Vietnam Shrimp Import Duty May be Dropped

Four months after the U.S. International Trade Commission voted to continue import duties for five more years on shrimp from Vietnam, a World Trade Organization panel ruled that those tariffs break international trade rules.

Gulf of Mexico shrimpers and processors, who won the February ruling as their industry struggled with the impact of last year's BP oil spill, said on July 11, 2011 that the ruling is clearly bad news for them.

The federal government dropped tariffs in 2007 against Ecuador in response to a similar WTO ruling.

"We certainly view this as a setback for American commerce," said David Veal, executive director of the Biloxi-based American Shrimp Processors Association.

In its report, the three-member WTO panel found that duties the United States imposed in February 2005 because of alleged price dumping by Vietnamese exporters were inflated because of Washington D.C.'s use of "zeroing" to calculate whether the shrimp were being sold at below-cost price.

Under zeroing, commerce economists ignore — or "zero" — import prices above market levels and consider only those below when calculating what duties should be.

According to previous WTO decisions, zeroing leads to inflated margins of dumping, and thus higher duties.

Argentina, Brazil, Canada, Ecuador, the EU, Japan, Mexico, South Korea and Thailand have won zeroing cases at the WTO. In January, the United States promised its trading partners that it would change the method.

Three months later, however, the ITC voted to continue import duties for five more years on shrimp from Thailand, China, Vietnam, Brazil and India. That ruling was the result of a five-year "sunset" review of the antidumping tariffs won in 2005 by a coalition of seafood industry leaders.
Veal was among 11 business owners from Mississippi and Louisiana who testified before the commission that lifting the tariffs would lead to material injury to the domestic shrimp industry.

Veal said on July 11, 2011 that the WTO appears to be slowly undoing the work that he and many others have done for the past several years. The federal government "unfortunately hasn't shown much intestinal fortitude so far in standing up" against its rulings, he said.

Efforts to contact lawyers for Vietnam in the WTO case were unsuccessful on July 11, 2011.