TRADE-BRAZIL: Shrimp – New Source of Tension with U.S.

By Mario Osava Reprint | | Print |

By Mario Osava*

RIO DE JANEIRO, Jan 19 2004 (IPS) - Brazil’s shrimp exports could follow the footsteps of Chile’s salmon, a successful fish-farming product that swiftly conquered markets overseas but for which it suffered threats of trade barriers in the United States.

Brazil’s shrimp production has been growing by more than 50 percent a year, from 3,600 tons in 1997 to 40,000 tons in 2003. Exports reached 258 million dollars last year.

The goal is to export 500 million dollars worth of shrimp by 2005, and to become the world leader in 2010, with exports that could climb to ”perhaps 1.5 billion dollars,” the president of the Brazilian Association of Shrimp Farmers (ABCC), Itamar Rocha, told IPS.

But the euphoria has run up against a major obstacle. The Southern Shrimp Alliance (SSA), which represents the shrimp industry in the eight U.S. shrimp-producing states, filed anti-dumping complaints against Thailand, China, Vietnam, India, Brazil, and Ecuador in late December.

In its complaint before the U.S. Department of Commerce and the International Trade Commission, the SSA accused those countries of dumping – exporting products at prices deemed artificially low.

The SSA is demanding that ”anti-dumping” tariffs be imposed on shrimp imports from those countries, ranging from 30 to 99 percent on shrimp from Vietnam and between 119 and 267 percent for shrimp from China, the world’s biggest shrimp exporter.

In the case of Brazil, the U.S. shrimp producers want duties of 40 to 230 percent.

If the complaint is admitted and the import duties are put in place, the U.S. market would be virtually closed to the world’s leading shrimp exporters.

The United States is a key market for Brazilian shrimp farmers, as it purchases 45 percent of this country’s exports.

Rocha said the SSA complaint is not justified, because the reason Brazil’s shrimp is competitive is that the country’s shrimp farming industry has the highest production level in the world: 6.4 tons per hectare of saltwater, nearly double that of Thailand, the second most efficient producer.

That productivity level is the result of the technology that Brazilians have developed, and of the dry, sunny climate in northeastern Brazil, where production continues year-round, in contrast to other countries, where low temperatures and rain bring the activity to a halt for several months each year, he explained.

The arid, sunny climate of the northeast makes it possible to raise shrimp on cheaper, more natural food, said Rocha. Brazil is also free of pests that attack shrimp farm operations in other nations, which means local shrimp producers also save on chemicals, he added.

Chile’s salmon producers have faced a similar situation since 1997. But last July, investigations determined that Chile’s exports were not being dumped on the U.S. market below cost.

Brazil’s special secretary of Aquaculture and Fisheries, José Fritsch, announced that he would invite representatives of the U.S. government and shrimp farmers to Brazil, to become familiar with local production techniques and verify for themselves that Brazilian producers do not resort to dumping and receive no government subsidies.

Fritsch said his hope is that the U.S. Department of Commerce will not accept the complaint, because the United States imports almost 90 percent of the shrimp consumed in that country. He pointed out that the suspension of imports would threaten the nearly 100,000 jobs generated by the shrimp-processing sector in the United States.

In Brazil, shrimp farming employs 52,000 people, including workers in breeding labs, farms and hatcheries, and the processing industry. But it could generate many more jobs if the sector exported value-added products, said Rocha.

So far the sector exports only unprocessed shrimp. But this year, the industry will incorporate 14 new forms of packaging, such as peeled shrimp with tails and precooked shrimp. Production of value-added products should double by 2005, and the products should make headway in more demanding markets and lead to the creation of more jobs in Brazil, said Rocha.

However, shrimp farmers also face complaints of environmental damages, as shrimp farms operate in mangroves, fragile, unique ecosystems formed where the sea and freshwater meet, and where the vegetation is ideal for the breeding of fish and crustaceans.

That makes it an activity without a great future, economist Antonio Buainain, a professor at the University of Campinas in southern Brazil, told IPS.

But Rocha said ”that is not true,” and argued that shrimp farming in mangroves is a thing of the past in Brazil. He asserted that a visit to the new shrimp farms that have mushroomed in northeastern Brazil demonstrates that the complaints ”are ideological, from those who are unfamiliar with the way things are done today,” said Rocha.

Aquaculture requires large amounts of ocean water, for which canals must be built, and doing so in mangroves is not cost-effective, he argued. ”The ABCC is very concerned about the environment, and has sponsored studies on the possible pollution that could be caused by the water that runs out of the shrimp pools,” he said.

(* Gustavo González in Chile contributed to this report.)

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