US plans to raise shrimp import taxes

shrimp-farming_32_small-1024x768On August 13, the United States Commerce Department declared its intention to raise import taxes on shrimp from India, Ecuador, Vietnam, Malaysia and China in order to offset export subsidies that those countries provide for their shrimp industries. Thailand and Indonesia were also considered but were ultimately exempted from the new duties.

This move by the US was the culmination of a campaign led by an American shrimp fishing trade union, called the Coalition of Shrimp Industries, which began last year.

The American shrimp fisherman accused these seven countries of subsidising their domestic shrimp industries in violation of World Trade Organization law. Under WTO law, violators of trade agreements can be hit with retaliatory duties, as the US has just proposed to do.

The amount of the subsidies given by each country varied greatly. In the cases of Thailand and Indonesia they were so low that the US Commerce Department decided to exempt them.

Malaysia was found to provide the highest subsidies, and in response was hit with the highest duties.

This news became the subject of debate in the Malaysian parliament on August 16, where Malaysia’s plan to join the Trans Pacific Partnership (TPP) free trade agreement has been hotly contested. A member of parliament that opposes the TPP used this news to argue that, if Malaysia joins the TPP, it will destroy the Malaysian shrimp industry.

These concerns may be premature, however, as the duties are not final. The move by the US Commerce Department was merely the first step. These import tax proposals must be approved by the US International Trade Commission in September for them to take effect.