The anti-dumping duty imposed by the United States on shrimp from India, as well as the mandatory customs bond (see earlier report ‘India to fight US shrimp restrictions’) has caused shrimp exports from India to the US to fall by 30.77% in 2007. The number of exporters too has dropped to 80 from 179 in 2001-02.

Seafood exporters from six countries -- India, Thailand, Vietnam, China, Ecuador and Brazil -- have to execute customs bonds over and above the anti-dumping/countervailing duty, to the Customs and Border Protection (CBP) of the US, for their shrimp export operations.

India challenged these requirements in the WTO in March 2006. An expert panel appointed by the disputes settlement body of the WTO started its meeting in Geneva on June 6, 2007.

The second administrative review by the US Department of Commerce on the same issue is currently on. The first administrative review raised the weighted average from 10.17% to 10.54% for India, and fixed a punitive rate of 82.30% for 17 exporters that had not responded to the review.    

Indian shrimp exporters have taken heart from a preliminary ruling of the US Department of Commerce, which has eliminated the anti-dumping duty of 3.58% on frozen warm-water shrimp imported from Ecuador.

The ruling came in the wake of a WTO directive to reconsider duty rates as the method of calculation -- widely known as zeroing -- that is against WTO regulations.

According to the principle of zeroing, anti-dumping duty should not be imposed on exporters that sell their products at a higher price than that calculated in line with their production costs.

June 11, 2007