(Adds details on tariffs, paragraphs 5, 6)
By David Lawder and Mai Nguyen
BURAS, La./Ho Chi Minh City, Sept 15 (Reuters) - Savun Sim
looked dejected as a large plastic vacuum hose sucked 2,600
pounds of wild Gulf of Mexico shrimp from his trawler's ice
hold.
With dock prices at their lowest since 2009, pressured by a
flood of cheap imports from shrimp farms across Asia, Sim said
he would barely cover the cost of fuel for his two-day voyage at
the far reaches of the Mississippi Delta.
The Cambodian immigrant got 75 cents a pound for his
mid-size shrimp - less than half last year's price - from the
Ditcharo Seafood dock in Buras, Louisiana.
The woes of the Asian-American shrimping community here
highlight a unique clash of interests with a part of the world
their families largely left in the 1970s and 80s, now brought to
a head by plunging prices and a looming Pacific trade deal.
Gulf shrimping looks vulnerable as President Barack Obama's
signature 12-nation trade pact nears its final negotiating
stages. U.S. officials say the Trans-Pacific Partnership will
not unleash a surge of imports as there are no general tariffs
on shrimp - unlike other industries such as textiles and autos.
But Gulf shrimpers fear that the TPP's food safety
provisions will make it harder to stem the flow of cheap
imported shrimp raised on illegal antibiotics. Ultimately, they
say, the low prices may do what Hurricane Katrina and the BP (LONDON:BP) oil
spill could not: put them out of business and end a way of life.
"We can't make money," Sim told Reuters aboard the Miss
Wannda, his weathered fiberglass "skimmer" vessel. "I'll
probably lose the boat if it goes down more than this. Right
now, we're working for the diesel only."
The TPP is a centerpiece of Obama's push to reassert U.S.
economic power in Asia. It would include Vietnam and Malaysia,
the fourth- and eighth-largest exporters of shrimp to the United
States last year, and two countries frequently criticized for
antibiotics use in aquaculture.
The sweet crustacean is America's favorite seafood, with 1.1
billion pounds consumed in 2013. But more than 90 percent of it
is imported, mostly from farms in Southeast Asia, India, China
and Ecuador.
At the moment, the world is awash in shrimp.
A wave of disease that decimated Thai, Chinese and
Vietnamese shrimp ponds in 2013 and 2014 sent prices higher. But
Gulf shrimpers are now feeling the brunt of full production,
especially as India and Indonesia add capacity, putting pressure
on Vietnamese farmers as well.
So far in 2015, U.S. shrimp imports are on pace to top their
record in 2006 before global economic woes cut demand.
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FISHING HERITAGE
Starting from war refugees applying their coastal fishing
skills, the Gulf's Southeast Asian community quickly grew.
Ethnic Vietnamese and Cambodians now make up around 40 percent
of the Gulf's shrimp fishermen.
New Orleans-based fisherman Thieu Tran, who left Vietnam 30
years ago, acknowledged that shrimp exports have helped his
former homeland. He said the TPP will help it even more, but
believes Washington should protect U.S. shrimpers.
"We're now worried that shrimp prices will put us out of
business," Tran said through an interpreter.
The number of jobs in Louisiana's $1.9 billion seafood
industry shrank to 33,391 in 2012 from 46,389 in 2003, according
to National Atmospheric and Oceanographic Administration data,
with more than 20 seafood processing operations closing.
With the TPP being negotiated in secret, suspicions abound
that it can only mean more bad news for the Gulf.
Virtually the only duties on shrimp imports are those
imposed by the U.S. Commerce Department to combat unfair
subsidies or "dumping" at prices below production costs. It has
just cut average duties on Vietnamese shrimp to 0.9 percent from
6.4 percent after recalculating cost data.
Many in the Gulf industry are pinning their hopes on U.S.
ports turning away more shrimp tainted with illegal antibiotics.
The U.S. Food and Drug Administration currently has the capacity
to inspect only about 1 percent of U.S. seafood imports.
Echoing concerns raised by some anti-trade U.S. lawmakers,
Louisiana Shrimp Association Director Clint Guidry said he
believes the TPP may make it harder to strengthen those
inspections, because such actions could bring court challenges.
U.S. lawyers representing Vietnam's seafood exporters are
preparing to challenge a separate U.S. Department of Agriculture
inspection program for catfish once it is launched. They argue
that the new rules could cripple imports of Vietnam's popular
pangasius catfish ID:L1N11E0WG .
"In my experience, if you're not at the negotiating table,
you're usually what's for dinner," Guidry said.
But the U.S. trade agency insists that based on completed
sections of the talks, the TPP will take steps to raise food
safety standards for member countries, bringing them in line
with science-based U.S. rules.
"TPP will not require lower food safety standards or any
changes to existing U.S. laws or regulations," said Matthew
McAlvanah, a spokesman for the U.S. Trade Representative.
"It will also include tough new customs provisions and rules
of origin to help us combat illegal transshipment, including of
seafood, and identify food safety risks before they get to our
shores," he said.
Gulf shrimping interests have complained that Chinese shrimp
has been shipped through Malaysian exporters to skirt high
anti-dumping duties on China.
ANTIBIOTIC ANXIETY
At the recent VietFish expo in Ho Chi Minh City, Vietnam,
shrimp exporters expressed similar angst about low market prices
and the TPP's effect on their industry.
Top on their list of concerns is that the TPP will
ultimately force shrimp farmers to give up their use of
antibiotics, and that compliance with country-of-origin rules
and environmental and labor standards will raise costs.
Several farmers, speaking to Reuters on condition of
anonymity due to the issue's sensitivity, said the use of
antibiotics is still widespread in Vietnam despite government
efforts to promote new farming techniques without the drugs.
But shrimp ponds remain susceptible to diseases that can
wipe out entire farms overnight.
"These technical barriers are unreasonable," said Nguyen Van
Kich, chairman of Cafatex Corp, a Vietnamese shrimp exporter.
"Raising shrimps and fishes ... without medicine, they are
unlikely to survive."
Tran Van Linh, chairman of Danang-based Thuan Phuoc Seafoods
& Trading Corp, said he believes that under TPP, Vietnamese
exporters could no longer buy shrimp from India to process and
re-export. Vietnamese farmers would also have to develop more
brood stock, now mostly imported, so that their shrimp is
completely Vietnamese.
But Linh said this will hand an advantage to India, a
non-TPP country with lower costs that in 2013 supplanted
Thailand as the biggest shrimp exporter to the United States.
Faced with rock-bottom prices, U.S. shrimpers are trying to
market wild Gulf shrimp as a premium product, with mixed
results. Part of the problem is that the industry is set up to
service large grocery chains and other institutional buyers that
have grown accustomed to the regularity and uniformity of
imported supplies, said Todd Rushing, co-founder of
Shrimptrader.com, an online sales platform based in New Jersey.
"Southeast Asia will still find a way of getting cheap
product into the United States," he added.
Rushing said he is getting more inquiries from shrimp boat
owners to offer product on his website directly to retailers.
Some are taking matters into their own hands.
George Barisich, who fishes out of Shell (LONDON:RDSa) Beach, Louisiana,
said he sold about 600 pounds of his largest shrimp, about 10
percent of a recent haul, directly to retail clients at $5 a
pound. The dock was offering only $1.50.
Lance Authement, a fourth-generation shrimp processor in
Dulac, Louisiana, has a simpler proposition.
"People are going to have to eat more shrimp or the
government's going to have to control the amount of shrimp
coming into the country," he said. "One of the two."