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Be careful what you wish for

Protectionism will bring a host of problems for the global seafood industry.

A complex trading web and political instability are a tumultuous mix, and one the global seafood industry is currently experiencing all the chaos and disruption of.

Sprouting roots from Donald Trump’s rampant “America First” anti-trade philosophy and Chinese phone company scandals, tariffs, import rulings and administrative roadblocks are springing up like weeds.

The tit-for-tat tariffs now towering between the US and China have cast their shadow over several sectors of the seafood industry with Chinese and US producers alike diverting, reinventing and re-purposing product for domestic and other markets.

Indian shrimp producers, subject to new import regulations and unusually high antibiotics refusals into their largest market are learning the lesson about eggs and baskets the hard way.

In the southern hemisphere New Zealand, too, is apparently feeling the sensitivities of the Chinese government, with seafood company Sanford reporting difficulties at the Chinese border, issues it suspects are motivated by the New Zealand government's treatment of Chinese mobile phone company Huawei.

And Ecuador has long been fighting Brazil's attempts to shut its shrimp out of the market on the grounds of anti-dumping laws.

It's a messy business, and one that often has unforseen effects, not least in the opening of back doors and new trading paths that do nothing to rectify the perceived problem in the market but everything to confuse and muddy the trade and consumption trends so necessary to improve an industry.

When China banned Norwegian product from the market, unusual volumes began being imported from Vietnam and China has long been a discreet route into countries like North Korea.

And now, in the US, regulators have tripped on their own roadblock having given a pass to pollock imported from China because of its huge reprocessing role in US-origin product. The move, American producers argue, has inadvertently given free entry to a vast volume of Russian pollock, now enjoying the same privilege and being breaded and fed up to American schoolchildren at rock bottom prices. Whoops.

But outside of loopholes and back doors, while trade tariffs and import barriers can be soothing for competitors in the home market and provide short term pain relief, this is a treatment that also tends to leave an angry scar.

There is the question of how all these volumes of product, locked out of the market, are going to be substituted.

It is fair to say that while industrialized China could possibly tool itself up for self-sufficiency, service-industry led countries like America certainly can't, with years of regulations and opposition leaving the US a sparse scattering of its own seafood production.

Can US catfish producers churn out an extra 115,000 metric tons next year?

Can the US shrimp producers harvest 660,000?

Seems unlikely.

A reduction of product in the market raises prices and eventually reduces consumption. Alternatives are readily available and consumers are not averse to switching down to a cheaper protein. Higher prices, strapped consumers and lower spends all have long term more wide-ranging economic effects.

So producers and governments of this world, be careful what you wish for. Your dreams might just come true. And you have to wonder where that might leave you.

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