WASHINGTON - The U.S. Commerce Department lowered tariffs on $1.7 billion worth of shrimp imports from Thailand, India, Ecuador and Brazil yesterday, potentially lowering prices for America's most popular seafood.
Thailand, the largest exporter of shrimp to the United States, faces average duties of as much as 6 percent, down from a 10.3 percent preliminary tariff proposed in July after the United States determined that Thai companies were illegally "dumping" exports at below-market prices. The duties were lowered yesterday after a more detailed analysis of the balance sheets of the exporting companies.
Imports account for 87 percent of the 1 billion pounds of shrimp Americans eat each year, the U.S. International Trade Commission estimates.
Complaint to WTO
Thailand, which accounted for an average of more than $1 billion a year in shrimp sent to the United States over the past three years, has filed a complaint at the World Trade Organization for the way the United States computed the duties.
"The shrimp case is an unfortunate and unnecessary exercise in futility by the domestic industry," said Ernie Wayland, executive vice president of sales at Rubicon Resources, Thailand's largest shrimp exporter. The company was assessed a 5.8 percent duty on its shrimp exports to the United States, which won't be an "insurmountable obstacle," according to Wayland.
Yesterday's change also lowers duties for companies in Ecuador to 3.3 percent from 7.3 percent in July; India 9.5 percent from 14.2 percent; and Brazil 10.4 percent from 36.9 percent, the Commerce Department said.
The duties will be collected at the new rates beginning next week. They don't become permanent until a decision by the International Trade Commission is made next month.
Shrimp tariffs, imposed on China and Vietnam this year, have become the broadest United States trade dispute since the Bush administration set duties on steel in 2002. The U.S. shrimp industry requested tariffs of as much as 267 percent on frozen and canned shrimp from six countries.
Unfair trade has caused a 39 percent drop in the import prices of shrimp from 2000 to 2004, endangering the livelihoods of 70,000 shrimpers and processors, according to the Southern Shrimp Alliance, which brought the trade complaint.
"By removing the advantages of unfair trade through duties, the United States government has created a level playing field without closing its borders," said Eddie Gordon, the group's president.
The complaints from the United States shrimp industry were contested by restaurant chains such as Orlando, Fla.-based Darden Restaurants Inc., as well as by U.S. seafood importers and processors.
Prices up 25%
Preliminary duties on shrimp were imposed in July, and importers began making deposits at that point. Since then, wholesale shell-on white shrimp prices rose by more than 25 percent to $3.82 a pound, their highest price since May 2002, according to data compiled by Urner Barry Publications Inc.
Shrimp prices averaged more than $6.25 a pound in 2000, before imports from China and other nations surged, according to Urner Barry, which tracks meat and seafood prices.
In addition to the country-wide averages, the Commerce Department published specific rates for three exporters from each country. Thai Union Frozen Products Pcl, owner of the Chicken of the Sea tuna brand, faces duties of 6.8 percent; India's Hindustran Lever Ltd. faces duties of 13.4 percent; Ecuador's Promarisco SA must pay 4.5 percent; and Brazil's Empresa de Armazenagem Frigorifica Ltd. will pay 10.7 percent.