Posted on 01/03/2005 6:39:41 AM PST by 1rudeboy
Critics often accuse free trade proponents of carrying water for big business. But maybe unrestricted trade isn't always in the best interest of all business. Manufacturers who use steel (car and appliance makers, for example) oppose tariffs on imported steel. However, steel producers of course support them, as they keep competitive foreign steel off the market. While the car maker might opposed steel tariffs, they might support tariffs on foreign-made cars - to protect their share of the domestic market. And steel manufacturers would likely oppose them, as they make it more difficult to sell U.S. steel overseas. Protectionist policies often become quite convoluted.
Recent shenanigans from the U.S. shrimp industry present an excellent opportunity to examine how big business' support for free trade isn't as firm as conventional wisdom might suggest.
American shrimpers recently petitioned the U.S. government to expand its H-2B visa program. These visas allow foreign laborers and their families to enter the U.S. for temporary work. The job must last less than a year, and be a one-time occurrence. Southern shrimping outfits have used the program to bring in foreign workers during the peak of the shrimp harvest.
The problem is that the government limits the program to 66,000 visas per year, a quota already full by March of this year. That meant a significant increase in employment costs, who can pay migrant workers less than what they pay American workers, and who can employ them without benefits.
Given that free traders believe national borders shouldn't prevent employment opportunities, the free trade position might side with the shrimpers here. The government should raise the H-2B cap, or better yet, get rid of it altogether. Here at least, Big Shrimp's interests lie with free trade. But go back to summer of 2004 and the shrimping industry loses its free trade bona-fides.
Last July, the industry won an anti-dumping petition with the U.S. Commerce Department. The U.S. government slapped a 93% tariff on imported shrimp from Vietnam, and a 113% tariff on shrimp from China (though both were later slightly lowered). The shrimping industry claims that those countries produce shrimp from subsidized farms, enabling them to sell shrimp at deflated prices. Opponents counter that tropical climates and "aquaculture" shrimp farms enable foreign producers to harvest more shrimp more efficiently, enabling them to sell at a lower price. Whatever the case, the import taxes are expected to raise shrimp prices for U.S consumers by as much as 44%. The Commerce Department later added India, Thailand, Ecuador and Brazil to the list of shrimp-producers covered by the tariff.
Even that wasn't enough for the shrimping industry. Though they praised the tariffs, they also said these were merely "a step in the right direction," and asked for additional tariffs of up to 200%.
What's worse, the anti-dumping suit the shrimp industry filed against Vietnam and China was financed by U.S. taxpayers - it was part of a $1.2 million federal disaster relief grant to Louisiana shrimpers. In short, the shrimping industry was given U.S. tax dollars to file a petition that resulted in U.S. consumers paying higher prices for shrimp. Consumers got mugged twice. And the domestic shrimping industry benefited both times.
There's more. Normally, proceeds from tariffs on imported goods go to the U.S. treasury. Not this time. A law passed in 2000 allows U.S. industries that win anti-dumping suits to keep the profits from tariffs imposed on foreign competitors. It's a called "double compensation," and it has been prohibited by the World Trade Organization. No matter, Congress has decided to ignore the WTO and reward domestic producers, anyway. Which means that the domestic shrimping industry (a) was permitted to pay for an anti-dumping lawsuit with U.S. tax dollars, (b) won a huge tariff on foreign shrimp which will result in higher shrimp prices for U.S. consumers, and (c) will get all of the revenue generated by those tariffs.
As if this weren't enough, as it turns out, many of those shrimp farms in China and Vietnam primarily feed their shrimp soybean meal. And almost all of that soybean meal is imported from U.S. soybean farmers. Both China and Vietnam are now threatening retaliatory measures against the U.S. soybean industry. The other countries hit by the US tariffs may follow suit. China alone imported about $2.2 billion in soybeans from the U.S. last year, twice what it imported the year before. And a group representing nine trade groups in Thailand has threatened to ban all U.S. soybean imports in retaliation for the shrimp tariffs. Just this month, the American Soybean Association wrote a letter to Commerce Secretary Don Evans outlining the disastrous impact the shrimp tariffs could have on soybean farmers.
The Southern Shrimp Alliance boasts on its website that U.S. shrimp employs some 70,000 workers whose jobs would have fallen into jeopardy had the Commerce Department not forced U.S. consumers to subsidize the industry. But when that same industry asks the federal government to expand the immigrant visa program so that it can hire cheaper foreign labor, it becomes clear that the US shrimping industry's commitment to the American worker is about as reliable as its commitment to free trade - more opportunistic, really, than principled.
The shrimping industry is a great example of how the fight for free trade isn't about protecting big business at all. Rather, it's about protecting free markets, promoting commerce and generating prosperity. It's about consumers having access to the best goods at the best prices, and employees and employers finding one another where they may - and doing both without deference to or interference from artificial borders, protective special interests or messy, overarching governing bodies.
:)
They do try but from what I've heard from local shrimpers is that it requires that local restaurants who are their main constumers must advertize whether they are using Gulf shrimp. I always ask but tourists don't know to ask.
The milk industry finally got off their government-protected duffs and started marketing milk with kid-attracting cartoon characters, portable single-serving containers, bright colors, etc. You're right, there's no reason the shrimp industry can't do the same thing.
There's a market out there of people willing to pay top dollar for extremely high quality goods.
