reLAKSation 344. Callander McDowell
The end?: The European Salmon Producers Group are not happy. According to IntraFish, the EUSPG are unhappy that news concerning the impending removal of the Minimum Import Price has reached the press. An unnamed spokesman told IntraFish that it’s a pity that a confidential document that was released to ‘Interested Parties’ has been leaked.
We, at Callander McDowell, are not surprised that the EUSPG are unhappy that the news has been released that the European Commission has recommended that the trade restrictions on imports of farmed salmon should be removed. This is because they would rather that the matter be discussed behind closed doors where they believe that they have a better chance of influencing the final outcome. Once the issue is out in the open for public discussion then their position is immediately weakened because there is an increased likelihood for the other side of the issue to be heard.
The EUSPG have mounted their whole campaign against Norwegian salmon imports with the greatest secrecy. Even the organisation itself is kept under wraps with an absolute minimum of details made available as illustrated by their use of unnamed spokesmen to comment on the news. We have always argued that if the EUSPG are so passionate about their case against Norway then they should be prepared to stand up and fight their corner in the open. Instead, they have hidden away behind unnamed spokesmen and the use of an accommodation address. They don’t even produce a hit on the ‘Google’ internet search engine.
Whilst their most staunch supporters, the Scottish Executive, carry links on their website to the SSPO, Shetland Aquaculture, the British Trout Association and even the Western Isles Aquaculture Association, there is no reference to the EUSPG. For all we know the EUSPG are simply a couple of disgruntled ex-farmers in pursuit of a grudge. Certainly, one thing is very clear, the EUSPG are not representative of the salmon farming industry in Scotland. The media regularly publishes positive stories about various Scottish companies investing and promoting salmon farming in Scotland. This is the true representation of the Scottish salmon farming industry, not some cloak and dagger organisation set on some form of vendetta against who knows what?
The EUSPG spokesman told IntraFish that they are unable to comment until they have scrutinized the documents from the European Commission. Callander McDowell are not considered to be an official ‘Interested Party’ by DG Trade so we have not seen these documents but we know that it makes no difference what they say, the time has come to put an end to not only the MIP, but also nearly twenty years of totally unnecessary trade dispute between Scotland and Norway.
Whilst the EUSPG are not willing to stand up and be heard, we, at Callander McDowell, would argue ad infinitum that the claims of dumping are totally unsubstantiated, a point also made by Ole-Eirik Leroy, Chairman of the Norwegian Seafood Federation. This dispute has never been about dumping but rather the inability of the Scottish industry to maintain a perception of the market image of Scottish salmon (and before anyone writes in, we know that there are some examples where Scottish salmon has retained its premium image but we refer to the overall perception of the Scottish brand).
It is their failure to convince consumers to pay a premium price for Scottish salmon that initially prompted the submission of a dumping complaint against Norway. Unfortunately, the EUSPG have continued to seek protection from the EU rather than spending time persuading consumers why they should be digging deeper into their pockets to buy Scottish salmon. The EUSPG have argued that Norway is overproducing fish and hence devaluing the Scottish product but as we have said many times previously, the problem is not over-production but UNDER-MARKETING, a message that the EUSPG refuses to even listen to, let alone consider.
Ole-Eirik Leroy says that Norway has always denied that it dumped salmon into the EU market. Their problem is that they have never adequately defended themselves against these accusations. This is because they have always concentrated on arguing points of law rather than address the fundamental issues. It is beyond belief that Norway has allowed the issue to fester for the last twenty years but then, as in many disputes, there is only one winner!
Unfortunately for Norway, the EUSPG were given a helping hand in the form of the EU, who acted not only as prosecutor but also as judge and jury. The WTO found that the EU was at fault on several points in its handling of the latest salmon dumping case but there were also other points that were not raised by the WTO which question the fairness and validity of the investigation. We have previously discussed the huge discrepancies in the data supplied with application for safeguards by the Scottish Executive and that with the dumping complaint by the EUSPG. As both of these submissions covered the same producers over the same time period, it would be expected that both sets of data should be identical. They are not. If that supplied by the Scottish Executive is correct and true, then that supplied by the EUSPG is not. Equally, if that supplied by the EUSPG is accurate, then that supplied by the Scottish Executive cannot be. One set of data is clearly wrong.
The European Commission did not have to validate the data attached to the application for safeguards because it was submitted by a Member State. However, they did conduct their subsequent investigation without questioning the data. Under WTO rules, the Commission was obliged to validate the data submitted with the dumping complaint and to assess whether it was accurate and correct. Clearly, they did not do this, otherwise they would have found the data to conflict with that used in the safeguard application. The parallel submissions meant that the Commission had effectively decided that they did not need to validate the submission as they were obliged to do. They did this because they had already concluded Norway was guilty of dumping. Of course, the Commission will not investigate the possibility of such an error because it was they that made the error.
After an hour long explanation of just one of the discrepancies, DG Trade’s lead investigator, Dr Thinam Jakob, did admit that the data did not add up but she dismissed it as being irrelevant because Norway was clearly guilty of dumping!
Unfortunately, Dr Jakob wrongly assumed that the presence of dumping margins is proof of guilt. This is not the case. Every investigation into salmon dumping, whether it took place in Europe or the US, has uncovered the presence of dumping margins. Dumping margins are a natural artefact of the complex life cycle of salmon. They are always present when calculated as part of a trade investigation because they look at only part and not the whole growing cycle. These dumping margins are always relatively small which is why the EU has never been prepared to take really harsh action against Norway. The dumping margins are visible but not real proof of dumping. We have always argued that if the Commission had bothered to conduct a parallel investigation in Scotland they would also find dumping margins present. They are a fact of life not proof of guilt.
We, at Callander McDowell are in no doubt that the European Commission should now revoke the trade measures. The EUSPG do not need time to scrutinize the documentation because their view is now irrelevant. There is simply no case against Norway (either in the EU or the US). The MIP should be now consigned to the waste bin where it belongs.
However, the European Commission has to follow procedure and must first put the proposal to the dumping committee made up from the Member States. The outcome is not a foregone conclusion since any decision seems to depend more on mutual back scratching rather than the validity of the proposal. It is now just a waiting game in the hope that the proposal to remove the MIP will be endorsed.
IntraFish report that July 21st may be the date by which the MIP may be ditched. Of course, the EUSPG will probably choose the 22nd to submit their anti-subsidy case. If the European Commission have any sense they will go through the submission with an extremely fine toothcomb before despatching it out with the trash putting an end to any further involvement in salmon trade issues. The future should be marked with more emphasis on marketing and none on trade protection! Let this now be the end.