Congressman Faleomavaega announced today that he has submitted testimony to the International Trade Commission (ITC) opposing duty-free treatment for canned tuna products from Thailand. StarKist and Faleomavaega are united in their position and are working together to save the jobs of more than 5,100 cannery workers in American Samoa.
“First and foremost, we have strongly recommended that tuna in airtight pouches and canned tuna in oil and water be treated as highly import sensitive in the upcoming U.S.-Thailand Free Trade agreement negotiations,” Congressman Faleomavaega said. “In 1984, 1986, 1990, and 1992, the ITC conducted section 332 investigations and the results of each investigation clearly establish that canned tuna is an import sensitive product. Twelve years later, it can be argued that the outcome of another section 332 investigation would yield the same results.”
“Despite these outcomes, the United States continues to negotiate free trade agreements that place the U.S. tuna industry and the jobs of more than 5,100 workers in American Samoa at risk. The United States Territory of American Samoa lies 2,300 miles southwest of Hawaii, covers a land area of 76 square miles, has a population of less than 65,000 and a per capita income of $4,300 per year. Due to scarcity of land, labor and capital, economic growth and development in American Samoa has been limited.”
“In fact, more than 80% of American Samoa’s economy is dependent either directly or indirectly on two United States tuna canneries (StarKist and Chicken of the Sea) which employ more than 5,150 people or 74 percent of the workforce,” the Congressman said. “As was repeatedly stated during the Andean Trade Preference (ATPA) debate, a decrease in production or departure of one or both of the two canneries in American Samoa could devastate the local economy resulting in massive layoffs and insurmountable financial difficulties.”
“Any fluctuation in global tariff rates also places American Samoa’s canneries at risk. As StarKist has repeatedly stated, the only market for tuna from American Samoa is the United States. The reason for this is simple. The Andean countries, the ASEAN member nations, and the European Union impose high duties on tuna from the U.S. while the U.S. continues to reduce tariff rates on tuna from foreign countries.”
“While the U.S. lowers tariff rates for foreign countries, the Andean countries and ASEAN nations are increasing their production and fleet capacity. Today, Ecuador and Colombia have the capacity to jointly process 2,250 tons of tuna per day or 48.6 million cases per year. Given that total U.S. consumption is only about 48 million cases per year, the Andean countries have the production capacity to supply the entire U.S. market and wipe out the economy of American Samoa. If the wage differential between American Samoa ($3.66 per hour) and the Andean countries ($0.60 per hour) is also considered, it is reasonable to conclude that American Samoa will not be able to fairly compete against Andean competition if U.S. tariff rates are reduced or eliminated.”
“The same can be said if tariff rates are reduced or eliminated for the ASEAN nations, including Thailand. ASEAN nations are the largest foreign suppliers of tuna to the U.S. market and Thailand supplies the U.S. with more tuna than any other foreign nation,” Congressman Faleomavaega said. “While some contend that Thailand and other ASEAN member nations have been disadvantaged as a result of the ATPDEA, I would like to set the record straight.”
“From January 2003 to August 2003, Indonesia, Malaysia and Thailand sent a combined total of more than 3 million kilos of albacore tuna into the U.S. The Andean countries sent a combined total of 408,000 kilos. From January 2003 to August 2003, ASEAN member nations sent more than 21 million kilos of lightmeat tuna to the U.S. The Andean countries sent less than 4 million kilos. Given these facts, it is a stretch of the imagination for anyone to assert that the economies of ASEAN member nations have suffered as a result of the ATPDEA. It is also unfair for the U.S. to reduce or eliminate tariff rates for Thailand based on this faulty premise.”
“Clearly, duty-free treatment for canned or pouched tuna products poses a tremendous threat to the stability of the U.S. tuna and fishing processing industries and to the economy of American Samoa. Although the pouched tuna business is currently a niche market estimated to be about 6% of the total tuna business, conservative estimates suggest that the pouched business will grow three, five, and ten years at 75%, 50%, and 25% respectively. This equates to 8% share by 2005, 12.2% by 2007, and about 15.4% of total U.S. tuna trade by 2012.”
“If pouched tuna from Thailand is granted duty preference, it will have the same impact on pouched tuna as imports from Thailand have had on canned tuna pricing which is a 53% reduction since 1980 when adjusted for inflation. Put another way, pouched tuna prices will drop, tuna consumption will switch from cans to pouches, and pouched tuna will become a mainstream rather than a niche product.”
“Given the adverse impact this will have on American Samoa, I am urging U.S. negotiators to keep in place what Congress agreed to last year during the Andean trade debate and that is to exclude canned tuna from preferential trade treatment and include a rules of origin provision on any and all pouched tuna permitted to enter duty-free. Further, and in the case of Thailand, I am requesting that all albacore tuna products be excluded from consideration and that lightmeat tuna products processed in pouches be kept under the current tariff structure until December 31, 2009 and then any duty granted be phased in from January 1, 2010 through December 31, 2014.”
“I believe these exclusions and inclusions should apply to any agreement that may be considered by the United States, including the Thailand Free Trade agreement. I especially believe rules of origin are necessary to protect our U.S. tuna fishing fleet which contributes more than $25 million per year to American Samoa’s economy,” Faleomavaega said. “The position of the U.S. boat owners was recognized in the duty privileges that were given to the Andean countries. ATPDEA regulations require that the fish used to pack duty free pouches has to either be from U.S. or Andean flag vessels, and I believe rules of origin provisions should be included in any and all future trade agreements.”
“Finally, I am pleased that StarKist Seafoods stands with American Samoa in opposing tariff relief for ASEAN nations, including Thailand. The other two U.S. canneries, Chicken of the Sea and Bumble Bee, stood with American Samoa to oppose tariff relief for the Andean nations. Both Chicken of the Sea and Bumble Bee argued that it would destroy the U.S. tuna industry if tariff rates were decreased for the Andean countries and given their position on Andean trade I believe any arguments they put forward to support tariff relief for the largest foreign supplier of tuna to the U.S., namely Thailand, should be dismissed.”
Congressman Faleomavaega also pointed out in his testimony submitted to the ITC that Chicken of the Sea is owned by its Thailand parent company, Thai Union. “Thai Union is one of Thailand’s largest producers of canned tuna and I submit that it is a conflict of interest for its subsidiary i.e., Chicken of the Sea, to call for duty-free treatment for canned and pouch products from Thailand,” the Congressman said. “For the ITC to consider testimony from Chicken of the Sea would be to consider testimony from a foreign cannery and this is neither the intent nor the purpose of ITC hearings. Furthermore, to acquiesce to Chicken of the Sea’s demands would give Chicken of the Sea unfair advantage in the U.S. marketplace and would drive lightmeat production out of American Samoa to Thailand.”
“In the end, it is the people of American Samoa who will suffer economic loss as a result of the inclusion of canned or pouched tuna in U.S. free trade agreements. To offset our loss, I am hopeful that, in the case of Thailand, U.S. negotiators will support the precedent already established by P.L. 107-210, the Andean Trade Preference Act, in addition to the requests I have made that all albacore tuna products be excluded from consideration and that lightmeat tuna products processed in pouches be kept under the current tariff structure until December 31, 2009 and then any duty granted be phased in from January 1, 2010 through December 31, 2014.”
“Given that none of the major U.S. canneries are united in the testimony they have presented to the ITC, I have asked the ITC to support the position of StarKist, American Samoa and the U.S. tuna boat owners who are working together to protect the U.S. tuna industry and the jobs of more than 5,100 workers in American Samoa,” the Congressman concluded.