reLAKSation 232. Callander McDowell
Surprise, Surprise: Seafoodintelligence.com published a press statement from Peter Power, Peter Mandelson’s spokesman for trade following Norway’s decision to take the EU to the World Trade Organisation over the EU’s anti-dumping measures on Norwegian salmon. He said that ‘the decision to go to the WTO comes as surprise’ however the real surprise is that Norway had not taken such decisive action any earlier.
The EU has always maintained that it has followed the trade legislation exactly and that it’s findings clearly show that Norway is guilty of dumping. What the EU has consistently failed to appreciate is whilst the procedure may be in accordance the law, the data collected and the way it has been evaluated is seriously flawed. Rather than consider this possibility, the EU have maintained, as Peter Power states in his press statement, that they are confident of their findings.
We, at Callander McDowell, certainly believe that this confidence is misplaced. We know this is because through reLAKSation, we have become embroiled in the case. Fritz-Harald Wenig, head of section, has responded to our comments on several occasions, however whilst he has been happy trying to ‘educate’ us on the matters of trade, he has consistently refused to answer a single question relating to actual facts. Having drawn Callander McDowell into the case, Mr Wenig now refuses to even acknowledge our correspondence. We even wonder that following this whole debacle, he might have been moved since he appears to be no longer referred to in any press articles about the case.
Could it be that Mr Wenig’s silence is an indication that there is concern behind the confidence that the case cannot be defended at the WTO? Certainly, the EU has a ‘get out’ in the knowledge that any WTO action will take up to 18 months to progress. In the meantime, they have already indicated that a review could be instigated after 12 months if there was a complete and long lasting change of circumstances. For example, if prices remained at current levels and if a significant percentage of the complainant farmers were no longer producing conventional salmon, then the legislation could be shown to have little relevance. If such a review showed that the regulation was no longer necessary, its withdrawal then would pull the rug out from the WTO action.
Finally, Peter Mandeslon is quoted as saying that ‘he is at loss to understand why Norway has chosen to go down this particular route.’ Perhaps, the simple answer is that Norway believes that it is not guilty of dumping and would like the opportunity to prove it. We appreciate that the findings of the trade investigation shows otherwise, but the EU refuse to consider that the investigation is not appropriate to salmon farming. Certainly, all the cases undertaken by DG Trade appear to relate to metal, chemicals and pharmaceuticals; products whose manufacturing processes bear no relation to farmed salmon. We have always argued that the type of investigation conduced by DG Trade is simply not suited to investigating a live animal and certainly not one whose growth is temperature dependent. We believe that dumping margins are an inevitable artifact of a complex growing cycle, which is why every single dumping investigation relating to farmed salmon, irrespective of whether it has been conducted by the EU or the US has uncovered dumping margins.
We, at Callander McDowell, believe that the time has come to put an end to this trade dispute. The EU should find a way to stop the matter escalating to the WTO and instead address trade issues that really matter, not those pursued by a tiny number of complaining farmers who would be better served by addressing the needs of the market place rather than worry that consumers are able to obtain value for money salmon which they can eat at any meal occasion.
A solution: Normally, we, at Callander McDowell use reLAKSation to comment on what is happening in the news in the aquaculture industry and more specifically with regard to salmon farming. This time, we are part of this news.
Following the imposition of permanent trade measures against their salmon, Norway indicated that it was prepared to take the matter to the WTO. In response, Peter Mandelson indicated that he would like to avoid such escalation of this salmon dispute and said that it would take an imaginative proposal to do so. We at Callander McDowell, have now proposed just such a solution.
Norway clearly would like to see the withdrawal of these permanent measures but whilst we believe that Norway is innocent of the charges, we think that in order to avoid a costly escalation of the dispute, Norway should be willing to give something in return for free market access.
At the same time, and totally unconnected, the Scottish white fishing industry has been subjected to swingeing cuts in the last round of the fisheries talks. Haddock quotas have been cut by 13% but when other agreements run out soon, the cutback in catch is more like 40%. In real terms, this means that unless action is not taken, the Scottish haddock industry will completely run out of fish by September and will have to shut down until new quota talks, which are unlikely to result in an increase in the catch. According to Fishupdate.com, Norway has about 6000 tonnes of haddock quota in its waters that it is not interested in catching. These are fish that could be made available to EU fishermen. There is already a fisheries agreement between Norway and the EU and as salmon are fish, there is absolutely no reason why this cannot be extended to grant free market access to Norwegian salmon farmers whilst allowing EU fishermen the opportunity to catch unwanted haddock.
Whilst Mr Mandeslon said it would take an imaginative solution to solve the current dispute, it seems that our proposal is just too imaginative. Per Haugaard of Mr Mandeslons’s cabinet responded by saying that such a proposal was not in DG Trade’s remit. Well of course it isn’t but it is within the EU’s and it would only take a conversation between DG Trade, DG Fish and the EU Secretariat to pursue the discussion. The problem for DG Trade is that whilst Mr Mandelson might be willing to consider a compromise solution, there are sections of the directorate that do not support any deal. They argue that their investigation has shown Norway to be guilty of dumping and that DG Trade should stand by these findings.
Callander McDowell presented this proposal to representatives of DG Trade in Brussels who made their feelings absolutely clear. They said that if Norway wants to go to the WTO then they are free to do so but DG Trade has clear proof that Norway cannot win the case. As to our specific proposal they said that this was like not only forgiving a murderer but also giving him a reward as well.
Meanwhile, we have not forgotten the ‘victims’ of this ‘heinous crime’, the independent European salmon farmers. They have repeatedly warned that their industry is imminently on the point of collapse but they have cried wolf once too often. Far from collapse, some of the complainants are reaping in the profits. An article in the January issue of the food magazine Delicious about Loch Duart Salmon quotes them as saying ‘The business is profitable’. In addition several complainants now produce organic salmon or are in the process of converting to organic production. Even DG Trade now admit that these farms have no reason to complain as they are operating in a different market sector.
DG Trade seem entrenched in their position but perhaps they should consider a quote from the ‘Delicious’ magazine. One Loch Duart’s director’s states ‘We’re an awkward bunch of Scots who get in the way of Norway’s grand plans’. Maybe Mr Mandeslon would realise that DG Trade is being used in some form of vendetta not a legitimate trade dispute and this is what he is willing to go to the WTO to defend! Instead, he may wish to consider the livelihoods of the Scottish fishing industry that face a real crisis not one without any real substance.