Irish lobstermen upset about EU-US tariff deal

Published on
September 21, 2020

Irish lobster catchers deserve a support package to shield them from any new surge of U.S. imports, according to Chris MacManus, an Irish member of the European Parliament.

McManus blames former European Union Trade Commissioner (and fellow Irishman) Phil Hogan for not consulting Irish fishermen before doing a trade deal in August to cut tariffs on American lobster imports from eight percent to zero. That deal, said MacManus, was a “kick in the teeth” for Irish lobster fishermen.

The trade deal, signed in August, brings U.S. lobster on par with Canadian lobster in tariff levels.

“However, I would say that the real problem at present is general demand for upmarket seafood, which is very low due to the COVID crisis,” Finnian O’Luasa, head of seafood for Europe at Bord Bia, told SeafoodSource.

O’Luasa said data from France-based Geco Food Service shows that while French consumers have gradually returned to restaurants since “deconfinement,” the economic situation remains difficult, with a loss of 52.3 percent in turnover value for table-service restaurants in the first half of the year compared to 2019.

“As price is a balance of offer meeting demand, then any increase in the former will obviously have an adverse effect on price,” O’Luasa said. “Until tourists travel again in Europe and consumers feel comfortable dining out then, very unfortunately, our hard-working fishermen will continue to go through tough times.”

The signing of the deal to let U.S. lobster into the E.U. tariff-free comes at a time when Irish lobster prices are down by 25 to 30 percent on the same period last year, according to Alex Crowley, the head of the country’s National Inshore Fisherman’s Association.

U.S. lobster has not yet appeared in the E.U. in any significant volume due to weak demand in key markets like France and Spain, Crowley told SeafoodSource. The COVID-19 pandemic and subsequent lockdowns in France wreaked havoc on the NIFA members’ traditional peak Easter market and looks set to ruin the other premium market, Christmas, Crowley said. Ireland exports 90 percent of its lobsters to other E.U. states, principally France and Spain.

It’s not clear when E.U. demand may recover to absorb significant quantities of lobster, Crowley said. He worries the added pressure of a COVID-prompted economic recession could keep prices depressed for a long time, pointing to the last recession triggered by the 2008-2009 financial crisis.

“It took till 2016 for lobster prices to come up out of that hole [to where they were pre-recession],” Crowley said.

Alongside the threat posed by the U.S. lobster, Crowley also fears a COVID-prompted recession may spur displacement of other Irish products in key E.U. markets by cheaper crustaceans (like Moroccan crayfish and Thai shrimp). He’s also worried about the ongoing impact of the ongoing ban from the Chinese market of Irish brown crab, long a staple catch for NIFA members. That ban relates to cadmium levels in Irish crabs not meeting Chinese standards, though they do meet the E.U. criterium, according to Crowley.

Crowley said NIFA members want special recognition for European lobsters in any broader trade pact between the E.U. and the United States. Similar recognition and related relief have been given to beef producers, a major political force in Ireland, in other E.U. trade talks.

Besides special trading status, there’s another hope for Irish lobster dealers: China. Exploding demand from buyers in China for Canadian lobsters, accelerated by the U.S.-China trade war, cushioned Irish lobster fishermen from new competition when the E.U. signed the Comprehensive Trade and Economic Agreement (CETA) free trade deal with Canada in 2017. And a rebound in Chinese demand for American lobster could limit any flood of product into the E.U. when European demand recovers.

But right now, China is not on competitive ground with Canadian lobster in China, though it still bought 30 percent of U.S. lobster shipments in the first half of 2020.  Maine lobster producers hit hard by the Sino-U.S. trade war are eagerly looking at the E.U. market as taking up some of that slack, though Europe has mostly become the domain of their Canadian peers since CETA was signed. The E.U. spent an average annual USD 410 million (EUR 345.7 million) on lobster imports in the 2017-2019 period, and purchased a similar share in lobster volume to China. Of that total, two-thirds was supplied by the U.S. and Canada.

While the lobster season in the Northeast U.S. is nearly over, that isn’t the only lobstering region suffering as a result of the dual impact of the coronavirus and the trade wars. Spiny lobster sales from the U.S. state of Florida to the Chinese market have dropped 20 to 30 percent this year, according to Robert Hidalgo, general manager at Oldsmar, Florida-based Captain’s Choice Seafood Company.

“Prices are down by about USD 2.00 [EUR 1.69] per pound,” Hidalgo told SeafoodSource. “We are aware that China is now buying from other places, such as Central America. The end result for us is that, since prices have dropped, U.S. demand has picked up for us, but demand is low. The first impact was from the tariffs, then this year obviously was the COVID [situation].”

The biggest problem Captain’s Choice faced through the past six months wasn’t with sales, but rather with logistics, as lockdowns caused a shortage of supply and shipping live seafood became a difficult proposition, Hidalgo said.

“But things are starting to move in that regard and should be picking up in  as soon as two to three weeks from now,” he said.

Photo courtesy of ronniejcmc/Shutterstock

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