Shrimp farms in Manabí, Ecuador.
Photo: Adobe Stock.
The Southern Shrimp Alliance (SSA) requested the U.S. Department of Commerce (U.S. Commerce) to investigate what they consider to be government benefits granted to Ecuador's shrimp industry that were not evaluated in the original investigation conducted in March of this year on six Ecuadorian shrimp exporters that requested 'expedited reviews' of the U.S. countervailing duty order (CVD) on frozen warm water shrimp from the South American country.
The order had been recently issued after the U.S. Department of Commerce determined that the Ecuadorian government was granting countervailable subsidies to its shrimp producers, and the U.S. International Trade Commission (ITC) found that imports from such subsidized production were harming the U.S. shrimp industry.
The organization representing the U.S. shrimp industry considers these 'expedited reviews' a loophole in U.S. law that allows foreign exporters to obtain company-specific permanent exemptions from a countervailing duty order if the exporter is not individually examined, as appears to have occurred in previous investigations.
Therefore, after consulting different studies and reports, and considering that there are indications of bad practices by the Ecuadorian shrimp industry that would imply non-compliance with the necessary requirements to export to the United States, the Southern Shrimp Alliance has formally requested U.S. Commerce to investigate these suspected state benefits.
The more than 1,600-page filling submitted by the SSA alleges that these malpractices include the illegal destruction of protected mangroves, the use of forced and child labor in the supply chain, and the receipt by the sector of funds administered by the Ecuadorian government that were initially provided by the World Bank, the Inter-American Development Bank, and the Development Bank of Latin America.
The U.S. shrimpers noted that Ecuador has several laws to protect and preserve mangroves. The 2008 Constitution, for example, recognizes them as "fragile and threatened eco-systems" that deserve special status in the country's legal system.
However, according to the Southern Shrimp Alliance, Ecuador's mangroves have suffered considerable deforestation in the last three decades, with an estimated 16.4% loss in coastal mangroves between 1985 and 2022, while aquaculture grew in those same areas by almost 90% during the same period.
In its allegations, the SSA mentions different academic studies that have linked deforestation to illegal shrimp industry activities and considers that "the failure of the Ecuadorian government to enforce laws prohibiting the destruction of mangroves" appears to constitute a significant countervailable subsidy to the country's shrimp industry, warranting further investigation by U.S. Commerce.
The U.S. Southern Shrimp Alliance's view on the role that Ecuadorian shrimp farming plays in the survival of mangroves contrasts with that put forth by Aquaculture Stewardship Council CEO Chris Ninnes last week when presenting ASC's partnership with Labeyrie Fine Foods, and Ecuadorian shrimp producer Omarsa, committing to collaborate in the restoration of 10 hectares of mangroves in Ecuador.
"This partnership represents a positive step in demonstrating how seafood farming can support efforts to address climate change and habitat loss. It's a reminder that meaningful impact starts when we choose change," Nimes then said.
The suspicions of the organization representing the shrimp industry in the eight warm water shrimp producing states of Alabama, Florida, Georgia, Louisiana, Mississippi, North Carolina, South Carolina, and Texas about malpractices in the Ecuadorian shrimp industry also extend to the possible use of forced labor practices.
In the release announcing its request for further investigation by U.S. Commerce, the SSA explained: "Ecuador's laws prohibit both forced labor and child labor in shrimp supply chains. However, the U.S. State Department's Trafficking in Persons Report notes that: 'Traffickers exploit Ecuadorian adults and children in... forced labor within the country, including in... shrimp farming'."
"The State Department has further noted that the Government of Ecuador has undertaken 'insufficient efforts to prosecute or convict labor traffickers'," the Southern Shrimp Alliance continued.
As with illegal mangrove deforestation, the U.S. shrimpers consider that the utilization of forced and child labor in the Ecuadorian shrimp supply chain exists due to the Ecuadorian government's failure to meaningfully enforce the law, and appears to constitute a countervailable subsidy. "This practice, too, merits further investigation by Commerce," they added.
This is not the first time the organization has asked authorities to investigate a possible case of forced labor practices in shrimp-producing countries exporting to the United States. In March 2024, SSA urged members of the U.S. Congress to investigate and take appropriate action against the Indian shrimp exporting industry for this very reason.
The third area in which the SSA suspects unfair competition is related to the receipt of World Bank funds by the Ecuadorian shrimp industry. The organization noted that Ecuador's government sought and received USD 700 million in funding from the World Bank under the 'Green and Resilient Recovery Development Policy Loan Program'.
It also remarked that, in program documents, the Ecuadorian government identified the shrimp industry as a sector that would benefit, and that, although funds came from the World Bank, the government is responsible for administering the program.
However, recent changes in U.S. Commerce practice that prevented the agency from countervailing transnational subsidies have been eliminated, so the Southern Shrimp Alliance believes that this program also warrants further investigation by the federal agency.
Similarly, SSA recalled that, during the initial investigation, the American Shrimp Processors Association (ASPA) requested that U.S. Commerce investigate a program funded by the Inter-American Development Bank and the Development Bank of Latin America that provided for the electrification of the shrimp sector in Ecuador.
U.S. Commerce then denied ASPA's request based on a regulation that prohibits the agency from finding a countervailable subsidy if "the funding for the alleged subsidy is provided by an international lending or development institution."
However, the regulation wielded by the U.S. Department of Commerce to deny ASPA's application has now been repealed, so the Southern Shrimp Alliance believes that the 'expedited reviews' offer U.S. Commerce the opportunity to now investigate this subsidy scheme.
"For too long, our trade laws have treated companies engaged in unfair trade with kid gloves," said John Williams, the executive director of the Southern Shrimp Alliance. "An America First Trade Policy requires that our unfair trade laws create a level playing field. Although it is not what the Ecuadorian shrimp exporters intended, the U.S. shrimp industry hopes that Commerce will accept their invitation to conduct an even more in-depth investigation of their unfair trade."
Presumably, the SSA executive director was referring to 'Restoring American Seafood Competitiveness,' Trump's recent executive order that supports eliminating over-regulation and what he considers unfair trade practices by foreign nations, to put U.S. seafood first.
The order, which pointed out the guidelines that the U.S. Secretary of Commerce will have to develop in the coming months to put the North American country back in first place in seafood products, gained immediate support from the U.S. fishing industry, including the Southern Shrimp Alliance.
"The Southern Shrimp Alliance, representing the U.S. shrimp industry, strongly commends President Trump's decisive Restoring American Seafood Competitiveness Executive Order signed on April 17," the organization's statement then read.
"This critical action directly confronts the existential threats facing our domestic shrimp industry: unfair trade practices, use of forced labor, unsafe imports, and regulatory imbalances that have decimated America's fisheries and coastal communities," it continued.
It is worth noting that, after the entry into force of the U.S. tariffs a month earlier, Ecuador was one of the best off among the shrimp producing countries since only the universal 10% tariff was applied, while other competitors for the U.S. market saw that figure increased, as was the case of India, with 26%, Indonesia with 32%, Thailand with 36%, or Vietnam which was applied a tariff of 46%.
Even so, as reported by WeAreAquaculture, the Ecuadorian shrimp industry urged the reestablishment of pre-tariff conditions, and the National Chamber of Aquaculture offered its support to the Ecuadorian government to maintain dialogue with U.S. authorities and continue working in coordination with the private sector to reestablish them. Not surprisingly, the United States is the second most important market for Ecuadorian shrimp, representing between 18% and 20% of total exports.
