undercutting domestic prices through the use of billions of dollars in assistance from their respective governments. Imports dominate the market, and their unfair pricing is making it harder and harder for US producers to cover their costs of production, much less make a reasonable return. Without relief, we fear that these unfair foreign subsidies could eventually drive our domestic industry to extinction, said C David Veal, executive director, COGSI, in a press release.

Anwar Hashim, managing director of Abad Fisheries, and former president of the Seafood Exporters Association of India told FE that the petition could create insecurity in the minds of Indian exporters and the review by the US government could drag on for years.

The effect of the anti-dumping duty from 2004 was dramatic on Indian exports. Indian shrimp exporting companies to US fell to less than 75 from 228 at the time of imposition of the punitive duties. Frozen shrimp exports constitute almost 50% of the value of India s total seafood exports and the US actions had a deleterious effect on the numerous aquaculture farms spread over coastal India.

India and several countries including Vietnam, Thailand and Brazil came under the scanner of the USDOC in 2004 after SSA alleged that lower-priced, pond-raised shrimps were hurting the US industry.

The US mostly harvests shrimp from the sea. In addition to the anti-dumping duty, the US has imposed a customs bond, which is a cash guarantee collected by the US customs against any further rise in the anti-dumping duty. The US agency had to completely withdraw the bond in 2009 pursuant to the World Trade Organization (WTO) Appellate Body report that the application of this requirement to shrimp from Thailand and India was inconsistent with US WTO obligations.

But India failed to convince the US government in 2010 when the sunset review of the shrimp imports from India decided to continue with the duty, saying Indian exporters did not submit adequate data.

Under the US Tariff Act of 1930, all tariffs come automatically under review every five years.