No Shrinking from Shrimp Wars

All those shrimp you’ve been eating lately? Dumped. Not literally, of course, but figuratively, at least according to the Southern Shrimp Alliance. On Wednesday of this past week it filed a request with the U.S. Commerce Department and the U.S. International Trade Commission to whack Thailand, Vietnam, India, Ecuador, China, and Brazil on $2.4-billion in imports “flooding” the U.S. shrimp market.

The SSA claims that dumping from said countries is egregious, ranging from 30% to 200%. And they have touching stories to go along with the claim, about “rampant unemployment and whole [U.S.] coastal communities suffering”. Senator Mary Landrieu (D.-La.) is, of course, playing along, putting out a release saying that domestic shrimpers need a more level playing field. “For our shrimpers to feed their families and fuel their boats, they must receive a fair price for their catch,” Landrieu said.

But there some big problems for shrimp-tariff fans:

  1. U.S. producers have a wage disadvantage. U.S. producers pay U.S. salaries. Granted, they are paying wages to shrimpers, not software engineers; but a U.S. shrimper will still earn at least twice what their Vietnamese counterpart will, and often more.

  2. U.S. producers are inefficient. While shrimp prices have fallen from $6.08 to $3.30 per pound since 2000, harvesting methods changed radically at the same time. Most of the six countries mentioned above run shrimp farms where they harvest shrimp intensively and at low costs; the U.S. continues to fish for wild shrimp in the Gulf and South Atlantic. It is the difference between building a car on Ford’s newest automated manufacturing line, and doing it in your back yard with a saw horse and some sheet metal.
  3. U.S. producers are near their production limits. Estimates vary, but most think that the U.S. is already at or near 90% of its current shrimp-catching capacity. So it is not that U.S. shrimpers want access to more of the U.S. market — they couldn’t service more of the market. They just want higher prices for their less efficient supply.

Pardon me for belaboring the obvious, but there is almost certainly no dumping going on. Matter of fact, given the current wage and productivity differences, it is only surprising that gobal shrimp prices haven’t fallen further than they have. And that only makes the conclusions even more obvious: shrimp anti-dumping tariffs are unwarranted, and U.S. shrimpers must modernize or die.

But will the Commerce Department or the ITC see it so sensibly in an election year? We can only hope.