SEAFOOD.COM NEWS - by John Sackton – July 29, 2004.

James Jochum, Assistant Secretary of Commerce for Import Administration, said during a press conference today that the Dept. of Commerce may not have calculated anti-dumping duties on Brazil correctly.

Preliminary duties are subject to revision before they become final, and he said “these numbers are subject to change.”

At issue is the method by which the “All Others” rate is determined for each of the 4 countries. Normal DOC practice is to arrive at the “All Others” rate using a trade weighted average duty based on the three respondent companies. In the case of Brazil, that would have been to average the actual duties of 0%, 8.41% and 67.8%. This is how the DOC arrived at the 'all others' rate of 36.91% for Brazil.

However, in the case of Brazil, which received the highest duties, only one company, Norte Pesca S.A., received a very high duty of 67.80%. Jochum said that the reason this company received such a high duty was that they did not provide some of the information that the DOC had sought, and therefore the DOC used an “adverse” finding in calculating the dumping margin.

In essence, the DOC is assuming the worst case with this company, since some data was not provided.

However, Jochum said that it was not the Department’s practice to incorporate such “adverse findings” into the trade weighted calculation of the “all others” dumping margins. Therefore, he suggested that the DOC may have to revisit how that rate was calculated for Brazil. It appears that if they calculated a trade weighted average for all others without this 'adverse' finding, the actual number would be much closer to that for Ecuador and Thailand.

The anti-dumping duties assessed on each country are as follows:

India: 3.56% to 27.49%. The “all others” rate is set at 14.20%. The three respondent companies represented 19% of Indian shrimp exports to the U.S.

Thailand: 5.56% (rubicon) to 10.25% (Thai Union). The all other average for Thailand is 6.39%. The three respondent companies, Rubicon group, Thai Union, and Thai I-Mei Frozen Foods, account for 48% of shipments from Thailand.

Ecuador: 6.08% (expalsa) to 9.35% (exporklore), with the all others rate set at 7.30%. The third Ecuador company, Promarisco, received a preliminary rate of 6.77%. These three companies accounted for 35% of the exports from Ecuador.

Brazil: from 0.% to 67.8%. EMPAF got 0%, CIDA 8.41%, and Norte Pesca 67.8%. The all other average was set at 36.91%. The Commerce Dept. has said this may be in error. These three companies accounted for 28% of the imports from Brazil.

Headless Shell on not used as standard

Jochum said that one of the most contentious issues in the case was how to handle the different shrimp products, such as cooked and peeled, and whether to convert everything to a standard headless shell on product or not. He said that they determined to look at product on an “as sold” basis, ie. The actual price for a cooked and peeled shrimp, for example, and they did not try and convert it back to a headless shell on form.

Final Decision delayed until February

Jochum also said that the Dept. of Commerce has extended the final determination on the anti-dumping cases until Dec. 17th. This likely includes the non-market economies, Vietnam and China, as well. As a result, the ITC will make its final injury determination 45 days later, or around February 2nd.

Analysis:

The actual impact of these tariffs will take time to assess. However, the two largest exporters, Thailand and Ecuador, received the lowest tariffs. In 2003, the value of shrimp exported from Thailand and Ecuador was $1.16 billion. The value of shrimp imported from Brazil and India was $494 million.

As many in the industry expected, tariffs on both Thailand and Ecuador have come out generally well below 10%. The actual numbers are 7.3% for Ecuador, and 6.39% for Thailand.

These tariffs are not high enough to cause a major disruption in the market, and are certainly not near the values originally requested by the SSA. For example, the SSA sought anti-dumping tariffs on Ecuador shrimp of between 100% and 200%, on Thailand of 57%. If the DOC had imposed these types of punitive tariffs, there would have been a major disruption in the market.

However, the actual tariffs, while costly to individual companies, will not have this same impact. They certainly will not be enough to raise the overall value of Gulf Shrimp.

Assistant Secretary Jochum said he was meeting later this afternoon with groups of Gulf shrimpers. It will be interesting to hear how they receive the news of the low tariffs on Ecuador and Thai shrimp.

Jochum said that the DOC investigation had vindicated the claims of the domestic shrimp industry that dumping was actually occurring.

John Sackton, Editor And Publisher
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