Congressman Faleomavaega announced today that he has submitted a statement for the 2004 World Tuna Conference.
In his statement the Congressman said, “Although I cannot join you at this year’s world tuna conference due to Memorial Day Services to honor American Samoa’s WWII veterans, I am pleased to offer a statement to be included in your program.”
“I last attended the World Tuna Conference in 2002. At that time, the U.S. Territory of American Samoa was facing one of its most critical hours as a result of aggressive efforts by the H.J. Heinz Co., and its then subsidiary Star Kist Seafoods, to include canned tuna in the Andean Trade Preference Act (ATPA). As part of the ATPA and in an effort to curb drug production in Latin America, the U.S. agreed to provide preferential, mostly duty-free treatment to certain products exported to the U.S. from Bolivia, Colombia, Equador and Peru. Had Star Kist succeeded in its effort to include canned tuna under the provisions of the ATPA, American Samoa would have faced massive unemployment and insurmountable financial difficulties.”
“Briefly, the economy of American Samoa is more than 85% dependent either directly or indirectly on the U.S. tuna fishing and processing industries. Two canneries, Chicken of the Sea and Star Kist Samoa, employ more than 5,150 people, or 74% of the workforce. American Samoa processes about 950 tons of tuna per day or 20.5 million cases per year. As Star Kist has repeatedly stated, the only market for tuna from American Samoa is the United States.”
“In part, this is due to global tariff rates that block out competition in foreign countries. For example, the Andean countries impose tariff rates of 20% on tuna originating from the United States. This makes it practically impossible for the U.S. tuna industry to compete with Ecuador, Colombia, etc. On the other hand, Ecuador and Colombia have the capacity of jointly processing 2,250 tons of tuna per day, or 48.6 million cases per year. The Andean Pact countries also control more than 35% of the catch in the Eastern Pacific Tropic (EPT) and, in the past ten years, the Andean tuna fishing fleet has grown from about 20 to 90 fishing vessels.”
“Given that the U.S. consumes only 48 million cases per year and that the only market for tuna from American Samoa is the United States, the Andean countries have the production capacity and capability to supply the entire U.S. market and wipe out the economy of American Samoa. Additionally, labor rates for cannery workers are $0.69 per hour and less in the Andean countries but on average, $3.60 per hour in American Samoa. With these differences in wage rates, I did not believe then and I certainly do not believe now that Star Kist’s interest in the ATPA was to curb drug production in the Andean countries. More likely, I believe Star Kist fought the matter for one reason and one reason only – to displace $3.60 workers in American Samoa and exploit $0.60 labor in Ecuador,” the Congressman said.
“I do not believe this is what fair trade should be about and I am pleased to state that my colleagues in both the House and Senate agreed with me on this point and excluded canned tuna from the ATPA. Nevertheless, a Pandora’s box was opened and, as a result, I do not believe Star Kist is alone in its intent to exploit labor. The global tuna industry is a multibillion-dollar industry. It is estimated that there are over 400 vessels in the global purse seine fleet and global tuna consumption is estimated to be at about 165 million cases per year. Yet, canning capacity continues to be in excess of what is required to satisfy global demand. In fact, recent analysis reveals that world canning capacity is at least 40% greater than actual world canned production.”
“Southeast Asia continues to dominate both capacity and production. As the Ranking Member of the House International Relations Subcommittee on Asia and the Pacific, I am particularly concerned with how this situation will affect global tuna stock. More importantly, I am concerned that the inequities that exist between consumption and capacity have led to corporate greed. It is therefore my sincerest hope that there will be a shift in thinking on the part of our global tuna processors to avoid catastrophic consequences in the future.”
“First and foremost, I am hopeful that our processors will come to believe that employees are as important as stockholders and I am disappointed that this has not been the case. I am especially disappointed that Star Kist’s Vice President for Seafood Operations and Procurement recently stated that ‘one basic idea guides the actions of all major businesses. A business has an economic, legal, and moral responsibility to maximize the return it gives to its investors or shareholders.’ ‘Simply stated,’ he said, ‘businesses are obligated to maximize their profits.’”
“While I support business and the need for business to make a reasonable profit,” Faleomavaega said, to paraphrase President Franklin D. Roosevelt, I will not let calamity-howling executives with million-dollar incomes tell me that wage increases will have a disastrous effect on the U.S. economy or that we must exploit labor in developing countries to remain competitive. Neither will I support the notion that businesses are to maximize their profits without a moral obligation to also increase the wages of our cannery workers and, at the same time, offer fair and reasonable wages to working fishermen and equitable treatment for our tuna boat owners.”
“It is critically important for our global tuna industry to think in terms of how to strike a reasonable balance between corporate/shareholder needs and that of people who work in the so-called lowest levels of employment like fish cleaners, packers, fishermen, etc. It is for this reason that I believe a business has an economic, legal, and especially a moral responsibility to pay its employees enough to enable them to live. I also believe this should be the basic idea that guides the actions of all major businesses including those of the global tuna industry,” Faleomavaega said.
