Tuna pouches, which were not previously charged to enter the U.S., now pays a tariff of 12.5 per cent. (Photo: Stock File/FIS)
Due to tariffs, US reduces imports of Ecuadorian tuna
Friday, April 08, 2011, 00:40 (GMT + 9)
Since last February, when the preferential tariff expired, U.S. importers chose to reduce their purchases of Ecuadorian tuna and instead chose to import other tuna alternatives, such as from the Thai market.
This change occurred when tuna in pouches (bags) produced in Ecuador, which did not have tp pay fees to enter the U.S. market, began to pay a tariff of 12.5 per cent.
Pending the outcome of the renewal of the Andean Trade Preferences and Drug Eradication Act (ATPDEA), many U.S. buyers "Think that we should not buy the same volumes from Ecuador that we are purchasing painfully from Thailand," said a businessman from the local tuna industry.
By paying a fee, the price of Ecuadorian tuna went up and lost its competitiveness relative to other products sold in grocery stores and supermarkets.
According to the newspaper El Universo, while tuna from Thailand also has tariffs, it is a strong competitor because it has large government support and is produced with a lower cost of labour.
Executives from Empesec S.A., a tuna pouch processing firm for the American brand StarKist, indicated that since the tariff preferences expired, deliveries fell by 18 per cent.
To cope with this reduction, the company agreed with its U.S. customers to take part of the fee, in some cases up to 50 per cent and in others the total.
Sources from Empesec speculate that when the renewal of the ATPDEA occurs, these taxes will be returned.
The company produces around 55,000 tonnes of tuna exports to the U.S.
At present, exports of tuna from Ecuador range from USD 100 million to USD 120 million per year.
According to Rafael Trujillo, director of the National Chamber of Fisheries, it is difficult to sell tuna that is not sent to the U.S. market to other countries in Latin America. "There are many companies trying to place the product in South America and other markets," he said.
For her part, the Coordinating Minister of Production, Nathalie Cely, told Radio City that the tuna industry is facing a difficult situation after the ATPDEA was not renewed, since it is "difficult to compete in other markets due to logistical issues."
Meanwhile, the president of Fedexport, Felipe Rivadeneira, warned that Ecuadorian exporters are concerned about the reduction in shipments of tuna, reports the newspaper El Comercio.
According to Lucia Fernandez, head of the Chamber of Commerce and director of the Business Committee of Ecuador, they are "even worried about there not being a renewed interest in tariff agreements with the U.S. government."
"And if you do not expedite the negotiations successfully, I wonder, what will happen to the fishing industry, which hundreds of jobs rely on," she added.
Furthermore, the Ecuadorian Foreign Minister, Ricardo Patino, admitted that the demand for the U.S. Ambassador in Ecuador, Heather Hodges, to leave the country will politically and commercially affect the country.
The Government demanded the departure of Hodges in the shortest time possible after a filtration from Wikileaks showed that the ambassador signed a cable in July 2009, according to which President Rafael Correa had appointed Jaime Hurtado Vaca as commander of the police in 2008 whilst knowing that he was easy to corrupt and manipulate.
"There is no doubt that [the decision] had an impact. I know of no haughty conduct of a government that has no consequences," he said.
He continued: "We have not said anything against the U.S. Government but have said that this decision has to do with the conduct of the ambassador. We hope that there are no other damages, and if there are, we must confront them."
By Analia Murias