JUNE 1, 1997
The Meter Is Running: "Turtle Safe" Meets WTO
By Teresa Platt
This article was written before the author became executive director of Fur Commission USA. In 1997, Teresa Platt headed the San Diego-based Fishermen's Coalition, and served on the boards of the National Animal Interest Alliance and Alliance for America.
FISHERMEN ARE RECEIVING A LESSON in Global Economics 101 right now if they're watching the shrimp market. On May 1, the United States began embargoing imported wild shrimp from 40 countries in response to a lawsuit pushed by Earth Island Institute, American Society for the Prevention of Cruelty to Animals, Humane Society of the United States, Sierra Club and Georgia Fishermen's Association.
Required under a December 1995 U.S. Court of International Trade ruling, which interpreted embargo provisions contained in a rider attached to an appropriations bill in 1988, the trade barrier was originally implemented as narrowly as possible by the U.S. government. Department of State officials excluded shrimp from waters of the world were turtles are absent, farm-raised shrimp, shrimp from artisanal fishermen working with hand-pulled nets and shrimp shipments from companies, and even individual boats within countries, which are using Turtle Excluder Devices (TEDs) even if the balance of the fleet was not.
Government efforts to fine tune a blunt instrument such as this trade barrier are truly remarkable and U.S. fishermen should send a thank you note to the Department of State which attempted, by limiting the business losses due to this court ruling, to spare fishermen a huge bill later. This unilateral trade barrier is illegal under U.S. commitments to the World Trade Organization (WTO) and will result in sanctions to U.S. interests for the losses to the countries embargoed, a business losses-type settlement across borders. The meter is running.
The original rider which started this trade nightmare was pushed in the late '80s by Gulf of Mexico shrimpers operating under the belief that if they had to pull the newly designed and clumsy TEDs, then shrimpers worldwide should. This particular group of fishermen did not export any product overseas and so did not consider the impact on overseas sales or the global market. Although the Department of State succeeded temporarily in limiting the extent of the embargo, Earth Island Institute refiled the court case in an effort to disallow this narrow interpretation, and won, expanding the embargo to a blanket country-by-country barrier for any country without an across-the-board turtle protection program comparable to the U.S. unilateral standard. This situation is remarkably similar to the tuna embargoes placed on many countries unilaterally under the U.S.'s Marine Mammal Protection Act except that U.S. legislation for shrimp protection does not require secondary embargoes on countries buying product from countries under primary embargo. Yet.
The shrimp market is volatile, impacted by factors such as production declines due to viruses in farmed shrimp to changes in dining habits to trade disputes such as the embargo and its potential disruption to millions of dollars of product. Shrimpers hoping for a monopoly windfall, however, will learn a lesson about the elasticity of the market as the price whiplashes back and forth in response to external factors. Even if the U.S. were forced to close her doors completely to foreign imports, rising prices would collapse demand, with the free consumer freely turning to other food products. No one is forced to buy shrimp at any cost and, unless the resellers or fishermen absorb the price fluctuations, the market will simply equalize itself.
But the U.S. market is far from locked and barred. Thirty six shrimp-producing countries are not embargoed and their product will be attracted by any increase in U.S. prices. As product moves from untraditional sources to the U.S., and the 40 countries that are embargoed shift their sales to other buyers, the biggest winners in this game will be reefer vessels, freight forwarders and fuel suppliers.
But what about the long term? The U.S. market consumes over 960 million pounds of shrimp annually with 70 percent of that production imported. With the Department of State's efforts to limit the impact of the primary embargo, only about 10 percent of imports were originally effected. But after Earth Island Institute won its court case to broaden the net, other countries and producers joined the blacklist, further exasperating the problems of those who produce, distribute and consume shrimp. This blacklisted product will, of course, be absorbed by the world market and enter the U.S. through back-door avenues, but closing major markets without a concomitant reduction in production drags down prices globally for all shrimp producers. Welcome to the global economy.
Worse yet, all this disruption may be legal under U.S. law but it is illegal under our international trade obligations as detailed in the World Trade Organization (WTO, formerly GATT). We are putting U.S. interests at risk of sanctions by the WTO for the damages incurred by the businesses hit by this illegal trade barrier, even when those business losses are across borders. And the U.S. treasury will not pay these penalties. Fishing companies will. According to the WTO rules, the U.S. companies benefiting from the illegal trade barrier will bear the burden of the sanctions. Duties will be levied on shrimp products by the embargoed (damaged) countries and the proceeds distributed to those who suffer from the illegal trade barrier. If shrimp does not supply enough cash to meet the bill, the companies hurt by the illegal trade barrier can demand duties be expanded to other products. All U.S. fishermen now face the risk of business losses from a business headache few of them even know about.
The Meter Is Running
Whenever shrimp prices move up temporarily, Earth Island Institute will crow that environmental protection can benefit business and actively work recruiting shrimpers into the "turtle safe" certification program, harassing shrimpers who resist. Although the "turtle safe" certification program presently only confirms what government already regulates, Earth Island Institute has a history of pushing for more restrictive requirements such as in their eastern Pacific "dolphin safe" campaign for canned tuna. Once inside the program, canneries are pressured to help cover the financial costs of the "dolphin safe" monitoring program by contributing to Earth Island Institute or the "Flipper Seal of Approval" regime as administered by an affiliated group, Earthtrust of Hawaii. According to Earthtrust, companies paying licensing fees to their "Flipper Foundation" include some of tuna's biggest players: StarKist, J. Wattie's, Miramonte, Tree of Life Tongol Tuna and others. On the board of the Flipper Foundation are David Phillips of Earth Island Institute, Don White of Earthtrust and Craig van Note of Monitor Consortium.
Companies that balk at paying money to make it all go away will find themselves the target of attacks by dozens of animal rights groups as coordinated by Earth Island Institute and company. After all, animal rights groups oppose fishing, turtles are cute too and everyone loves Flipper.
The global tuna market exceeds $6 billion in retail sales annually, representing over 200 million cases of tuna consumed worldwide. A licensing fee as low as two cents a case yields $4 million annually, a good income, plus the glory for saving Flipper while fishermen do all the work.
In an attempt to diversify their certification business, Earth Island Institute has turned to shrimp. Over 5.5 billion pounds of shrimp are sold annually worldwide. Licensing fees of a penny a pound yield a potential fortune of $55 million, a nice business further enhanced by fame and glory for saving turtles while fishermen bear the burden and expense of TEDs, time/area closures, market disruption and WTO-imposed sanctions.
Dare I say it? Eco-extortion? Racketeering?
What's the solution? For the U.S. tuna fleet it was involvement in the multi-lateral conservation regime of the Inter-American Tropical Tuna Commission's dolphin bycatch reduction program. For turtle protection, the Western Hemisphere Turtle Convention holds promise. Multi-lateral programs are WTO-legal and result in people working together to identify and solve real environmental problems. No, there is little glory, grandstanding or glamour in it and the solutions are simply what they always are: international cooperation, education, individual responsibility and science, science, science. "Beggaring my brother" policies and "big stick" politics may make us feel like we're getting somewhere but don't really solve anything. Worse yet, they yield predictable and troubling results: ill will among neighbors, diminished opportunity and increased poverty.
And the meter is running.
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