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« August 2006 Table of Contents

Trade Forum: Antidumping research still plagues importers

A recent, barely noticed federal- court ruling provides vivid documentation of why Americans who import seafood products regard the U.S. antidumping laws with disdain.

But before examining how Depart­ment of Commerce officials abused their discretion to slap 80-plus-percent tariffs on imports of shrimp from five Chinese shrimp producers, I'd like to get something off my chest: Consider the alleged criminal conduct stemming from the imposition three years ago of antidumping tariffs of up to 63 percent on Vietnamese basa imports.

A federal prosecutor in Panama City, Fla., has filed a 42-count indictment accusing two U.S. importing companies and their vice president, Danny Nguyen, and five Vietnamese exporters of illegally evading the duties. The prosecution charges the suspected conspirators with intending "to defraud the United States" by falsely labeling 1 million-some pounds of Vietnamese basa as grouper. If the allegations are proven in court, we are talking about criminality, not merely seeking loopholes to get around burdensome, unfair antidumping tariffs.

Hugh Warren, executive VP of the Catfish Farmers of America in Indi­anola, Miss., says that regardless of one's views on the antidumping laws, the notion of turning to criminality to evade them is "outrageous" conduct.

"This prosecution in Florida should cause many people in the industry to stop and reassess the way they are doing business," Warren adds.

Seafood importer Matt Fass, president of Maritime Products Inter­national in Newport News, Va., who testified against antidumping tariffs on Vietnamese basa, says that Warren is spot on: "If proven in court, this is shameful, criminal conduct, even if you regard the law as terrible." Amen.

Okay, let's get back to why so many in the seafood industry have every right to regard the antidumping laws as terrible.

For anyone who has ever seen shrimp displayed in a supermarket aisle, U.S. Judge Timothy Stanceu's 54-page opinion in Allied Pacific Food, et. al. vs. United States, issued on June 12, is easy to grasp. The count size of shrimp is the key determinant of price; big shrimp are more expensive than little shrimp. Yet when they decided in 2004 to slap 80-plus percent antidumping duties on five Chinese shrimp exporters, Commerce officials refused repeated requests to look at real financial figures by count size.

The Court of International Trade judge found that the bureaucrats "went to some length to develop a complicated procedure for estimating count-size-specific shrimp values based on the single value of $5.97 per kilogram," an obviously artificial number.

Everyone in the seafood industry who has been targeted in an antidumping case knows the game: The bureaucrats jigger the numbers to punish those who traffic in imported seafood with high tariffs. Usually, they get away with it, unless some judge finds the officials have defied logic, as happened in the shrimp case.

Because Commerce's machinations clearly "were unsupported by substantial evidence on the record and were otherwise contrary to law," the judge sent the case back to the department, with instructions to try to come up with more accurate - i.e. honest - numbers by this fall. Stay tuned.

While there's no excuse for refusing to comply with any laws, it's also true that these antidumping laws have a fishy smell to them that does little to promote respect for the rule of law.

Greg Rushford is editor and publisher of the Rushford Report, a Washington monthly newsletter on trade politics at www.RushfordReport.com