Shrimp remains on hook for U.S. duties

Shrimp remains on hook for U.S. duties

Landrieu

   The U.S. International Trade Commission ruled Tuesday to extend antidumping duties on frozen warm-water shrimp from Brazil, China, India, Thailand and Vietnam for another five years to protect the domestic shrimping industry.
   In a 5-1 decision, the board said lifting the duty order would cause 'material injury' to U.S. producers.
   The commission imposed tariffs on shrimp from the five countries in 2005 and launched a review last year to determine whether to let them sunset after five years, as required by law.
   Antidumping duties are safeguards imposed on exports from other countries that are sold at below market prices.
   Gulf Coast shrimpers and their supporters hailed the decision to keep the tariff in place until 2016.
   'The domestic shrimp industry is still fragile and is not in a position to confront the inevitable flood of underpriced imports from the subject countries if the orders are revoked,' Sen. Mary Landrieu, D-La., said in a statement.
   The shrimp industry lost considerable business due to hurricanes in 2005 and 2008, the recession and last year's huge BP oil spill.
   U.S. Customs is not doing enough to collect dumping duties, including $56 million from importers of shrimp from China since 2005, Landrieu complained to Homeland Security Secretary Janet Napolitano at a budget hearing on March 2.
   In fiscal year 2008, $42 million in shrimp duties went uncollected, according to her office. In 2009, the amount declined to $418,000. The amount of duties that went uncollected in 2010 was $6.6 million — almost equal to the $6.9 million that was collected. The vast majority of uncollected duties related to entries of shrimp from China ($5.8 million).
   Many importers evade duties by going out of business, or transshipping or mislabeling shipments to disguise the country of origin, industry officials say.
   Unscrupulous shippers, usually affiliated with the overseas exporter, often set up temporary shell companies to evade duty collection. Under Customs regulations, new suppliers can post a bond or a cash deposit for the estimated duties they will owe while another agency, the Commerce Department's International Trade Administration, reviews their application for preferential duty treatment. But the bond is usually a small cost compared to the full levy, and the company disappears as a going concern by the time the ITA can determine its final duty rate.
   The low collection rate due to the loopholes has further prevented the domestic industry from recovering its economic footing, said Deborah Long of the Southern Shrimp Alliance. But the antidumping orders have helped stabilize the U.S. shrimp market as prices and the domestic industry's market share have leveled off, the group said.
   Customs and Border Protection successfully cracked down on transshipment of shrimp from China to Indonesia when the problem was brought to its attention, but has not responded the same way yet to newer evidence of illegal shipping through Malaysia, she said.
   The Southern Shrimp Alliance, an eight-state consortium of shrimpers and processors, said the $56 million in Chinese duty evasion cited by Landrieu is a result of illegal transshipment through Malaysia and is occurring on an annual basis. The routing of shrimp through Malaysia also was an effort to evade a 2007 Food and Drug Administration alert requiring that all Chinese farm-raised shrimp be detained and refused entry unless the importer could prove the absence of unapproved drugs in the shrimp, according to a February 2009 Government Accountability Office report.
   The tariff for Chinese shrimp exporters, unless they can prove their business is not tied to the Chinese government, is 113 percent of the value.
   Long said Malaysian imports of Chinese shrimp spiked in 2005 far beyond normal consumption patterns in that country by 96 million pounds. ' Eric Kulisch