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Trade laws, designed to combat market distortions caused by unfair trade practices, often create 
distortions of their own. They lead to tariffs and other restrictions that often induce manufacturers and exporters to change their markets as much as their conduct, shifting production to a country not subject to the trade remedy, or selling to other customers in other countries. Such changes can create extreme distortions for consumers, depriving them of goods they may crave. They may punish manufacturers and exporters, but may do little, in the end, to protect petitioners.
Fish and seafood tell this story well, and now are part of a particularly disturbing development. The United States Environmental Protection Agency (“EPA”), the United States Food and Drug Administration (“FDA”), and the National Oceanic and Atmospheric Administration (“NOAA”) all desperately want Americans to believe that the bounty of the Gulf of Mexico is safe for consumption, notwithstanding probable widespread contamination from the toxic dispersants that have driven oil out of sight, but not out of mind.
Gulf shrimpers, in particular, are well aware of the problem. Testifying before the House of Representatives Natural Resources Subcommittee on Insular Affairs in June, John Williams, Executive Director of the Southern Shrimp Alliance, insisted that “U.S. shrimp currently being landed and sold in the marketplace is safe, wholesome and healthy,” but then reported of his unanswered letters to EPA and to NOAA, sent more than a month earlier, “voicing strong concerns regarding the impact of the chemical dispersants used by BP on marine life.” While insisting that, “Assuring the public of the safety of seafood landed in the Gulf is essential to our industry,” he volunteered that “the toxins in the dispersants were likely to have direct adverse impacts on both vertebrate and invertebrate marine life and, further, that the dispersal of oil throughout the water column would increase, rather than mitigate, the harmful environmental effects of the oil spill on marine life.” He forecast an impact “over a long period of time.”
Williams and his Alliance brought the 2002 trade case that put the brakes on imports of shrimp from China, Vietnam, India, Thailand and Brazil. Now, acknowledging risks to the future of shrimping in the Gulf caused by the BP oil spill and, even more dramatically, the government-authorized use of toxic dispersants, he also admits that, despite the successful trade action, the Gulf industry continued in steep decline, down from 200,000 shrimping days in 2002 to 63,000 in 2008. The trade laws may have slowed the decline, but the oil spill will accelerate it.
Now that the leaking oil well has been capped, the Obama Administration, and the Obama family, have endorsed Gulf seafood as safe. The Gulf fishermen and shrimpers, however, are not so sure. As reported in the Washington Post, they fear that the Government has not tested adequately, and that the products of the Gulf may not be safe.
There are in these developments opportunities for foreign producers, both in meeting requirements in the trade laws, and in reaching out to cooperate with their U.S. antagonists. Together they might be able to supply Americans with a healthy product in abundance. Despite the core American belief in the virtues of competition, in this case competition probably would have everyone suffer.
Fixing Cataclysms The American Way
When BP’s Deepwater Horizon platform blew up and sank, the constant appearance of belching oil was ubiquitous in the American media. The crisis response took the form of trying to destroy the offender, in this case the oil itself, dumping millions of gallons of toxic dispersants into the Gulf of Mexico, breaking up the oil while poisoning the food chain. The “solution” was worse than the problem, but it created a promising appearance as the oil went below the surface, a relief to both those discouraged by the spectacle and the company whose visible daily association with the cataclysm through the pictures of the belching oil could only sully further its reputation.
John Williams understood the problem well in his congressional testimony. Noting the EPA and NOAA assertions that the decision to use toxic dispersants in the Gulf involved a “trade-off” that conceded a toxic risk, he concluded that “marine life was sacrificed as a trade-off for preventing oil from floating to the surface and creating even more of a public relations nightmare.” “The shrimp fishery, along with the oyster, crab, bluefin tuna, and other important commercial fisheries in the Gulf,” he said, “are what was ‘traded-off’ in the decision to allow the unprecedented use of these toxic chemicals.” At the time when he was speaking, only a small fraction of the dispersants to be used had yet entered the Gulf’s food chain.
The Impact Of Fixing The Problem: In The Gulf
Oil, being black, is very visible, especially as it washes up on sand. But Corexit, a toxic brew of chemicals relied upon by BP in the millions of gallons to disperse the oil and make it less visible, is itself invisible. It does not eat or destroy or eliminate the oil. It does what its nomenclature suggests – it disperses, and thereby puts out of sight in BP’s hope to put the oil out of mind.
Corexit does not attach to the oil and travel only where the oil goes. Instead, it flows where water flows, or where the tides and waves and storms may take it. Being invisible, it cannot be tracked and traced. It also sinks, so its smell and taste are not obvious on the water’s surface. More likely than not, it has been spreading all over (or under) the Gulf of Mexico.
