SEAFOOD.COM NEWS by Michael Ramsingh and John Sackton – March 21, 2014 — The US Dept. of Commerce has thown another unwelcome curve ball at the US shrimp industry, by attempting a duty calculation method that increases penalties against Vietnam, Thailand and India in the latest prelminary review.
The US Dept. of Commerce has thown another unwelcome curve ball at the US shrimp industry, by attempting a duty calculation method that increases penalties against Vietnam, Thailand and India in the latest prelminary review.
The Department of Commerce has announced an increase in the preliminary shrimp duty rates over prior final rates for major U.S. shrimp suppliers in Thailand, Vietnam and India, primarily as the result of the Department’s use of a new calculation methodology, which is called “Differential Pricing.”
Differential pricing is a new methodology used by the Dept. of Commerce that allows them to measure differences in prices among various consumers, regions, and time periods. Where needed the DOC can construct export prices on the basis of their own analysis, and then mark transactions to these constructed prices. The result is that they abandon their previous method of simply taking the average export price and the average cost.
Vietnam was hardest hit in this year’s preliminary margin determination for the period February 1, 2012 to January 31, 2013. Exporters were levied rates between 5 and 10 percent; a significant increase from Commerce’s 2013 final determination in the prior review that awarded zero percent rates across the board. Exporters Minh Phu Seafood and Stapimex saw their duty margins rise from zero to 4.98 percent and 9.75 percent, respectively.
In India, rates were also increased across the board. Most notably, Devi Fisheries went from a de minimis rate of 0.23 percent to 1.97 percent. Falcon Marine Exports, meanwhile, went from a zero percent rate to 3.01 percent.
Similarly, Thai exporters saw their shrimp antidumping duties tick up from zero percent in 2013 to 1.1 percent industry-wide, including Pakfood. Marine Gold was left out of the 2014 preliminary review because it was excluded from the antidumping order as of February 1, 2012.
Since the rates are preliminary they do not apply retroactively, nor will they affect the cash deposit rate on current shipments. All cash deposit rates will continue in effect according to the final results of the most recent administrative review. However, if the preliminary rates are finalized with no change, then importers in the current review period will owe duties at the increased rates at the conclusion of the reviews.
In its most basic description the Department’s differential pricing formula measures differences in prices among consumers, time periods and regions. It substitutes for the “Targeted Dumping” methodology that Commerce used only when an allegation of targeting was first filed by a member of the domestic industry. No allegation is now required.
However, both of Commerce’s antidumping methodologies are considered controversial, and both the Court of International Trade and the World Trade Organization are now considering challenges to the methods in cases other than the shrimp cases. It is much too early to know how these will be resolved.
Should Commerce uphold these higher preliminary rates in its final determination, cash deposits with the new duties would take effect on the publication date of the final results, which will occur sometime this summer.
Click here for Commerce's notice on preliminary Vietnamese duty rates.
Click here for Commerce's notice on preliminary Thai duty rates.
Click here for Commerce's notice on preliminary Indian duty rates.
This article was based on Commentary from Warren Connelly and Jarrod Goldfeder from the law firm of Akin Gump Strauss Hauer & Feld LLP
This story originally appeared on Seafood.com, a subscription site. It is reprinted with permission.