Maybe the shrimpers could get together and hire someone to design an official "We Serve Gulf Shrimp" logo, with a wild-looking cartoon shrimp at the center, and encourage restaurants to display it in their windows and newspaper ads as a marketing point.
Then they could do an ad campaign to promote the "look for the Gulf Shrimp seal" message, explaining why they're better than farm-raised Chinese shrimp.
They wouldn't be "soybean farmers" if they were. They'd be soybean hunters. ba da bing.
A good point, all the same.
yeah, that's the ticket. And play up the "free range" angle.
Good point. Florida has a program encouraging restaurants to announce that they are using Florida products (locally caught shrimp, for example), but the restaurants haven't really followed through. I guess they feel it doesn't matter to people. Maybe the states in question, as well as the industries, could put a little money towards consumer education, trying to create a sort of "buzz" for our local products. And not just locally, but throughout the US.
That's a laugh, since Florida has pretty much put commercial fishermen out of business with their "environmental" rules.
You got that right! It's all that Mississipi mud. I lived in Hawaii and they had prawns there, they were huge but flavorless.
I live 20 minutes from the Gulf and up until a few years ago the price was ridiculus. Also a lot of it is a cash only business, so don't believe all of the woe is me hysteria going on.
Yeah, I had "prawns" in Seattle. No thank you. You don't know what living is until you have a shrimp po-boy with real gulf shrimp on real French bread.
"Strangely enough, nobody ever argues from the point of view of quality. US Gulf shrimp and Atlantic shrimp (such as Mayport shrimp from North Florida) are much tastier than the farm raised Chinese stuff, and I think a market for quality could be built. Let the Chinese stuff go into frozen foods, fast food "shrimp," etc. Sell the good stuff for eating here by people who know what shrimp should taste like.
But that would require marketing and a little creativity, which no industry likes to engage in, especially if they can get the federal government to go out and do things for them instead."
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Now that you mention it, I recall from an earlier article posted here on the same subject, a number of Gulf shrimpers are marketing their product as better tasting than the farm-raised stuff.
"As usual it all depends on who's ox is being gored. Free trade is free trade, in this case sink or swim. As I recall the shrimpers in Louisiana used to bitch about the Reverend Moon's shrimping company being unfair competition.
If you protect an industry from foreign competition the industry has no incentive to improve and try and become more competitive. The US government has been in the subsidy business forever when it comes to farm products and the rest of the world yells foul. On a level playing field we will usually find a better way to win the trade war."
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When you boil it down to it's essence, the heart of the matter with those moronic steel tariffs was that far more jobs (unionized and otherwise) in manufacturing were threatened by the higher steel prices than were "protected" in the steel-producing industries. From what I managed to glean the steel industry has about forty years worth of lobbying experience, "K" street connections, "wrap-onself-in-the-flag" propaganda (and assorted heart-plucking pop songs and movies) that they exploit to their particular advantage.
Furthermore, Dubya's catchword during '02 when this was being shoved through was that steel was of "strategic importance" and domestic supplies had to be guaranteed. This led to several weeks worth of hilarious antics and capitol hill scurrying regarding just which widgets and doohickeys were also of "strategic importance" and had to be "protected." Just keep in mind all this patriotic protectionism comes out of OUR pockets.
I would sure hate the prospect of a bruising trade war over Gulf Coast shrimp. If history is any guide I get the distinct impression that there are only losers in these things
And this is as it should be.I love shrimp, even farm shrimp from Asia.I prefer Gulf and Atlantic shrimp but if foriegn farm shrimp is cut off I will not be able to indulge my craving for shrimp more than a time or two a year- I could not afford it. As it is I eat shrimp all the time and sometimes it is Florida shrimp and I can tell when it is. If the American shrimpers would start marketing their product as the elite food it is then I will be mostly priced out of that market but I will still be abe to eat shrimp whenever I like, perhaps at even lower price.
That way of life is changing willy nilly regardless of the importing of foreign shrimp. The prime fishing andd shrimping grounds in the Gulf are down close to Mexico within the "commercial sea limit" subscribed to some years ago by the US government. That recognition cut off most of the commercial fishery in the Gulf to American boats. When those big seagoing shrimpers and snapper boats all started fishing inshore from Florida to Texas the stocks were depleted pretty quickly and for a while one could be treated to the ludicrous sight of 60-80 foot shrimpers dropping thir booms inside the bays where pereviously only little boats worked. There quickly followed lots of Regulation and Limitation on catch and net size and shape and the industry declines from year to year and no amount of protection will arrest that decline.
Farming and imports ARE the future for shrimp if its consumption is not to be limited to the affluent. If the Gulf industry properly markets its product as premium and sells it as such then the existence of "inferior" imports will increase the customer base for the good stuff.
And wild game is still preferred by enough people that it commands a premium price either on the menu or in the cost of the supplies and licences required to obtain it. "Wild" shrimp can be marketed to those with discriminating taste and larger budgets.
More properly, soybean gatherers
True and irrelevant. Hunter/Gathering cannot compete efficiently. It can remain a niche/exclusive market...which in essence means that it is not competing.
That is what "wild" shrimping should become and eventually will become.
Not if the 'wild' shrimpers successfully keep their protections in place to force unfair burdens on the aquaculturists in order to remain 'competitive' when they are not.
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