Ecuador's shrimp duty win gives hope to local exporters

The US administration has decided to abolish the anti-dumping duty on shrimp imports from Ecuador, rejecting an appeal of the Southern Shrimp Alliance (SSA). Accordingly, the duty is expected to be withdrawn by August 20.

The decision, the first of its kind after imposing the duty on shrimp imports into the US in 2005, is expected to have a positive impact on India and other exporting countries such as Thailand, Vietnam, China and Brazil. The second administrative review by the US Department of Commerce (DoC) over the anti-dumping duty on Indian shrimp exports is now in process. Besides, the World Trade Organisation's (WTO) expert panel is also expected to give its verdict in the case shortly.

Ecuador had earlier won a case at the WTO, arguing that the methodology used for calculating the duty without adhering to the principles of zeroing prescribed by the world trade body was illegal. The US administration has been calculating the duty based on prices of goods sold below the calculated dumping level and without considering average prices. The WTO had instructed the (DoC) to recalculate the duty on imports from Ecuador using the correct principles of zeroing.

The DoC had issued its preliminary findings in May based on fresh calculations and two major Ecuadorian shrimp exporters were imposed the duty at 0 and 1.75 per cent rates. With the rates below the minimum duty level of 2 per cent, the average duty for all the Ecuadorian respondent exporters is now zero. In effect, there is no longer any duty on shrimp exports from Ecuador as against the earlier weighted average duty of 3.58 per cent.

The decision in Ecuador's case is final and no further appeals would be allowed. The US customs department has also been instructed to release all bonds and refund all cash deposits to importers.

As regards India, the first administrative review by the DoC had raised the weighted average duty on the country's exports from 10.17 per cent to 10.54 per cent on a preliminary basis after fixing a punitive rate of 82.30 per cent on 17 exporters, who had not responded to the review. The final rates, according to the first review, will be announced by August 2007.

Meanwhile, the DoC has selected two Indian shrimp exporters as mandatory respondents for the second administrative review. Along with India, Thailand too had complained before the WTO and the final hearing in the case was completed in Geneva last week.

The dispute settlement body of the WTO had appointed an expert panel and the preliminary hearing was wrapped up on June 20.