Fish and seafood live and breathe water. It flows inevitably within and through them. EPA, NOAA, and the FDA all admit that they have never tested the consequences of an intensive distribution of Corexit. They have no idea what it does to seafood and fish, and especially whether the seafood and fish can absorb it and pass it along to humans. Nor have they any idea what quantities humans might be able to ingest without consequence were they to be absorbing it from the consumption of fish and seafood. As Williams correctly observed, “the decision had little to do with science and more to do with limiting the visual impact of the oil spill by keeping oil in the Gulf out of the viewfinders of television cameras.”
EPA, NOAA, and FDA do know that workers involved in the Gulf cleanup have been suffering various ailments and reactions possibly caused by oil but more likely by contact with the toxic dispersants. This contact has been direct, in the water. Williams reported to Congress, “For those shrimpers that have participated in the cleanup process, the reports of health problems related to those efforts are extremely disconcerting. These fishermen report that their concerns have either been ignored or ridiculed.” Possibly the filtration systems of fish and seafood remove such destructive human effects. Unfortunately, none of the relevant federal agencies has any idea.
Millions of gallons of toxic dispersants were poured into the Gulf of Mexico. In the most favorable and charitable scenario, this poisoning of the Gulf did not poison the food chain because seafood and fish either pass the dispersant without residue remaining within them, or their filtration systems somehow clean it up. Much more likely, however, there is now at least a little poison throughout the Gulf’s food chain.
The Impact Of Fixing The Problem: International Trade And The Salmon Lesson
In a distressing irony, Gulf fishermen in early 2005 succeeded in having antidumping duties 
imposed on frozen warm water shrimp from Brazil, China, India, Thailand, and Vietnam. Many of the Gulf shrimpers are of Vietnamese origin, continuing professions they learned in their native land, and deploying the trade laws to contest imports originating from “home.” Their successful petitions raised the price on shrimp in the United States, and reduced the volume of imports. The American appetite for shrimp became more dependent on American product, even as the American product fell into decline and now may be broadly contaminated.
The trade laws have had such effects on the food chain from the sea before. Fresh salmon, once a delicacy, became one of the most widely-consumed dinner staples in the United States through aggressive Norwegian marketing in the 1980s, but after trade remedy action initiated by fishermen in Maine against Atlantic salmon from Norway produced a 26 percent tariff in 1991, Norwegian sales of fresh whole salmon in the U.S. collapsed. The major Norwegian producers then did what producers of portable industries often do: they moved offshore.
The Norwegian producers introduced Atlantic salmon smolts to Chile, promoting a whole new industry of farm-raised “Atlantic” salmon in the Pacific Ocean. By 2006, 65 percent of the farmed salmon sold in the United States came from Chile, with most of the rest from Canada. Norwegian product was gone, and Maine’s product almost gone. Salmon became second only to copper as Chile’s leading export product, having not been exported at all five years earlier, and having not existed in Chile before 1994. Chile aimed in 2006 to increase its exports of salmon by 50 percent by 2010. Wal-Mart by 2006 was buying and exporting to the United States about one-third of Chile’s entire salmon harvest. When Wal-Mart learned, however, of problems in Chilean production, it sent a delegation to Chile, examined the problems carefully, and ceased to buy Chilean salmon altogether.
Instead of achieving continued growth, the Chilean production collapsed in 2008, attacked by a virus caused by inadequate environmental standards and controls in the fish farms, and an excessive use of antibiotics banned in the United States. Compared to a sale of 403,000 tons of salmon in 2008, Chile is predicted to sell only 90,000 tons in 2010. None of it will be sold to Wal-Mart.
The Chilean salmon industry’s growth was environmentally unsustainable, while the pressure to grow in a developing country – producing jobs and revenue – had been irresistible. As early as 2005 an OECD condemnation of Chilean fish farming methods and conditions had already made the collapse predictable if not entirely inevitable.
The American appetite for salmon was not turned off by the collapse of Chilean supply. During the years when Norwegian companies were polluting Chilean waters and undoing the very industry they had created in South America, they were cleaning up their act, under government pressure, in Norway while diverting exports from the United States to Europe. Norwegian product, no longer impeded by trade barriers, rushed into the void in the United States being created by the virus in Chile. However, the diversion is leading to higher supermarket prices for Norwegian salmon in Europe, where the European Union, on July 23, 2010, finally repealed antidumping measures it had imposed on Norwegian salmon in January 2006.
The situation of Maine fishermen, in the long run, was not improved by the trade action. The Chilean product replaced the Norwegian product in the U.S. market, in a more attractive preparation for the supermarket shopper (Norwegian salmon had been sold principally as a whole fish) and at a lower price. A decade later the Maine fishermen went after the Chilean salmon with antidumping and countervailing duty petitions, but failed to stop the exports. When the Chilean production collapsed, the Norwegian production, not Maine’s, met the market demand. Whatever trade distortion the Norwegian salmon had been creating in 1991 was overrun by the distortions from Chile, at least as the Maine fishermen would have to see it. And the whole process of overproduction and contamination, driven at first by a trade remedy action, produced much greater consumption of much more doubtful protein.