“Quite frankly, it is an insult to workers everywhere for executives who are paid top dollar to suggest that their only obligation is to their investors or stockholders. If this is the basic idea that guides business, so be it. But I believe that higher laws should guide our actions and that we have a moral responsibility to do unto others as we would have them do unto us.”
“Having spent the past sixteen years in the U.S. Congress fighting to protect the interests of American Samoa, I can tell you that I understand what our canneries are up against when it comes to competing against countries with low wage rates. I understand the realities of supply and demand. I understand that production will leave high cost locations when low cost alternatives exist. I also understand that these are the same words the U.S. tuna industry has been regurgitating for the past 47 years.”
“In 1956, as part of its lobbying effort to suppress wages in American Samoa and pay Samoan workers 27 cents an hour, Van Camp (now Samoa Packing) said that ‘a minimum wage of $1 per hour, as required under present law is unrealistic, unwarranted, and unquestionably will have a deleterious effect upon the economic and social structure of the islands.’ Forty-seven years later, neither Samoa Packing nor Star Kist thinks any more or less of our cannery workers and I can assure you that neither will think any more or less of cannery workers in Papua New Guinea, Ecuador, or Thailand for that matter.”
“This is why I call upon the global tuna industry to reconsider its ways of doing business. I understand that the use of precooked tuna loins as a raw material in canning operations significantly influences the amount of labor needed in the production process. The production of loins, including the butchering and cleaning steps, accounts for up to 80% of the cost of labor in a fullscale cannery. This means that if a cannery buys loins instead of whole fish, it can substantially reduce its labor costs. In other words, more loins means less labor. Less labor means downsizing, and downsizing means cannery workers will lose their jobs,” the Congressman said.
“In the case of American Samoa, I am deeply concerned with the number of loins that are being shipped to our canneries and I fear what this means for the Territory. Not only are 5,100 workers at risk, but our U.S. tuna boat owners are also at risk as a result of this trend. The U.S. tuna fishing fleet contributes more than $22 million per year to American Samoa’s economy and supplies 70% of the tuna processed in our canneries. On the other hand, tuna caught by foreign vessels and offloaded elsewhere for loin production prior to arriving in American Samoa is contributing little or nothing at all to our economy.”
“While I understand the need for our canneries to reduce costs, I cannot understand and will not support any increase in loins being shipped in from foreign countries to American Samoa for use in our canneries. Either this trend must stop or American Samoa be compensated for revenue lost as a result of backdoor attempts to reduce our labor force, suppress our wages, and allow foreign countries to send their tuna into the U.S. exempt from duty,” Faleomavaega said.
“I would also like to mention that we are also faced with the repercussions of Andean trade. Repercussions are being felt in the form of the Thailand Free Trade Agreement and in the form of the Fair Trade in Pouch Tuna Act which was introduced in the U.S. Senate in 2003. The Fair Trade in Pouch Tuna Act would eliminate tariffs on pouched tuna from ASEAN nations, including Brunei, Cambodia, Indonesia, Laos, Malaysia, Philippines Singapore, Thailand, and Vietnam.”
“This bill suggests that tariffs should be eliminated because the beneficiary countries of the Andean Trade Promotion and Drug Eradication Act (ATPDEA) are not subject to tariffs on pouched tuna and, as a result, ASEAN member nations are placed at a competitive disadvantage that has harmed the economies of these nations. However, I would like to set the record straight on this matter. From January 2003--August 2003, Indonesia, Malaysia, and Thailand sent a combined total of more than 3 million kilos of albacore tuna to the U.S. The Andean countries sent a combined total of 408,000 kilos. From January 2003 – 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. It is a stretch of the imagination for a bill to assert that the economies of ASEAN member nations have suffered as a result of ATPDEA.”
“Furthermore, the 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. With respect to the Thailand Free Trade Agreement, I 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.”
“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. Indeed, 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 hopeful that the United States will agree to keep in place what was agreed to last year during the Andean trade debate which is to exclude tuna from preference trade treatment and include a rules of origin provision on any and all pouched tuna permitted to enter duty-free. In the case of Thailand, I have also requested 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 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 U.S. International Trade Commission, I am hopeful that American Samoa will once again be successful in protecting its economy for generations to come. I am also hopeful that the U.S. will end the practice of using tuna as an instrument of foreign policy. For reasons completely unrelated to production, capacity, consumption, and conservation, we are now in a predicament where we must address issues of uneven policies and preferential treatment.”
“The task before us may not be easy. But whether we like it or not, the outcomes of U.S. trade negotiations matter not only to American Samoa but to the global tuna industry. This is why I believe we must work together to resolve the critical issues now confronting us in a way that will be beneficial to our tuna boat owners, our canneries and, above all, to the workers upon whose backs corporate profits are made,” the Congressman concluded.