Saving Seafood

Farm Bill provision would tilt school pollock, tuna purchases back to US

September 19, 2018 — US pollock and tuna harvesters don’t normally care much about the so-called Farm Bill, the massive, every-five-year legislation that helps to, among other things, preserve crop subsidies for American corn and soybean growers and nutrition programs for the unemployed. But they do this time.

That’s because Alaska Republican senator Dan Sullivan has placed a provision in one of the two bills now being worked out in a congressional conference committee that would force the US Department of Agriculture (USDA) to more aggressively enforce the “buy American” rules required for schools to receive federal reimbursement for the meals they serve to children, including fish.

The US pollock industry maintains that strapped-for-cash school systems aren’t following those rules, resulting in some 60% of the pollock they serve to be what they claim is less expensive and inferior, twice-frozen fillets sourced originally from Russia. They support Sullivan’s change.

“We are mindful of the need to maximize the use of federal dollars in procuring fish products for school meal programs and for school districts to maximize available school lunch foods,” said the At-sea Processors Association (APA), a group that represents six seafood companies that maintain interests in or operate 16 US-flag, high-tech trawl catcher/processor vessels in the Alaska pollock fishery, in a recent statement.

“However, it is similarly important to maximize the nutritional value of school lunch meals for children and to ensure that students’ early exposure to fish products is positive in order to promote incorporating more seafood meals into diets consistent with federal dietary guidelines.”

Read the full story at Undercurrent News

 

Pollock’s dodge of US tariff could leave market open to Russia

September 18, 2018 — Another round of tariffs on Chinese goods approved by U.S. President Donald Trump on Monday may have inadvertently left the market open to Russian-sourced pollock processed in China.

The tariffs, initially proposed in July, will go into effect on 24 September and affect an additional 5,745 products from China. While initially tariffs on frozen cod and pollock were planned, lobbying efforts by industry leaders successfully kept those items off the final list.

However according to Jim Gilmore, director of public affairs for the At-sea Processors Association (APA),  the wording of the exemption for Alaska pollock may leave the U.S. market open to Russia-origin pollock that is processed in China and shipped to the U.S.

The issue, said Gilmore, is the use of the term “Alaska pollock.”

“We believe this is an anachronism of a misleading geographical indicator remaining in use.  That is, the term ‘Alaska pollock’ is used to define Russian-origin pollock as well as U.S.-origin Alaska pollock,” he said. “If we are reading the situation correctly that the [a]dministration is not distinguishing between U.S. and Russian origin pollock in excluding two HTS Code lines from tariffs, then Alaska pollock producers continue to be disadvantaged in this trade war with China.”

The specific issue, said Gilmore, has to do with two HTS Codes: 0304.75.10 and 0304.94.10. Under the decision on 17 September, the door could be open for pollock of Russian origin and processed in China to enter the U.S. duty-free using those codes.

“If our interpretation is correct, Alaska pollock producers face stiff tariffs in China and Russia’s ban on U.S. seafood imports, including Alaska pollock, remains in effect,” Gilmore said. “Meanwhile, our principal international competition – Russian pollock processed in China – enjoys tariff-free access to our domestic market.”

Read the full story at Seafood Source

NOAA Says Seafood for Reprocessing Exempt from Chinese Tariffs, but Rebate System May Impose Costs

June 28, 2018 — SEAFOOD NEWS — NOAA has confirmed via email to people in the Alaska seafood industry that the 25% Chinese retaliatory tariff will not apply to re-processed products for export.

John Henderschedt, NMFS director of the Office of International Affairs and Seafood Inspection, wrote  “In consultation with Embassy Beijing, NOAA Fisheries has confirmed that the following products are not subject to the additional 25% tariff recently announced by the Chinese government:

-Imports of U.S. seafood that is processed in China for re-export and some fishmeal products.”

“Affected U.S. seafood exports arriving at Chinese ports on July 6 or later will be subject to the new tariff rate,” he said in an email dated Tuesday, June 26th.

There was some uncertainty following China’s June 15 announcement at the beginning of a long holiday weekend for the Dragon Boat Festival that prevented clarification until government offices re-opened last Tuesday, June 19th, according to Jim Gilmore, Director of Public Affairs for the At-Sea Processors Association.

“Really, no one knew at that time, so the news coverage was of an issue with a lot of confusion and not much time for the U.S. government to get clarification.  The holiday didn’t help matters, but it might also have been that the Chinese government language wasn’t clear.  Not sure what factors were all at play,” Gilmore said.

One unresolved issue is that China has two types of import exemptions for re-processing for export.  One involves no tariff, for products that are exempt, and the other collects the tariff, but then rebates the value back to the company when the product is exported.

One sentence in the Chinese announcement suggests that the 25% tariff will be applied to everything, but then rebated for products that are exported.  When asked about this, Henderschedt had no comment.

If this is the final interpretation, the tariffs will add significant costs for exporters, even though they will ultimately get the 25% tariff refunded.  For example, a Chinese plant that purchases 1000 tons of cod for re-processing and pays $3.6 million, would have to pay an additional $900,000 to bring the product into the country, but then get this money back when the product was exported.  This adds costs to the process, even if the tariffs are ultimately not applied.

Ultimately, the answer will come after July 6th, when importers of record have to deal with Chinese customs officers.

Jim Gilmore says not much of offshore Alaska’s pollock is re-processed.  His group, the At-Sea Processors Association,  represents the Bering Sea pollock factory trawlers. He said that’s more common with salmon and cod.

But shore plants, especially in the Gulf of Alaska, export a lot of H&G pollock for reprocessing.  In fact, Trident recently spent millions of dollars in the last several years to upgrade its plant in Kodiak to efficiently produce a frozen H&G product.

Also the Bering Sea Amendment 80 factory trawler flatfish fleet’s catch goes to China for reprocessing, especially yellowfin sole, according to Chris Woodley, executive director of the group’s trade association, the Groundfish Forum.

The vast majority of the U.S. exports of frozen seafood to China are reprocessed in China and then re-exported, Woodley said.  Such U.S. exports to China that are then re-exported from China are not subject to Chinese duties or the Value Added Tax (VAT).  However, U.S. seafood exports that are imported for consumption in China face high tariff rates.  For example, frozen flatfish species, and other Alaska seafood exports to China that are consumed in China currently face a duty of 10 percent and are also subject to a 13 percent  VAT.

The Dragon Boat Festival is held annually in honor of poet Qu Yuan, who drowned himself in a river in 278 BC, as a political protest. Villagers tried to save the beloved figure in their little boats, but when they couldn’t find him, they threw rice in the water in the hopes that the fish would eat the rice, and not the poet and activist, during the Warring States period of Chinese history.

This story originally appeared on SeafoodNews.com, a subscription site. It is reprinted with permission.