Global supplies of shrimp had been making a delicacy into a staple rich in protein for the American diet in the twenty-first century much the way farm-raised salmon had been doing at the end of the twentieth. Once a luxury item on restaurant menus, shrimp in many varieties of preparation became available in every kind of restaurant and at ever more accessible prices, much like the evolution of fresh salmon, selling at less than five dollars per pound just before the collapse of the Chilean supply.
Never have Americans had more doubt, and more reason for doubt, about seafood and fish from the Gulf. These doubts arise just as foreign supplies to the United States have been reduced by application of the trade laws, and in behalf of the very shrimpers who now must catch suspect shrimp. Until NOAA and the FDA can test adequately and certify (EPA is not responsible for fish, but is responsible for the water they swim in), there is no way to know whether the Gulf’s shrimp are safe to consume. There is no indication, however, that there is anything wrong with the shrimp the trade laws are helping to keep out of the United States.
The Opportunity For Foreign Shrimp
Strong concerns have been expressed about the safety of foreign shrimp and other seafood and fish. According to the Voice of America, even before the oil spill the United States imported eighty percent of the seafood it consumed. Yet, questions often are expressed, especially about how farm-raised seafood has been fed, whether it has been kept in unpolluted waters. State regulators have been said to have found antibiotics, banned in the U.S., in foreign imports, along with other illegal chemical residues.
Demand for foreign shrimp will and should go up because of the oil spill and, even more, because of the toxic dispersants used to disguise it. That demand will be offset, however, by legitimate safety concerns regarding imports, and by the antidumping orders.
Under WTO rules, the antidumping orders on shrimp are subject in 2010 to sunset reviews, and the U.S. International Trade Commission decided in April to perform “full” reviews of all the orders. In the circumstances of the Gulf spill, shrimp producers in Brazil, India, China, Thailand and Vietnam have an extraordinary opportunity to make their case, dispose of the orders, and return fully to the U.S. market.
Foreign producers ought to clean up their act, literally, as they will have little difficulty profiting from the marketing of a healthy, safe product, even after spending whatever it takes to assure that the product meets American standards. Wherever the antidumping orders are not sunset, were that to happen (and arguments well made in the current circumstances, where injury to the domestic injury is unmistakably from the oil catastrophe, ought to succeed), producers and exporters who have not shipped to the United States ought to seek “new shipper reviews” so that they can enter the market free of the orders. Chinese producers ought to urge their government to take invite American inspectors to confirm their safe and healthy production in China so that their products can be certified.
The Gulf oil spill is an opportunity for foreign shrimp producers excluded by high tariffs to return to the U.S. market, to improve their product and increase their prices. Orders surviving the sunset reviews will be subject to administrative reviews, where foreign exporters will be able to lower or eliminate their dumping margins.
What is true for shrimp is even truer for crawfish tail meat from China (an antidumping order from 1997 was renewed in 2008; the American petitioners are from the Gulf coast). That order was not sunset and will remain until at least 2013, but new shippers ought to find a U.S. market hungry for safe product. It is true, as well, for frozen fish fillets from Vietnam, subject to an antidumping order since 2003, extended in 2009. That order cannot now be sunset before 2014.
The American appetite for seafood and fish from the Gulf of Mexico may not abate, but the safety of the supply may not be secured merely from the reassurances of government agencies that have admitted they do not know the consequences of the actions they have authorized. The opportunity for foreign suppliers to meet the demand need not be interpreted as a ghoulish outcome of the Gulf tragedy, but rather as a shift in global supply chains. As the Norwegians now are profiting from the uncontrolled exuberance of production in Chile, so producers of healthy fish the world over may profit from the tragedy in the Gulf.
Domestic U.S. producers ought to seek partnerships with foreign producers, instead of acting strictly as adversaries. They could step forward as certifying agents for the quality of imported product; they could partner with foreign producers as investors, as importers, and as experts. They could train foreign fishermen in American standards, and invite them to spend time on American boats and in American production facilities. They could make a more convincing case that they are professionals helping to feed Americans a healthy diet.
All these steps would imply enhancing foreign production, but it need not be entirely at the expense of American production. John Williams recognizes the caution needed going forward as to the quality and safety of shrimp in the Gulf because of the toxic dispersants, which would counsel more selective shrimping and fishing to be supplemented by foreign supply, but unless there is supply, demand will eventually decline. The objective must be an improvement in the quality and safety of everyone’s product. Foreign producers should respond to the market demand, recognizing the paramount need for a healthy product, and the American industry should take the lead.
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measures in 2010 to increase scrutiny of imported goods and impose higher penalties for products that fail U.S. safety standards. The principal impetus for these measures has been suspect imports from China.
Since the signing of MOU 2004, there have been only three CPSC-AQSIQ Safety Summits. At all three, 