HomeOpinionA Levelling of Our Competitive Advantage?

A Levelling of Our Competitive Advantage?

September 21, 2017 was an important date for the fishing industry in this region.

Three years ago, the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) came into effect. This meant that after years of negotiations, trade barriers were reduced for virtually every seafood sector and Canadian companies would have access to the EU’s $22-trillion market of 500 million potential new customers, access to government contracts and more.

On that date, nearly 96 per cent of EU fish and seafood tariff lines were immediately eliminated on certain Canadian seafood products, including live lobster and fresh and frozen scallops from Southwest Nova Scotia.

Canadian harvesters and processors immediately had a leg up on its competitors, notably from south of the border. While local exporters now had tariff-free access to the seafood-loving EU, U.S. lobster dealers were still faced with tariffs of eight to 20 per cent when selling to the buyers across The Pond.

But that competitive advantage appears to have recently been levelled.

According to an August 21 joint statement from United States Trade Representative Robert Lighthizer and European Union Trade Commissioner Phil Hogan, the United States and European Union have agreed to eliminate tariffs on both live and frozen American lobster.

The statement said the agreement should help boost lobster exports and the overall industry, which has been one of many hit hard by the coronavirus. Lobster exports have also been impacted during the course of the U.S.-China trade war, with a key lobster market in China taken off the board.

“As part of improving EU-U.S. relations, this mutually beneficial agreement will bring positive results to the economies of both the United States and the European Union. We intend for this package of tariff reductions to mark just the beginning of a process that will lead to additional agreements that create more free, fair and reciprocal transatlantic trade,” said Lighthizer and Hogan.

The new deal will now eliminate all tariffs on live and frozen U.S.-caught lobster, retroactive August 1, and will last for the next five years, with the EU looking to make it a permanent deal.

In the past, the EU was a key market for American lobster, accounting for roughly 20 per cent of lobster exports each year. That all changed in 2017, after CETA made the U.S. product uncompetitive.

“This is welcome news for the hardworking men and women in Maine’s lobster industry who are facing severe financial difficulties due to the COVID-19 pandemic and the ongoing trade war that has reduced exports. Placing U.S. lobster on a level playing field with Canadian lobster is a significant victory that will reopen this lucrative market to Maine lobstermen and women,” said Senator Susan Collins of Maine. 

“I will continue to fight on behalf of our state’s lobstermen and women as well as the small businesses that rely on this industry by addressing the numerous challenges the industry faces,” she told Seafoodnews.com.

Back in November, the U.S. tried to get a mini-tariff relief deal for lobster, but it failed.

According to a report that first appeared in Politico Europe, the U.S. proposed a mini-trade agreement covering lobsters and some chemicals, in which the EU would drop tariffs on these items as a goodwill gesture prior to a U.S. announcement on not imposing tariffs on European cars.

The EU is currently the world’s largest importer of fish and seafood products, purchasing $36.2-billion worth in 2016. This accounts for 27 per cent of the world’s total fish and seafood imports.