Taxes

All That Have Not Fins and Scales

Imports are an abomination, according to domestic shrimpers

|

Less than two weeks after a 40-foot wave flattened massive swaths of Southeast Asia, the United States slapped a tariff on millions of dollars worth of seafood imports from India and Thailand. As the federal government promised $350 million, and private citizens pledged even more, the message to surviving shrimp farmers was clear: Have our marines, our pity, and our cash, but for the love of God, do not send us your cheap shrimp.

Americans haven't heard much about the shrimp debacle, and there is a reason for that: Shrimping, shockingly, is but a tiny fraction of our national economy. In the targeted countries—Thailand, Vietnam, India, Ecuador, China and Brazil—things are a little different. The tariffs have been big news in the Bangkok Post, Viet Nam News, and Times of India since they were first proposed by American shrimp farmers last year. In Vietnam, fish farming, or aquaculture, has been a successful part of a shift from a centralized economy to a market-oriented one. A country with a per capita annual income of $545, Vietnam has seized on aquaculture to turn out over $400 million in exports to the United States. Elsewhere in Southeast Asia, fish farming is injecting some cheap protein into rice-based diets, helping to combat malnutrition, and transforming shrimp from a pricey delicacy to supermarket fodder. It's a rare development success story—or, it used to be.

Here at home, America's favorite seafood is at the center of a nasty little spat between the farmers, who claim that six nations are collectively forcing them out of business, and distributors, who say, so what? The American shrimpers have employed an oft-abused anti-dumping law and some dubious calculations to argue that foreign farmers are selling their shrimp below cost due to subsidies. Distributors say the foreign shrimp is just cheaper because it's raised on farms rather than caught on trawlers, and tropical shrimpers have key advantages like better weather conditions and cheap labor. The US International Trade Commission has sided with the American shrimpers consistently, and between November 30 and January 6, the commission paved the way for duties ranging from 2.35 percent to a whopping 112.81 percent.

The Southern Shrimp Alliance, which is pressing the suit, is rather indignant on the subject of subsidies. It's a subject the eight-state coalition knows a lot about. In fact, the SSA has accepted generous subsidies from the federal government to help press its lawsuit. That is, the group happily accepts subsidies to fund the war against subsidies in impoverished countries like Vietnam. But if you're not so keen on sending your taxes to prop up an outmoded industry, worry not. Thanks to something called the Byrd Amendment, Louisiana's shrimpers will be much better off in a few months. The Amendment ensures that duties collected in anti-dumping cases will be paid directly to American producers. According to one nonprofit, that adds up to $1 million in payouts for each company involved in the case. Soon, you won't be subsidizing Big Shrimp; the third world will.

That may seem unfair, but the complex web of American trade law sustains yet greater absurdities. According to Deborah Long, an SSA spokesperson, the subsidies the SSA is so worked up about are not government subsidies, but developmental aid. In addition to the World Bank, that aid is provided by our very own US Agency for International Development. The U.S. government has slapped tariffs on third world nations as punishment for accepting U.S. assistance, and now some of that aid will be used to pay those tariffs, which will in turn end up in the pockets of American shrimp farmers. Washington could just write a check to SSA, but that would be protectionism. This, apparently, is anti-dumping.

The dumping allegations themselves are based on a wacky math trick called "zeroing." which is scarily technical, highly disingenuous, and has been declared illegal by the World Trade Organization in other instances. Distributors have a simpler explanation for low shrimp prices. In the U.S., old-fashioned, Bubba-esque shrimpers take out oil-guzzling trawlers and catch shrimp in the wild, while in Asia, farmers raise shrimp in mesh cages. Guess what's cheaper?

Distributors say the anti-dumping hysteria isn't just bad for the far-off third world; it's bad for all of shrimp-scarfing, scampi-loving America. Wally Stevens, the president of the American Seafood Distribution Association, says the US trade czars lack the "common sense of a third grader." The ruling, he says, will threaten 20 times the number of jobs it protects. Distributing and serving shrimp is a much bigger business than fishing for it, and as prices inevitably shoot up, jobs will be lost. Over the past ten years, shrimp has become a staple of the American diet, to the point where we each consume 4 pounds of the stuff every year on average. Fully 87 percent of that shrimp is imported. Tariffs are bad news for Red Lobster, Bubba Gump, and a host of other places in which hyper teenagers serve cheap seafood to middle class consumers.

The January 6 tariff ruling included a promise to "review" the cases of Thailand and India, where the tsunami wiped away entire farms and the very people who farmed them. The UN Food and Agriculture Organization estimates that the industry in Tamil Nadu alone lost $13 million, while Thai exporters say they're out $500 million. But the tariffs will almost certainly go into effect at the end of January, well before any review takes place, and the entire process is mired in slow-moving bureaucracy within a system no one trusts to be logical, just, or sympathetic.

Whether or not the subsidies are eventually revoked, it's a curious message we send to a region absorbing historic amounts of foreign aid. As American NGOs build elementary schools, immunize children, and promote school-feeding for poor Asians, American trade laws are sapping their chances for future employment, closing off markets and crushing industries where Asia has competitive advantages. Development bigwigs can offer a litany of reasons why billions in foreign aid have yielded precious little, but doubling handouts may not be the answer. I'm guessing that the farmers of Vietnam, Thailand, and India don't want to spend the rest of their careers accepting our aid. They just want to sell us shrimp.