Tidal Waves and Tariffs

The feds' foolish fight against Third World shrimp.

Less than two weeks after a 40-foot wave flattened swaths of Southeast Asia, the United States slapped a new round of tariffs on India and Thailand. As the federal government promised $350 million and private citizens pledged even more, the message to survivors was clear: Have our Marines, our pity, and our cash, but for the love of God, do not send us your cheap shrimp.

Thanks to the U.S. International Trade Commission (ITC), Thai shrimp farmers have had to deal with more than flattened farms. Along with Vietnam, India, Ecuador, China, and Brazil, Thailand is the unlucky target of an anti-dumping suit filed by American shrimpers. In January the ITC sided with the plaintiffs, paving the way for tariffs.

It's not surprising that Americans haven't heard much about the shrimp debacle: Shrimping represents a tiny fraction of our national economy. But in the targeted countries of Southeast Asia, things are a little different.

The last decade has seen developing nations turn to aquaculture as a way to climb out of poverty and jump into the world economy. It's been a rare development success story for international aid organizations, whose start-up assistance American shrimpers refer to as "unfair subsidies."

The dumping allegations are based on discredited methodologies, but it doesn't take sketchy calculations to figure out why imported shrimp is such a bargain. In the U.S., shrimpers haul out gas-guzzling trawlers and catch shrimp in the wild, while in Asia, farmers raise shrimp in mesh cages. Throw in cheaper labor and better weather, and developing nations have a clear advantage in the global market. Dumping? Hardly. This is free trade–a gospel Americans have been preaching to Southeast Asia for decades.

Subsidies do have their place in the anti-dumping hysteria, but the handouts are happening right here at home. The Southern Shrimp Alliance, a coalition of American shrimpers, has happily accepted federal cash to fund its war against farmers in impoverished countries like Vietnam.

But if you're not so keen on having your taxes keep an industry on life support, worry not. Thanks to something called the Byrd Amendment, Louisiana's shrimpers should be off the dole any day now. The amendment ensures that duties collected in anti-dumping cases are paid directly to American producers.

So you won't be propping up Big Shrimp. The Third World will, as duties on its imports are collected by an American industry that can no longer compete.

Vietnamese shrimp farmers may not have much clout in Washington, but they've got pissed-off allies pulling for them. Wally Stevens, the president of the American Seafood Distributors Association, says U.S. trade czars lack the "common sense of a third-grader." The ITC 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 shoot up American jobs will be lost. During the last decade, shrimp has gone from pricey restaurant fare to supermarket fodder. Soon we may be back where we started.

The ITC ruling included a promise to "review" the cases of Thailand and India, where waves wiped away entire farms and the people who farmed them. But the tariffs went into effect in January, and at press time there were no signs of easing up on any other countries that dare supply cheap seafood to hungry Americans.

Whether or not the tariffs stay in place, it's a curious message we send to a region absorbing historic amounts of foreign aid. As American agencies offer food and education to impoverished Southeast Asians, American trade laws are closing markets and crushing industries.

Western politicians ask why billions in assistance have yielded precious little, but handouts can go only so far. The farmers of Vietnam, Thailand, and India don't want to spend the rest of their lives accepting our aid. They just want to sell us shrimp.