What Will Trump Presidency Mean For Tuna?
News that Republican candidate Donald Trump was elected the US’ new President late last year, drove international press and public to focus on the uncertain future this leaves for America.
It’s still early days, but a number of executive orders already signed give a good indication about the sort of Presidency the US and the rest of the world can expect.
How Will It Impact Our Industry?
Among many questions, is: What will be the impact of his leadership on global tuna trade, the US fishing industry, American ties with important tuna playing nations, and the wider perspective on environmental issues?
The Trump win revealed deep anti-establishment anger among American voters, and an important element of his campaign was to reduce red tape that he believes has been stifling US businesses. He’s already acted on ambitions that weaken the power of government regulators, giving US companies more free rein.
Some of the immediate points that are clear from this leadership is that Trump gives little priority to environmental issues, and in addition to this, he’s already scrapped some free trade deals, getting straight to work on building trade barriers and putting American businesses first.
These points will all likely have broad implications that will impact the US tuna industry, and beyond.
There are still several important decisions that the US government must make in terms of the tuna sector, and many will be left wondering what can be expected under the new Republican lead.
Will US Tuna Production Flourish?
With a strong passion for increasing the domestic US industry in every sector, Trump is likely to see growth of American-based tuna canning as a strong priority. These are operations that are currently dominated in the US territory of American Samoa.
He has a keen interest in derailing free trade agreements, and bringing in foreign trade barriers, and Trump has already given indication that import duties will rise. This has strong potential to increase the competitiveness of tuna canneries on American soil.
His election is likely good news for StarKist owner Dongwon, which operates a tuna cannery in US territory of American Samoa, and has long complained that a lack of government incentives is obstructing an increase in production.
US firm Tri Marine is also still in ownership of its American Samoa-based STP tuna processing facility, which stopped its production operations late last year. It’s yet to be seen if Trump’s mission to see US business thrive can pump a revival back into a Tri Marine-run tuna plant. Failing this, a promise of favorable conditions for US industry could bring some interested buyers forward to snap up the tuna production sight, out of Tri Marine’s hands.
TPP - Dead And Buried
There were already expectations that the Trans-Pacific Partnership (TPP) would be killed off amid Trump’s Presidency, and in the first few days of office this materialized. The new President signed an executive order to scrap the TPP, and without US participation it’s extremely likely it will not go ahead.
The free trade deal, involving 12 different nations, including the US, was set to be the largest multi-party agreement of its kind for a vast range of products including tuna.
In tuna terms it was believed that Mexico and Vietnam would be the biggest winners from the TPP, but a rule of origin added to the agreement would have restricted trade.
As previously reported on Atuna.com, the US also subjected Vietnam to a ten year phase-out period on duty free trade, in case the deal would get the go-ahead. Big US canned tuna brand, Bumble Bee, may have had some influence in the delay, stressing that the TPP would force US-based tuna processors to cease their operations.
With a strong passion for increasing industry within the United States, Trump’s win dissolves the chance of any multilateral agreements. Instead “we will negotiate fair bilateral trade deals that bring jobs and industry back on to American shores,” he said.
TPP backers, which included Republican senators, argued that the arrangement was not only an economic issue, but also a strategic one. They stressed that scrapping the TPP would cause detrimental impact to the US’ leadership status in the Pacific.
Further Friction For US/Pacific Ties?
The US tuna purse seine fleet has seen frayed ties with PNA nations in terms of fishing access and the South Pacific Tuna Treaty, which resulted in long and slow negotiations last year.
After the US defaulted on payments to the Treaty in late 2015, the US seiner fleet was locked out of PNA waters, which account for over 50 percent of the global skipjack tuna catch. The no payment period also saw important revenue loss to Pacific island nations.
The situation put US and Pacific relations under substantial pressure, and there was significant doubt over whether a new arrangement would be reached.
Following seven years of interim deals, lengthy negotiations finally resulted in a newly shaped Treaty, which was said to introduce increased flexibility into the deal. The US tuna fleet’s access package to the PNA is now made up of less fishing days, and subsequently this means less in payments to Pacific countries.
The deal is set for six years, but the amount of days and the price included has only been laid out for the first four. It’s likely that the access package and financial contribution therefore will have to be re-discussed during Trump’s secured four-year term, and it’s not clear yet how he will steer American ties with the Pacific region.
The general expectation is that Trump’s isolationist policy, annulling international treaties and implementing trade barriers, will likely drive Pacific region nations more towards building closer ties with China.
A Stop To Shrinking Fishing Grounds?
The Hawaiian bigeye tuna longline fleet has been pushing against the expansion of US National Marine Monuments that would create extra no-fishing zones for the fleet. Already knowing that environmental issues are not high on Trump’s agenda, there is big potential for its voice to be heard.
During his campaign, the president-elect made several promises to roll back environmental roadblocks to business, and therefore the planned expansion of marine protected areas around US waters, pushed for by Obama, is deemed unlikely under his lead.
More recently Republicans of the US House of Representatives have urged Trump to remove fishing prohibitions in marine monuments, stating that the loss of US fishing grounds has made consumers more reliant of foreign seafood sources.
In the wider environmental realm, Trump has said that he does not believe the planet is warming as result of human activity, and tweeted in 2012 that “the concept of global warming was created by and for the Chinese in order to make US manufacturing non-competitive.”
Trump took the controversial decision to choose Scott Pruitt to lead the US Environmental Protection Agency (EPA), reported to be sceptic of climate change, and to have led lawsuits against the EPA previously. Recently, however, he has made comments suggesting that while he isn’t committed to an aggressive response to it, he recognizes that science indicates the climate is changing and that human activity in some matter impacts that.
