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Trade Forum: Antidumping tariffs hurt U.S. consumers, industry

Greg Rushford
Greg Rushford
April 01, 2006

The U.S. antidumping laws were designed to protect American jobs against “unfair” foreign competitors who “dump” their products in the U.S. market at below-cost prices. So let us celebrate fresh and chilled Atlantic salmon from Norway, in which the American salmon industry has won the continuation of 20-plus percent antidumping tariffs against Norway.

The duties, and also a 2.3 percent tax to counter Norwegian subsidies for exporters of fresh, whole salmon, were first slapped on in 1991 — the last date that Norwegian salmon was seen in this country in any appreciable quantities.

The two American petitioners from Maine — Atlantic Salmon of Maine and Heritage Salmon — persuaded the U.S. International Trade Commission that if the tariffs had not been continued, scores of American jobs would have been imperiled. Glenn Cooke, the vice president of both companies and a man who has been honored in his country for his entrepreneurial talents, has invested $25 million in Maine already, and vows to pour in another $60 million in the coming year.

Thanks to the U.S. tariff protection, “the U.S. industry ... now finds itself for the first time in years in a position to increase production, increase employment and recover its financial health in the near future,” declared Cooke’s Washington, D.C., lawyer, Michael Coursey, during the litigation.

But hold on. There is another side to this story. Cooke was indeed honored in his country as “entrepreneur of the year” in 1988, and again in 2004 for “business excellence.” But that country was Canada. Cooke is from New Brunswick, where he is CEO of Cooke Aquaculture, which now owns the Maine salmon petitioners.

The two Maine subsidiaries ship their farmed fish north of the border, where it is processed and then exported back to the United States. Moreover, while the “American” petitioners accuse the Norwegian government of subsidizing its salmon industry, so does Canada.

Cooke Aquaculture raked in $898,941 in 1998 to expand its processing operations in the Bay of Fundy. And last July, the Canadian government chipped in another $20 million to support New Brunswick’s salmon farmers. In the trade litigation, Cooke’s U.S. subsidiaries were considered wholly American.

But they certainly would not be free to accuse Canada of subsidizing its exports, considering that the decisions to file such a case would be made in New Brunswick. The larger problem is that when U.S. antidumping officials decided to extend the 15-year-old taxes on Norwegian salmon, they didn’t have to consider the broader public interest.

Despite the rhetoric of fighting “unfair” foreign trade, the antidumping laws tend to cost more jobs than they save. Even if the tariffs on Norway would preserve a handful of jobs in Maine, the interests of far more workers in other parts of the seafood industry who depend upon expanding trade, not contracting it — importers, wholesalers, truckers, stevedores, restaurant workers — were ignored.

The interests of U.S. consumers who might salivate at the prospect of buying more competitively priced salmon from Norway were also ignored.

The more one reflects upon such antidumping cases, the fishier they seem.

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

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