Minister Hector Dada, the head of the Ministry of Economy of El Salvador along with Calvo Representatives. (Photo: MINEC, minec.gob.sv)

Costa Rica ends lawsuit against Calvo subsidiary

After more than a year of conflict, the Ministry of Foreign Trade of Costa Rica has dismissed and closed a complaint relating to dumping and unfair competition put forward by the Costa Rican company Sardimar SA, against the subsidiary which the Spanish tuna group, Calvo, owns in El Salvador.

"Last week we were notified officially by the Minister of Foreign Trade of Costa Rica [Anabel González] that the lawsuit against the Salvadoran company had been dismissed and ultimately filed," said the head of the Ministry of Economy of El Salvador, Héctor Dada.

The Salvadoran minister said the process was concluded in dismissing the indictment against Calvo "and at heart, against the conduct of the economic practices of the country."

In mid-2009, Sardimar filed a complaint against Calvo, arguing that they sold its products below its cost.

At that time, the Ministry of Economy, Industry and Trade of Costa Rica began an investigation and the Government of El Salvador accompanied Calvo in its defense.

The Salvadoran Vice Minister of Economy, Mario Roger Hernandez, said "there were no technical elements" to prove that Calvo was actually dumping.

According to the Spanish company, the lowest price of canned tuna, compared to its competitors in Costa Rica, is that their fishing boats benefit from economies of scale and are operating without intermediaries, reports the EFE news agency.

Dada said the process was "a first stage consultation, in which El Salvador and Costa Rica tried to resolve the dispute in a friendly manner, but did not reach a mutually satisfactory solution."

El Salvador requested the second phase of the mechanism. At this stage the Council of Ministers spoke of Economic Integration, and the other countries of the region attempted to mediate the dispute by proposing alternative solutions. "But there was no consensus, so this second phase was completely pointless," said Dada.

"Throughout this process, it was asked to the investigating authority of Costa Rica that had not investigated information that is considered essential in any investigation of alleged dumping practices, such as the price of the product in the exporting country, which in this case was El Salvador. Similarly, he said he had not done an analysis in depth about the injury or threat of damage allegedly caused to the tuna industry of Costa Rica," he went on to explain.

He added: "After the second phase of the dispute settlement mechanism, El Salvador was entitled to request the establishment for an arbitration panel, however, it received the notification from the Ministry of Foreign Trade of Costa Rica, which indicated that the lawsuit against the Salvadoran company had been dismissed and ultimately filed," according to Diario La Página.

Upon hearing the decision, the director of operations for Calvo in El Salvador, Miguel Peñalva, was satisfied: "We were convinced that we had not committed any irregularity."

Currently, Calvo sends 1,500 tonnes of tuna to Costa Rica for around USD 7 million, said the Calvo executive.

Meanwhile, official statistics indicate that El Salvador's main export market for tuna is still Europe with the most relevant products being tuna loins.

Last year, the value for the total amount of exports of tuna loins totaled USD 53.8 million, and between January and September 2010 it was USD 32.6 million, reported the newspaper La Nación.

By Analia Murias
[email protected]
www.seafood.media

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