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JAKARTA. The government has prepared necessary actions to defend the shrimp industry in the looming legal battle against the United States (US) in which Indonesian shrimp exporters have been accused of enjoying government subsidies.
Trade Minister Gita Wirjawan said the government would take all the necessary legal actions to prove its claim that it did not provide any subsidies for shrimp farmers, producers and exporters.
“We’ve consulted with international lawyers and have built arguments [to maintain our position],” Gita said in Jakarta over the weekend.
The minister added that several industry associations in the US, particularly frozen warm water shrimps users, have lent their support to Indonesia’s position.
Last week, the US International Trade Commission (ITC) preliminarily determined that there was “reasonable indication” that the US industry had been injured by subsidized imports from Indonesia and six other countries — China, Ecuador, India, Malaysia, Thailand and Vietnam.
With this move, the US Department of Commerce has inched closer to imposing countervailing duties, which could disrupt shipments of shrimp to the US, affecting not only the Indonesian shrimp industry, but also US importers and consumers.
The probe was conducted in response to a petition lodged last December by the Coalition of Gulf Shrimp Industries, which represents shrimp fishermen in Alabama, Florida, Georgia, Illinois, Louisiana, Mississippi, South Carolina and Texas, arguing that government-subsidized imports since 2009 have “suppressed and depressed domestic prices”, reducing sales in the US industry and destroying jobs.
Specifically for Indonesia, the group said, that there were policies issued by the Indonesian government that have benefitted its shrimp producers and exporters. The policies include government loans for the fishing and aquaculture sector, provisions of shrimp breeding stock, export credit insurance and guarantees, exemptions of import duty and value added tax in bonded zones and tax incentives from the Investment Coordinating Board (BKPM).
Biggest export destination
According to US data, Indonesia is the second-biggest contributor after Thailand to overall US shrimp imports. The imports, valued at US$4.3 billion in 2011, are now the subject of investigation.
Currently, the US is Indonesia’s biggest shrimp export destination, followed by Japan, China and the European Union, according to Indonesia’s Trade Ministry.
Shrimp exports to the US surged by an average of 4.2 percent from 2007 to $559.4 million 2011, accounting for 48.2 percent of overall shrimp exports, trade statistics shows.
In January-October period last year, shrimp shipments to the country stood at $484 million, up moderately by 4.8 percent from the same period in 2011.
The Trade Ministry’s trade defense director, Ernawati, said that despite potential countervailing duties that could be put in place by the US, Indonesia would still continue its efforts to win the case.
“It’s still a long process. We cannot predict the results right now,” she said in a text message over the weekend.
Following the ITC’s stance, Ernawati said the Indonesian government and the industry would start calculating the potential punitive duties. The government had appointed four respondents comprising two mandatory and two voluntary respondents to answer the US’ further requests for explanation.
The appointed firms are slated to submit the questionnaires on Feb. 24, while the government will file a similar response on March 25, according to Erna.
The US Department of Commerce will continue its investigations on the shrimp imports with its preliminary countervailing duty determinations due about March 25.
The final decision in the case that may lead to the imposition of countervailing duties is scheduled for June 6.