Without a strong attitude on the issue of climate change, Trump and his Cabinet picks could fray US ties with the Pacific even further; strong links have been made between the warming of the earth and the sinking of Pacific island nations, which are crucial resource owners in the global tuna industry.
Tougher Rules On Foreign Crewmen?
A loophole in US immigration law is reported to be at the core of the problems related to allegations of slave labor within the Hawaiian longline fleet.
Last year, an Associate Press investigation made allegations of cases of labor abuse involving migrant workers aboard tuna longline vessels operating out of Hawaii. However, sources close to the fleet believe the issue has stemmed from immigration laws that do not allow crewmen to leave boats while in port.
Therefore, pushes have been made for a change in the present immigration rules in the United States, which also currently require captains to obtain workers’ passports.
At the center of Trump’s campaign were his strong views on immigration in the US. This leaves doubt surrounding whether changing the law for foreign crew working on US flagged vessels will be high on his agenda.
Since Trump’s election, a bill that had the aim to bring more oversight to the commercial fishing industry in Hawaii in terms of migrant workers, has been scrapped.
Trump has said he wants to curb immigration, and therefore it is likely that instead of making matters easier for foreign crews, he will make it even more difficult to employ these migrant workers in the first place.
“Fake Tuna” Imports: Any Action?
There have been increasing imports of tuna-like species, such as Euthynnus Affinis and Auxis Thazhard entering the US foodservice market to be sold as Chunk Light Tuna.
These species have been named by some sources as “fake tuna”. Trade of these products has been dominated by small importing firms, and there are concerns from those not involved that it undermines the traditional Chunk Light market.
Not only are these species cheaper to buy, but they can be imported under a lower tariff rate of four percent, instead of 12.5 percent levied on traditional tuna species, like skipjack, yellowfin and tongol.
Most of the product is supplied by canners in China, and the situation has left packers in Thailand, once the major exporters of foodservice canned tuna to the US, complaining of disappearing business.
There is now a push from some US industry players to get the US government department NOAA to address this situation; to either reclassify these species as not being tunas at all, or for them to come under the higher 12.5 percent import tariff code.
With a pro-business attitude and a favor for less regulation, Trump has shown a disinterest in mandatory labeling on pesticides and GMO. It therefore seems doubtful his cabinet will take measures to work for changes in this trade matter.
A New View On The Price-Fixing Case?
Recent progressions in the US Big 3 tuna price fixing case gave some inclination that the Trump government was taking the issue seriously, however potential lengthy proceedings and a final outcome are still to come.
A mound of legal cases accuse the US’ largest canned tuna companies of fixing prices of their products artificially high, and decisions still need to be made on whether all allegations are correct, and if legal action will be taken.
The US Department’s own antitrust investigation has most recently led to a guilty plea from two Bumble Bee executives, to the role they played in conspiring to fix canned tuna prices artificially high in the US market. It’s been deemed likely that they will at least pay substantial fines for their wrongdoings, and may even fail jail time.
However, a recent move taken by Trump to fire 46 US attorneys has seen him wipe out most of the remaining leftovers of a Trump administration, and sweep away all of the know-how of the price fixing issue. This means that the majority of the department positions will now be filled with Trump loyalists, and it is unclear if they will prioritize the overarching antirust case into the US packaged seafood industry.
Until the government department makes a final decision on whether there is enough evidence to launch criminal litigation, other civil lawsuits accusing the Big 3 tuna firms of price fixing cannot move forward.
Trump’s pick for the new Attorney General of the DOJ is Jeff Sessions, a Republican Senator known to be pro-business. However, he has also been said to have taken a tough line on corporate offenses in the past.
The US In RFMOs: America First?
As a particularly active player in decisions within the WCPFC, ICCAT and IATTC, the position the US will now take at these annual meetings, and on measures for increased sustainability within the global tuna fishery, is yet to be seen.
It’s already clear that Trump’s position on environmental issues is at the other end of the spectrum than Obama, and the US, under his lead, will continue to have a loud voice at these annual talks.
Mostly working under a consensus vote system, getting every delegation on board with proposals made in RFMO meetings is crucial. This means that strong opinions from the US, depending on which way it decides to sway, have the power to both stimulate and block progress.
‘America first’ is Trump’s motto, so policies may shift away from consensus, with the US potentially putting its own interest first. With this could come less consideration for smaller island states on issues like high seas fishing, bigeye quotas, and the annual WCPO FAD ban.
Lack Of Management In US Fisheries?
It hasn’t taken long for Trump to sign an executive order directing federal agencies to scrap two existing regulations for each new one they wish to implement, a move that will impact the National Marine Fisheries Service’s (NMFS) ability to control the US tuna fleet.
The signing will reportedly prevent NMFS from closing commercial fishing seasons in federal waters; making in-season adjustments to conservation and management measures; or implementing new or revised fishery management plans, without first seeking a waiver from the Trump administration.
Sources representing the US fleet have stated that it remains to be seen exactly how the regulation order will be implemented, but stressed from a conservation point of view that the fleet will continue to fish responsibly and sustainably.
The American Tunaboat Association (ATA), the umbrella group of the US purse seine fleet, believes that US tuna vessels are overregulated in several areas, and would like to think that in the future there will be less regulation, and with a less heavy hand.
So, what’s next?
It’s still early days for Trump, but even in his first few months he’s scrapped the TPP, shown disbelief in environmental issues like climate change, and a strong desire to increase industry within the United States. The tuna sector, just like many others, will have to wait and see how his presidency plays forward.
Based on all Trump’s previous statements, however, we can be sure of definite effects on US, but also global tuna trade and fishing within the coming four years of his presidency.