SSA Executive Director Geoff Irvine has extensive experience with live, raw, salted and frozen seafood products. (Photo: Stockfile/FIS)

Trade war with China could force Maine lobster industry to change its strategy

UNITED STATES
Friday, September 21, 2018, 23:50 (GMT + 9)

Maine lobster may use Canada as a “grey-market” conduit to China after President Donald Trump’s trade war with the Asian country, as some experts believe.

Geoff Irvine of the Lobster Council of Canada says there have been indications since then that Maine lobster is coming into Canada and then being sent onwards to China.

"We are digging into the country-of-origin rules. But we believe if it comes in as US it has to be sold as US," Irvine says.

"Some of our live shippers are worried it could erode the Canadian market. It would undercut our market advantage [in China] and the prices we have, and we don't want that," Irvine tells CBC News.

Meanwhile, veteran seafood industry analyst John Sackton blamed the Trump administration for initiating a "crazy" trade war which clearly hurts the Maine lobster industry.

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 John Sackton. Photo: Stockfile/YouTube

"This has essentially frozen or stopped in its tracks a lot of US shipment of lobster to China, which had been growing year-over-year," points out Sackton, editor of Massachusetts-based Seafood News.

Sackton says he is still waiting to see how Chinese border and customs agencies would handle Maine lobster shipped as Canadian.

Companies from Canada and Maine have traded lobster across the border for many years. That trade has been integrated into business supply chains. Maine lobster is typically used in Canadian lobster meat processing operations.

In this regard, Sackton sees a scenario where live lobster from Maine would be used to supply markets in Montreal or Toronto, while Nova Scotia lobster is shipped to China.

What is clear, he says, is that Canada is now far better positioned because of the Chinese tariff and the Canada-Europe free trade deal.

The United States is still the largest market for Canadian lobster exporters.

In Sackton’s view, a favourable exchange rate and a strong US economy should help Canadian lobster exports south of the border, even if Maine companies sell at a discount domestically to make up for lost business in China.

Maine Lobster Dealers Association director Annie Tselikis says there is “tons of opportunity” to grow domestic markets.

With overseas markets shaky at best, the leaders of Maine’s USD 1.4 billion lobster industry came together this week to talk about how to drive up demand and get top dollar in the one market they can count on – the United States, The Press Herald informed.

China slapped a 25 per cent tariff on US lobsters, closing the door on a USD 128.5 million-a-year market, or the European Union inked its trade deal with Canada, driving down European exports by 27 per cent.

At the meeting, industry leaders highlighted that these international trade challenges make it more important than ever to agree on a strategy of how to use the industry’s limited marketing dollars to sell more Maine lobster to US consumers.

 
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