Ecuador shrimp duty waiver gives India hope

In a move that could augur well for the Indian shrimp industry, the US Department of Commerce (DoC), in a preliminary ruling, has decided to eliminate the 3.58 per cent anti-dumping duty on frozen warm water shrimp imported from Ecuador.

The decision came in the wake of a World Trade Organization order to reconsider the duty rates as the method of calculating, widely known as zeroing, was in violation of WTO norms. The final ruling is expected by August 20.

The decision has provided a ray of hope to the Indian shrimp export industry as India's case is under the consideration of a WTO expert panel.

Moreover, the second administrative review on anti-dumping duty is currently on.

In the first administrative review, DoC had raised the weighted average duty from 10.17 per cent to 10.54 per cent on a preliminary basis and also fixed a punitive rate of 82.30 per cent for 17 exporters who had not responded to the review. The final rates according to the first review will be announced by August.

Meanwhile, exporters have raised serious reservations about the approach of the Indian government, especially Department of Commerce, as they had not taken up the zeroing issue with the US DoC.

Even though India had lodged a complaint with the WTO on June 6, 2006, it had not followed Ecuador's strategy of raising violations on zeroing principles and only argued against the customs bonding.

According to the principle of zeroing, anti-dumping duty should not be imposed on exporters who are selling their products at a higher price tag than that calculated in line with their production cost. As per WTO principles, this should not be considered as dumping of products.

A kochi-based exporter said that if the government had taken up the issue seriously with the WTO and the US DoC, India also would have got a favourable decision.

This decision is likely to have a major impact on countries hit by the anti-dumping duty like Thailand, China, Vietnam and Brazil.

India's export to USA has dropped by 30.77 per cent at 43,851 tonnes and earnings dropped to Rs 1350.47 crore, down by 20.50 per cent due to the anti dumping duty and customs bond requirement in 2006-07. The number of exporters had also dropped to 80 from 179 in 2001-02.