Deal eliminates 11% tariff, a provides a huge export advantage over Americans.
PORTLAND, Me. — Members of the US seafood industry are fearful that Canada’s approval of a new trade deal with the European Union will cause big problems for the American lobster business, just as the catch is hitting historic highs.
The Canada-European Union Comprehensive Economic and Trade Agreement Implementation Act, or CETA, cleared its final hurdle in the Parliament of Canada on May 16. The deal gets rid of tariffs on Canadian lobster exports to the 28-nation bloc, putting Canada at a huge advantage over the US.
The tariffs for fish and seafood average 11%, and the EU is the biggest importer of seafood in the world. EU countries imported more than $150 million in lobster from the US last year, along with more than $190 million Canadian (US$140 million) from Canada.
Seafood exporters and lobster industry members like Dave Madden, owner of exporter Lobster Trap in Bourne, Mass., said they fear loss of money and jobs in the US under the new rules. He ships about 4.5 million pounds of lobsters to countries such as Italy, France and Spain per year.
“Not only does it hurt not to be able to ship that poundage, I don’t need as many people to pack,” he said. “So people are going to lose jobs over this.”
Tariffs will fall in the coming weeks, said Chantal Gagnon, spokeswoman for Canada’s Office of the Minister of International Trade. The European Union already approved the agreement, and an EU spokesman declined to comment on Canada’s approval.
The rule change is coming during a boom time for the US lobster catch. The American lobster industry is based largely in Maine, which set a record for total catch in 2016 with more than 130 million pounds.
Price to consumers has also been high, in part because of growing demand from Asian countries. But a loss of European business could shake up prices and availability throughout the supply chain.
Maine Gov. Paul LePage, a Republican, and members of the Maine delegation have been warning about the danger of the tariff change for months, but the US and EU are not close to a similar deal at the moment. Rep. Chellie Pingree, a Democrat, has said the Cultivating Revitalization by Expanding American Agricultural Trade and Exports bill she submitted this month could reduce some of the sting.
She said the bill would double funding for two federal programs that help get more Maine food to foreign markets.
“These programs are vital to helping iconic Maine foods – like lobster, potatoes and wild blueberries – and many other value-added food products reach the world market,” Pingree said.
But even for lobster exporters who send to Asia, the possibility of disruption in the industry is significant, said Stephanie Nadeau, owner of the Lobster Company, of Arundel, Maine.
“It’s going to affect me, because people who do ship to Europe and can’t compete with the Canadians will try to slide into my market,” she said. “It’ll be like dominos.”