Greg Hitt and James Hookway report on the use of U.S. anti-dumping laws for something similar to private extortion in Monday's Wall Street Journal: U.S. Shrimpers Haul CashFrom Lower-Cost Rivals (April 2). How much would you, as an exporter to the U.S., be willing to pay an association that had the ability to create a lot of market uncertainty for you through manipulation of U.S. anti-dumping laws?
In 2005, the Southern Shrimp Alliance won an anti-dumping tariff case against foreign shrimp producers. Under the Byrd Amendment, about $100 million in fines from the tariffs were distributed among shrimpers and processors:
...But as 2005 unfolded, alliance leaders worried shrimp prices were still too low and imports high. Moreover, at the end of 2005, Congress was moving to repeal the Byrd amendment -- and end the fishermen's new source of cash.
Mr. Williams and other alliance members decided to turn up the heat on foreign competitors. The goal was to persuade Commerce to raise tariffs or to win additional concessions outside the trade case.
Under U.S. law, any party in a dumping case can seek a Commerce Department review of tariff levels at the annual anniversary of the imposition of the tariffs. Such a request can be withdrawn within 90 days, ending the government review. For U.S. shrimpers, the right to withdraw would serve as critical leverage in negotiations with overseas competitors.
In February 2006, the first anniversary of the shrimp tariffs, the alliance's lawyers filed a sweeping review request, citing some 800 foreign producers and processors....
That request, along with another that the Commerce Department ultimately rejected, added to the uncertainty facing foreign exporters. Rather than fight, many quickly offered to settle with the alliance...
The foreign shrimpers admitted no wrongdoing, but said they settled with the alliance to eliminate market uncertainties. "It's very risky doing business in a place where you don't know what the price and the value of the tariff will be," said Nguyen Hoang Phuong, a director at Vietnam's Ut Xi Aquatic Products Processing Corp....
Eventually, Mr. Williams's group reached settlements involving cash payments with 104 foreign shrimp companies. Unlike the Byrd money, which was divided among individual shrimp producers and processors, the settlement payments went to the shrimp alliance. The alliance and foreign exporters declined to give dollar figures [although the Journal speculates that millions were involved - Ben].
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