by J. Adam Williams
Edited by Savvas Savvinidis
In 2002 the Southern Shrimp Alliance was formed as a non-profit organization consisting of shrimp fishermen, processors, and other members of the domestic shrimp industry. By the end of 2003, the Southern Shrimp Alliance filed petitions for relief from dumped shrimp imports from Brazil, China, Ecuador, India, Thailand, and Vietnam. The domestic shrimp industry, supported by state and local governments but opposed by foreign governments, exporters, importers, seafood distributors, major retailers, and restaurant chains, went before both the U.S Department of Commerce and the U.S. International Trade Commission. They demonstrated both that the imported shrimp from these countries was unfairly traded and that the domestic industry suffered economic injury as a result of these dumped imports. This resulted in antidumping duties being implemented in February of 2005, with $169 million in duties collected and distributed back to the domestic industry to date.
Since then, the flow of imported shrimp into the United States has stabilized, with the overall value of these imports generally climbing. This stability and growth in value has allowed the domestic industry to recover briefly from the economic damage caused by the flood of cheap imports.
Although these trade remedies have been positive, there are now new problems undermining the effectiveness of antidumping duty orders. Shortly after these orders were implemented, foreign and U.S. importers began multiple schemes to circumvent the payment of trade relief. One way they do this is by taking shrimp from a country that has to pay trade relief, such as China, and shipping it to the U.S. from a country that doesn’t, such as Cambodia. The result of this is Cambodia’s emergence as a significant source of shrimp for the U.S. market, going from 0.00 lbs imported to 11.7 million lbs between 2003 and 2004.
Cambodia is just one example of importers diverting shipments through countries that don’t fall under antidumping duties. The volume of shrimp imported through Cambodia quickly decreased as importers switched to product exclusion as a method of avoiding antidumping duties. In 2005, as the full scope of the antidumping duties was implemented, the Department of Commerce excluded “dusted” shrimp from these orders. Resulting in a loophole that would be heavily exploited.
Dusted shrimp is simply peeled shrimp that have been lightly dusted with flour. After being dusted, the shrimp are considered breaded, ready to cook, and fully processed, therefore not subject to antidumping duties which specifically target unprocessed shrimp. This allowed the foreign exporters to ship these shrimp to the U.S. without paying antidumping duties while the local importer could just rinse them off to be sold as unprocessed peeled shrimp.
Before product exclusion was reversed, the U.S. Customs and Border Protection Agency conducted a 90 day sampling operation. They found that 64% of the 81 dusted shrimp entry lines were inaccurately described as dusted shrimp, estimating that importers had evaded $132 million in antidumping duties on these shipments alone. With there being no known penalty, civil or criminal, imposed on individuals for these fraudulent trade schemes, their efforts simply adapted as each loophole closed.
Currently, China now diverts shipments through Malaysia. Attention being brought to this fraudulent trade has attracted the focus of the FDA to these shipments, with an alarming number of them testing positive for veterinary drug residues. Between 2014 and 2015, the FDA refused entry of 402 shrimp trade lines from Malaysia. In contrast, there were 404 refused from all countries in the five years prior.
With 80-90% of the shrimp being consumed in this country being imported, odds are you’re eating imported shrimp when you dine out or buy from a big retail chain. What can you do to avoid the risk of eating shrimp that are possibly contaminated and/or fraudulently traded? When dining out, ask where the restaurant gets their seafood. If you’re cooking at home, don’t buy your seafood at a big retail chain, but rather go to your local seafood market and buy their locally caught product. You’re guaranteed chemical free, quality seafood, and in doing so you will be preventing hardworking fishermen from going out of business.
All data sourced from ITC Data Web.
Header photo from turncrafter.com