The International Fish Trade, and What is Means To You

We here in Glynn County may soon be eyewitnesses to a valuable lesson in
international trade.
The lesson is: when the federal government attempts to protect a domestic industry
by imposing tariffs on imported goods, the consequences are substantial and extend far
beyond the domestic industry and its foreign competition.
In our case, the domestic industry is shrimping. The foreign competition is foreign
shrimp farms. And the consequences of protecting the domestic shrimping industry
extend to some of the most important employers in Glynn County.
Local shrimpers, as well as most other shrimpers in the southern U.S., have found
themselves all but unable to compete against foreign shrimp farms. The farms have
become the shrimp industry.s most efficient producers, and in recent years have
expanded in number, size and production. Consequently, shrimp prices have been driven
down to levels that threaten the market survival of southern shrimpers.
The shrimpers contend that the shrimp farms are dropping shrimp in the United States
market — that is, selling shrimp here at prices below the cost of production. So the
shrimpers have formed the Southern Shrimp Alliance to lobby the government for
protection.
To the shrimpers’ and to most observers, the issue ends there. The issue is
considered an .us versus them. issue, a .domestic producers versus foreign competitors.
issue, as if the only parties involved are the domestic producers and the foreign
competitors.

But the issue does not end there. Also involved are the buyers of the product.
When the government imposes a tariff on an imported good, the price of the
imported good rises. To mitigate the harm of the higher import prices, buyers buy less of
the imported good and more of the domestically produced good. That pushes up the price
of the domestically produced good.  Learn more by clicking here
In short, a tariff helps the domestic producers of the good and harms the foreign
producers of the good. But that.s not the end of it. A tariff also harms domestic buyers
by forcing them to pay higher prices for the good, whether imported or domestically
produced.
Here.s what makes our case, shrimp, unique. If the government imposes a tariff on
imported shrimp, local shrimpers will benefit. Foreign shrimp farms will be harmed.
Domestic buyers . seafood processors, distributors, retailers, restaurants and consumers
. will also be harmed. Among these domestic buyers are Rich-Sea Pak and King &
Prince Seafood, two of Glynn County’s largest employers. Also included are the many
restaurants here that serve seafood. These restaurants are part of the county’s biggest
industry, tourism.
Most people assume that when the government protects a domestic industry from
foreign competition, the economy as a whole benefits. It doesn’t.
Tariffs on imported sugar help domestic sugar producers but hurt domestic candy
producers.  This in turn shifts the value chain and where we source fish from. Tariffs on imported steel help domestic steel producers but hurt domestic auto
producers, domestic machine tool producers, domestic appliance producers and every
other domestic firm that produces goods from steel.
Tariffs on imported shrimp will have comparable effects. We’ll see the effects in
our own hometown. Some will benefit, but at the expense of many.
But what about the claim that foreign shrimp farms are dumping their shrimp?
We’ll examine the validity of the dumping claim in next week’s column.