reLAKSation 168.
Seeking
solutions: Since the submission of the
British application for safeguards, a variety of different solutions have been
proposed. These include the Minimum Import Price, quotas, import duties and
punitive tariffs. There has been numerous exchanges between the EU and Norway to
seek a satisfactory solution, but as yet one has still to be agreed. The
stumbling block appears to be that Norway does not find the Commission's
proposals acceptable. This unwillingness to accept any of the Commission's
solutions appears somewhat puzzling to Fritz-Harald Wenig of DG Trade, who in an
interview with IntraFish said that Norway is being irrational.
Yet,
we at Callander McDowell, wonder whether it would be more irrational of Norway
to accept the Commission's compromise solution when they obviously believe that
they are innocent of the dumping charges. Why should they accept punishment for
something they believe they have not done?
Clearly,
Mr Wenig believes otherwise. He 'guesses' that his department will find a
dumping margin of between 20-25%.
Although
we, at Callander McDowell, do not believe that Norway is guilty of dumping , we
know that Mr Wenig will probably find
evidence of dumping margins.
We would argue that this is inevitable as the type of spot investigation
which DG Trade conducts will undoubtedly throw up dumping margins.
We believe that these dumping margins are a natural artefact of the
salmon's long complex life cycle. This is why dumping margins have been found in
every previous dumping case, whether it be in Europe or not. We would argue that
if DG Trade would conduct a parallel investigation of Scottish industry, they
would probably find similar dumping margins present too.
Sadly, rather than consider that Norway are innocent of dumping, DG
Trade appear intent on progressing a dumping case against them.
When
we have previously expressed
such sentiments as those above, we, at Callander McDowell have been
accused of being in the pay of the Norwegian industry, but nothing could be
further from the truth. If the Norwegian and Scottish roles were reversed we
would be just as supportive of the
Scottish industry. We believe that nationality is irrelevant and it is
not whether you support Norway or Scotland, but whether you support the concept
of salmon farming (as well as other species of farmed fish) or not. The problem
is that every time a dumping action is pursued, it inherently damages the whole
aquaculture industry. For example, those fledgling cod farmers who wonder why
they struggle to find further investment need only look to the salmon industry
for the answer. The increased
production of any species with a high market value will bring about a
fall in prices. This
is inevitable and will cause those producers whose business plan is based solely
on premium prices to claim excessive over-production and make accusations of
dumping. Why would anyone want to invest in a business which might be subjected
to quotas, punitive tariffs or price constraints? This is a sure way of losing
money.
Every
time another dumping case is instigated, confidence in the fish farming industry
is being undermined.
When fish farming is for the first time being recognised as a viable
alternative to wild caught fisheries, this is crazy.
Fish farming has enough of an image problem fighting the environmental
and sustainability issues to have to fight trade issues amongst itself.
Ever
since prices first collapsed in 1989, the salmon farming industry has been
accused of over-producing and dumping. However, these issues are simply a
smokescreen for the underlying and fundamental question as to how the industry
reconciles fulfilling consumer demand for 'value for money' fish with the
profitable production of species, such as salmon, that have a perceived market
image. Yet despite numerous industry meetings, conferences and seminars, this
subject seems never to have been discussed. Instead, those who want to retain
their perceived market image for the salmon they produce, have pursued their
campaign through the European Commission's trade department. The underlying
issues appear to be not up for discussion. This is most evident from the current
safeguard application and the subsequent dumping action. The European Salmon
Producers Group, who are not even a recognised representative organisation but
consist of a small number of disaffected independent producers' have managed to
gain the ear of the Scottish Executive and have taken their campaign to Europe
irrespective of
whether they represent the majority of the Scottish industry. They say that
their jobs are under threat but they seem to ignore the many more jobs of people
employed by the majority of Scottish farming companies who views they have not
sought.
Whilst
its quite understandable that the EUSPG would not want to engage in discussion
about their strategy because they may be asked questions that they are unable to
answer, it is surprising how little support they have obtained from the wider
community. The various members of both the Scottish, British and European
Parliaments have remained strangely silent on the dumping issue especially those
in Europe. Perhaps, they have recognised that there is more than one side to the
dumping debate. The problem for Europe is that it is just not this small group
of salmon farmers who will be affected by DG Trades decision, but there is a
whole industry of processors who are dependent on salmon imports for jobs and
business, not forgetting the many consumers who have come to rely on salmon as a
value for money and healthy meal choice.
Mr
Wenig hopes that a compromise deal would satisfy all sides, but this is
unlikely. Previous deals such as the EU salmon agreement which included both the
MIP and quotas failed to achieve anything because it simply fudged the issues.
The industry clearly needs a new and different solution. The problem is
that Mr Wenig is not empowered to consider different solutions and because
no-one at the Commission oversees the wider issues, there is no co-operation
between departments to consider alternatives. The EUSPG have made this a trade
issue, but they need to be persuaded for the good of all fish farming companies
that this is not about trade but rather about adopting the right strategy for
farming salmon profitably.
The
question for Mr Wenig is whether the European need for imported salmon is
greater than the demands of a few independent salmon farmers? The problem is
that this is a question he cannot answer himself.
It must be in the European Community's interest to involve the DG
Fisheries in finding the answer.
The priority must be to look at ways to allow the continued import of
salmon, but also to find ways to help the Scots farmers overcome their problems.
About
two years, Allan Wilson, Scottish fisheries minister set up a working party of
eminent industry and non-industry experts to draw up a strategic framework for
Scottish aquaculture. Unfortunately, the working party failed to consider the
question of how the aquaculture industry maintains its profitability. Instead,
it circled round the issue. Perhaps, now is the time to establish another
working party to consider this question. Mr Wilson's finished strategy was
launched at a major industry gathering.
A similar convention of
people from all areas of industry might be able to come up with an
alternative solution to this long and drawn out wrangling over whether future
industry strategy should be dictated by trade policies. If Mr Wilson feels that
it is not the Government's position to intervene in commercial issues then he
should remember that the application for safeguards did exactly that.
Alternatively, the European Parliamentary Fisheries Committee, or alternatively
a group of MSP's or MEP's may like to accept the challenge.
What is important is that this matter should not be left to Mr Wenig to solve. It is in everyone's interests to help the members of the EUSPG see that a trade dispute will not help them secure a profitable future. If this was the way ahead, the surely, these issues would have been resolved during any of the previous disputes. However what is most important is that the salmon farming industry continues to supply consumers with salmon at a price they are willing to pay. This is something that Mr Morgan and his colleagues at the EUSPG should well remember. Perhaps, if they had spent all the time and effort in pursuing the Norwegian industry and invested it in their businesses instead, they may not now find themselves in the situation they claim to find themselves in.