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September 23, 2013

United States

The Wall Street Journal’s Comments on the

End of the Subsidy Case


Here’s the complete story, exactly as it appeared in the WSJ:


 “A U.S. panel ruled Friday that: Gulf of Mexico shrimp producers weren’t harmed by foreign governments’ subsidies to their shrimp-industries, a decision that prevents the U.S. from putting duties on imports.


The case pitted U.S. shrimpers against foreign producers of frozen shrimp as well as the U.S. grocery stores and food suppliers that sell low-cost, imported seafood.


The U.S. International Trade Commission voted 4-2 that the U.S. industry wasn’t significantly harmed, which means the Commerce Department wont follow through with the tariffs it had planned for as much as $1.9 billion a year on shrimp imports from China, Ecuador, India, Malaysia and Vietnam.


‘It’s a huge measure of relief’, said Matthew Nicely, partner at Hughes Hubbard & Reed LLP in Washington, who represents Vietnam’s shrimp industry.


Edward T. Hayes, a New Orleans lawyer with Leake & Andersson LLP who represents Gulf shrimp processors, said he and his clients would decide whether to appeal the ITC case after the panel’s opinion is publicly released in about a month.


U.S. producers along the Gulf Coast, already hit by the 2010 Deepwater Horizon oil spill, argued fuel costs have made it hard to compete with shrimp farms in Asia, which they say receive government support.  The U.S producers said foreign-government subsidies threaten to destroy the domestic shrimp business, which now supplies just one-tenth of the shrimp consumed in the U.S.


U.S. processors also have said foreign governments’ support takes many forms, from India paying extra cash to cover ocean freight bills on shrimp bound for the U.S., to Subsidized loans in China, to below-market land sales in Vietnam.


World Trade Organization rules limit the amount and types of subsidies a government can provide to private industries.  Foreign countries disputed the U.S. Commerce Departments subsidy findings and its preliminary tariffs.  The foreign producers, as well as some U.S. supermarkets, argued wild-caught Gulf shrimp are essentially a different product that wouldn’t be affected by subsidies on farmed shrimp in Asia.  They said Guff shrimp producers have benefited from payouts stemming from the Deepwater Horizon spill, making it difficult to show the industry is suffering."


Source: The Wall Street Journal.  USA Shrimpers Lose Bid to Get Tariff on Imports.  William Mauldin.  September 21, 2013.


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