SERIOUS THREATS FROM CHINA'S SEAFOOD INDUSTRY - PART 2

Massive imports of Chinese seafood products are not only hurting our home-grown fishing industry but pose potential health hazards to Americans, especially those who eat imported shrimp and farmed produced fish. The warning comes from the U.S. - China Economic and Security Review Commission in its annual report to Congress.
China now exports one billion pounds of fish to the U.S. each year, thereby accounting for one in every five pounds of seafood eaten by Americans. The problem is that much of the imported farmed fish and shellfish come from nearly 5 million small producers in China who, more often than not harvest their seafood crops in water contaminated by bacteria, viruses and parasites. The farmers also feed the fish antibiotics considered dangerous to health in the United States. Unfortunately, the USDA - U.S. Food and Drug Administration - is inept at dealing with the problem and does not have the authority to inspect Chinese fish farms. It also lacks the resources to check much of the fish cargo shipped into docks in this country.
In its report, the Commission points out that the FDA even lacks the authority to seize and destroy Chinese seafood shipments it has rejected for import.
“In some cases, the FDA must relinquish the fish to the shipper, which has led to the practice known as port hopping,” says the report.
“Port hopping” means a Chinese shipper can move the rejected cargo to another U.S. port and re-import it. The Commission claims the FDA’s inability to prevent the practice is further exacerbated by the fact it takes the Agency on average one year to warn ports about banned shipments, by which time it is likely the fish and shrimp in the shipments have found their way to dinner tables in the U.S.
“The FDA also lacks the authority to order a mandatory recall of seafood or even to block imports of Chinese seafood at the request of Chinese officials,” the report adds.
The problems with Chinese seafood imports can be traced back to 2001 when China joined the World Trade Organization. That opened up global markets and almost immediately the Chinese government began using massive subsidies to expand its industrial fish farming. By 2006, the U.S. was importing 23% of its fresh and prepared fish from the Chinese in a trade worth almost $2 billion. By then, China had the world’s largest fishing fleet and was the biggest global exporter of wild-caught and farmed fish. Contrast that with 1995 when our home market was evenly divided between imports and locally caught and farmed fish. However, within a decade imports had increased by 74%. In 2006 alone, of the 5 billion pounds of seafood eaten by Americans, 83% of it had come from Asia.
The Chinese seafood industry thrives on subsidies and loans disguised as “new technology” grants and, as a consequence, it has been able to overwhelm other markets with cheaper products. The Chinese government has deliberately neglected to impose stringent health controls on its millions of fish farmers for fear that would limit their output. Meanwhile, the $7 billion seafood industry linked to the Gulf of Mexico is suffering. Latest figures show an almost 30% decline in the numbers of workers employed on Gulf Coast fishing trawlers between 2005 and the present.
In the opinion of the Commission, China has kept it currency low and, in tandem with its financial support for its farming industry, has given its fish farmers and exporters an unfair advantage over competitors, especially those in the U.S.
“All the subsidies, direct and indirect, have had a considerable effect on the U.S. market. For example, catfish from Chinese fish farms began arriving in the U.S. in 2004, often selling for $1 per pound less than U.S. farmed fish. As a consequence, the production of U.S. growers quickly declined and hit the lowest level in ten years with the 2007 harvest,” the report concluded.
One of the issues highlighted by the Commission concerns “trans-shipping,” a practice that worries the Florida-based Southern Shrimp Alliance. It believes that Chinese exporters keep shrimp prices in this country low by avoiding tariffs designed to prevent the dumping of large quantities at very low rates. To do that, the Chinese move some of their produce through third party exporters, who are not limited by quotas. The Alliance told the Commission that it suddenly discovered shrimp arriving in the U.S. market from countries like Papua New Guinea that had never been in the shrimp business. It also detected large increases in imports from countries like Indonesia and Malaysia. Cambodia even imported 2 million pounds of shrimp from China and then exported 3 million pounds of shrimp to the U.S. The Alliance saw that activity as part of a growing trend of bait and switch tactics. Most troubling for the Alliance was evidence that the Chinese government gave its fish farmers $625 million in subsidies from 2000 to 2005 and is now subsidizing fish processing.
In respect of the health hazards posed by Chinese imports, the U.S.-China Commission points out that the antibiotics and other chemicals used in fish farming in China are provided free by government and, in many cases, pharmaceutical plants are positioned near large fish farms. In terms of the sheer scale of the dangers, one only had to consider some facts presented by Food & Health Watch, an environmental organization:
“In China, 3.7 billion tons of sewage is discharged daily. The untreated sewage runs into rivers, lakes and costal water, some of which are used for aquaculture production. Furthermore, producers cram thousands of finfish and shellfish into their facilities to maximize production. This generates large amounts of waste, contaminates the water and spreads, which can kill off entire crops of fish if left untreated……….Heavy metals persist in all meat in China but particularly in fish. Mercury from China’s coal-fired power plants is a high-profile example of how water pollution links to food safety. Consuming fish is the most common way to ingest mercury since it accumulates in the flesh of the animal.”
To deal with pollution risks, Chinese fish farmers feed finfish and shellfish antibiotics like difloxacin and ciprofloxican, which are only approved for human use. According to scientists, the more these medications are used in fish the more likely their effectiveness will be reduced in humans. Some chemicals used in Chinese fish ponds are even banned in China. The Commission was presented with evidence that Chinese pharmaceutical companies provided farms with antibiotics not approved for use in the U.S.
Finally, when you buy fin fish or shellfish you might like to consider what the Commission says about the labeling of seafood. It discovered that loop holes exist in our laws, allowing Chinese imports to be labeled as American in origin. For example, if Chinese fish are smoked here or “substantially transformed,” they can be sold over the counters in grocery stores as American products. In the case of shrimp, if it is cleaned and breaded in the U.S. it does not have to be labeled “foreign.” Shrimp that is cooked in the United States “magically becomes” not imported, so health conscious consumers cannot rely on labeling.
American catfish farmers complained to the Commission that Chinese exporters sometimes sell their product as “Mississippi channel catfish” because some fish farms in China rear their catfish from Mississippi fingerlings.
Those who believe tariffs leading to heavy financial penalties can help solve some of the import issues, especially the dumping of cheap fish by its routing through third countries, might need to think again. During its investigations, the Commission learned that many of the financial penalties on Chinese shrimp exporters have had little impact because the penalties were never collected. Senator David Vitter of Louisiana told the Commission that $80 million in duties on imported crawfish from 2002 to 2004 remains uncollected and only $25.5 million was collected from $195.5 million levied against Chinese exporters for dumping crawfish on the U.S. market
The Commission warns that the future for Gulf Coast shrimpers “look grim” and it is time for Congress to act. Given the present economic climate there may be a greater incentive for Congress to confront China about the financial damage it is doing to the American seafood-fishing industry. Congress may also have to address the health risks involved with Chinese imports because those represent a national security issue.