ITC Defends Numerous Aspects of Injury Determination Regarding Frozen Shrimp
In a 108-page brief filed Nov. 24, the International Trade Commission opposed shrimp exporters’ multiple challenges to an affirmative injury finding regarding frozen shrimp from Ecuador, India, Vietnam and Indonesia (Industrial Pesquera Santa Priscila v. United States, CIT # 25-00029) (Seafood Exporters Association of India v. United States, CIT # 25-00031) (Shrimp Committee of the Vietnam Association of Seafood Exporters and Producers v. United States, CIT # 25-00032).
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
The exporters filed three complaints. Ecuadorian exporters argued that the ITC’s investigation failed to consider increases in diesel fuel prices (see 2502190026). Indian exporters made the same argument, and they also claimed the ITC overlooked non-import-related competition conditions in the U.S. shrimp market and wrongly found uncooked and cooked frozen shrimp to be like products (see 2502250018). And the Vietnamese exporters said the ITC was mistaken to find both that U.S. wild-caught shrimp and imported farm-raised shrimp were interchangeable and that the investigation period saw “significant price underselling” by imports (see 2502240053).
Ecuadorian and Indian exporters were wrong that rising diesel costs were the real cause of injury to domestic shrimp producers, the ITC said first. Had they been, the domestic producers’ prospects would have improved when fuel costs dropped nearly 30% by 2023, it said. Instead, it said, the producers saw their lowest operating ratio of the investigation period “as their net sales AUV declined by far more than the unit value of their fuel and oil expenses.”
It alleged that the Ecuadorian exporters’ “selective presentation” of fuel costs “create[d] an apparent ‘trend’ of fuel prices continuously increasing” throughout the review period. In actuality, costs rose during the first half of the period and declined during the second half, it said.
It also disagreed that it hadn’t addressed those arguments in its injury determination, saying it did so “thoroughly.”
Next, the commission said that it had considered evidence and arguments offered by Indian exporters regarding the supply constraints faced by U.S. producers -- which the Indian exporters argued meant the U.S. industry couldn’t have been injured by imports -- but found both unpersuasive.
It said more than 90% of U.S. producers reported facing no such constraints. It agreed that the exporters’ report, produced by ION Economics, a consultancy, demonstrated that “there was ultimately some biological limit on the quantity of warmwater shrimp that could be harvested during any particular period of time.” But it said it reasonably disagreed with the report’s other conclusions and weighed domestic producers’ evidence more heavily. It also said that a “substantial increase” in U.S. producers’ inventories at the end of 2022 and 2023 showed that they were operating nowhere near a biological limit yet.
Rather, it said, domestic production volumes were based on “the financial incentives for fishermen to harvest shrimp” and, as a result of increased competition with imports reducing prices, “many [U.S.] fishermen had been reducing their fishing efforts or abandoning them entirely.”
And it also said the Indian exporters were wrong that raw and cooked frozen shrimp couldn’t both be considered domestic like product. The two shared physical characteristics, initial processing steps, end customer perceptions and channels of distribution, it said.
It acknowledged that “most responding purchasers (15 of 20 firms) reported that raw and cooked shrimp were never interchangeable,” it said, but found that this was outweighed by other evidence, such as the two types’ similar packaging and the fact that they were marketed and stocked “side-by-side.”
Finally, the ITC said that, despite Vietnamese exporters’ claim, competition between imports and U.S. shrimp was not attenuated because U.S. wild-caught shrimp and imported farm-raised shrimp were also interchangeable.
It said that a majority of U.S. producers reported that farm-raised and wild-caught shrimp were interchangeable. On the other hand, it said, a majority of importers said that they were never interchangeable, and purchasers also “reported limited interchangeability.” Despite that, the commission said, other record evidence supported interchangeability.
“[The ITC] found that … distributor and retailers discouraged U.S. processors from marketing their shrimp as domestic and wild-caught,” it said. “It found that consumers often do not know whether they have purchased wild-caught or farm-raised shrimp, and simply request shrimp without regard to its origin."
And it defended its finding that the investigation period saw significant underselling. The Vietnamese exporters’ opposition was based on an incorrect calculation of the domestic industry that excluded fishermen, it said, and “an inappropriate comparison of interim 2024 to full year 2021.”