(seafood.com) European buyers of US pollock blocks and surimi are already facing a difficult situation: The declining Euro is making purchases more expensive, at the same time some types of block prices have begun to tick up. Now, they may face the burden of a 13.7% tariff as well.
At the recent meeting between NOAA head Jane Lubchenco and Maria Daminaki, the European commissioner for fisheries, the US raised the issue of pollock tariffs, that would fall on both Alaska pollock blocks and surimi.
Current regulations call for a tariff of 13.7% on pollock blocks, and 14.2% on surimi. For many years those tariffs have been suspended if the block or surimi products are used for subsequent manufacturing of additional value added product.
It is unclear where the push is coming from to do away with the exemption, putting the tariffs into force. It could be a bureaucratic issue within the EU Commission, or as some have suggested harvester groups could be behind the change. But no European harvesters land fish that compete directly with Alaska pollock.
Such an outcome would have a severe impact on major seafood manufacturers in Europe, at a time when they are already struggling with higher import prices and declining demand. French demand for pollock products is expected to be flat. In the UK, Tesco reported today a 1.4% drop in sales, and a 4% drop on the continent, and is struggling to lower pricing.
Since the beginning of the year, the euro has declined around 4% against the dollar, and further declines are likely.
In this environment, manufacturers are in no condition to absorb a 13% to 14% tariff.
According to a US pollock industry source, "we are aware that as part of the EU Common Fisheries Policy review that drafts are being floated that could propose higher effective tariff rates. No specific policy proposal has been released by the EU though, so we dont know how serious this issue might be."
"Our primary interest is in Alaska pollock, Pacific whiting or surimi-based products. We are not aware of anyone who might benefit increasing effective tariff rates on those products. First and foremost, the products we export to Europe dont compete with any products made from fish harvested by EU fleets. Second, higher tariff rates would hurt European value-added processors and their workers as pollock products undergo a substantial amount of further processing within Europe. Finally, increased tariff rates would raise costs for European consumers."
The US industry and government is gearing up to fight this economically dangerous move. However, under current WTO agreements, the EU has the right to adjust pollock tariffs, so there is not a legal issue. Instead, the argument will be an economic one: why hurt seafood manufacturing at a time when they need to create as many jobs as possible.