U.S. Trade Law And Imported Farmed Atlantic Salmon: Protectionism Or Protection Of Free Trade

• Main Author: Peterson, Mark T.
• Format: Text
• Language: unknown
• Published: University of Maine School of Law Digital Commons 2016
• Subjects: Canada; Norway; Atlantic salmon
• Online Access: https://digitalcommons.mainelaw.maine.edu/oclj/vol2/iss1/3; https://digitalcommons.mainelaw.maine.edu/cgi/viewcontent.cgi?article=1263&context=oclj

International trade in fishery products is becoming increasingly important. This is evidenced by the number of international disputes concerning fishery products. Conflicts have arisen between the environment and fish trade, as was the case in the U.S.-Mexican tuna-dolphin dispute. Disputes have arisen over import regulations. Disputes have also developed over the management of fishery resources within a state's 200 nautical mile Exclusive Economic Zone. One such disagreement, between the United States and Canada, concerned wild salmon and herring processing regulations. The United States is one of the most important seafood trading countries in the world. This importance is illustrated by the fact that the United States was the world's second largest importer of seafood products in 1991, importing some $6 billion worth, and the world's largest exporter of seafood products, exporting $3.5 billion worth. As the significance of seafood grows, and existing fisheries become depleted, the possibility for conflict between the United States and other seafood trading countries grows. International trade law and practice is a factor materially influencing world fishery production and trade, a better understanding of which is important to help avoid future costly dispute settlement. One of the fish stocks important to the seafood trade of the United States is salmon. U.S. consumers consumed an average of 1.162 pounds of salmon in 1992, making it the fourth most popular seafood that year. In 1993, the average American consumed 15 pounds of seafood, 0.99 pounds of which was salmon, the fifth most popular U.S. seafood. The numbers for 1994 were essentially the same. The majority of salmon farmed in the United States comes from Maine. Maine salmon farmers contended with stiff competition from imported Norwegian farmed Atlantic salmon until 1989. In 1990, twenty-one Maine and Washington Atlantic salmon producers formed the Coalition for Fair Atlantic Salmon Trade (FAST), and filed a petition with the U.S. International Trade Commission (USITC) and the U.S. International Trade Administration (USITA) to complain about alleged subsidizing of the Norwegian Atlantic salmon farming industry by the Norwegian government. The petition also alleged that Norwegian Atlantic salmon was being sold at less than fair value in the United States and that this practice was harming the U.S. salmon industry. During its subsequent investigation, the USITA found that the subject imports were being subsidized and were being sold at less than fair value in the United States. The USITC found that these imports were materially injuring the domestic Atlantic salmon farming industry. Therefore, countervailing and antidumping duties were imposed on Norwegian imports of fresh and chilled farmed Atlantic salmon. Norway then appealed these determinations to the U.S. Court of International Trade. This Court determined that the USITC had not properly evaluated a decline in Norwegian imports in 1990. The Court also felt that there was not sufficient evidence to support the USITC determination of injury to the U.S. industry at the time of its final determination. The Court reversed and remanded the final USITC determination because of these deficiencies. The Court of International Trade's decision forced the USITC to reevaluate and justify its earlier determination of injury. On reconsideration, the USITC found that other factors, namely, the appreciation of the Norwegian kroner to the U.S. dollar, an increase in exports to the European Community, and one exporter's decrease in exports to the United States, did not account for the decline in subject imports, but that the initiation of its preliminary investigations did. The USITC also explained that it had utilized 1989 import data instead of 1990 data when determining present injury, because the later data would have reflected the reduction in Norwegian imports to the United States resulting from the imposition of the duties. When Norway appealed the final determinations of the USITC and imposition of duties by the USITA to the U.S. Court of International Trade, it also petitioned the General Agreement on Tariffs and Trade (GATT) to establish two panels, one to review the U.S. imposition of countervailing duties, the other to look into the U.S. imposition of antidumping duties. GATT agreed to establish the two panels, which each then heard the arguments of the two parties and rendered a decision. The GATT Panel considering the countervailing duty agreed with the United States on all points. The Panel agreed with the determination of the United States, not because its methods had been prescribed by the text of GATT and its side agreements, but because there was no prescribed methodology in the Agreement to use in determining the existence of a subsidy, or in defining what types of programs were countervailable. The United States' determination of injury was found acceptable in the absence of such explicit criteria, because the United States had explained why it had used 1989 data to determine present injury and not 1990 data. Thus, the lack of a prescribed methodology worked in the favor of the United States. The Panel examining the antidumping duty determination did not wholly agree with the United States. Although the Panel agreed with most of the U.S. practices in the case, it felt the United States had not properly obtained a representative sample of Norwegian salmon farms in determining the relevant cost of production. However, the Panel did not therefore find that the general determination and imposition of duties by the United States was inconsistent with its international obligations. This conclusion was again reached generally because there had not been a prescribed methodology in the GATT. Since the United States had at least considered alternative factors affecting the U.S. industry, and had justified why it used the information it had, U.S. practice was found to be compatible with its international obligations. This dispute, as examined in this article, provides a case study of U.S. international trade law and practice and its compatibility with the General Agreement on Tariffs and Trade. The study is designed to answer four primary questions: 1) is U.S. trade law being used as a protectionist measure to protect U.S. industries from unfair foreign competition; 2) is U.S. practice incompatible with international trade law; 3) did the removal of Norwegian Atlantic salmon from the U.S. market open the door for other producer countries; and, 4) was the above opportunity capitalized on by Maine, the initiator of the investigations, or by other producer countries, namely Canada and Chile? Before addressing these questions in light of the U.S.-Norway dispute, the next section will provide some general legal background.