Court of International Trade Rejects Twenty-one Cent an Hour Wage Rate for Vietnamese Shrimp Industry

Yesterday, the Court of International Trade reversed a Department of Commerce decision to accept a $0.21 per hour labor wage rate for the purpose of calculating antidumping duties on Vietnamese shrimp. In remanding the decision back to the agency, the Court found that Commerce had failed to adequately explain why it had chosen the low labor rate.

Because Vietnam is a communist country, dumping duties are calculated for Vietnamese shrimp exporters based on “surrogate” costs obtained from capitalist economies. In the underlying administrative proceeding, Commerce decided to use costs from the Bangladeshi shrimp industry, including a labor wage rate of $0.21 per hour.

The Ad Hoc Shrimp Trade Action Committee challenged the use of this absurdly low wage rate, arguing that it understated labor costs in Vietnam. Vietnamese exporters disagreed and argued that a labor wage rate of $0.21 per hour was the best information available for valuing labor rates in the country. Following the Court’s decision Thursday, Commerce will now have to explain why the $0.21 per hour wage rate is appropriate for Vietnam or utilize another surrogate.

The issue before the Court and the Dept of Commerce is a technical question of how to calculate antidumping duties, but this dispute highlights something of far greater importance to those in the shrimp industry: widespread acceptance of gross labor abuses in foreign shrimp processing operations. Assuming a forty-hour work week, a shrimp processing worker in Bangladesh would earn $8.40 a week — $436.80 over a full year. If that same worker worked every single hour of a seven-day week, she would make a grand total of $35.28 per week — $1,834.56 if she worked every hour of every day for an entire year.

In Bangladesh, such low labor rates are made possible both by extreme poverty and by well-documented abuses of labor in the shrimp industry. For their part, Vietnamese shrimp exporters argue that these Bangladeshi labor rates are representative of their industry as well.

What makes this amazing is that the exporters are not arguing that a $0.21per hour labor rate is wrong. Instead, they are doing the opposite and embrace the number in order to keep antidumping duties low. They are not worried about claiming slave wages, perhaps because they don’t believe American consumers care how they get cheap shrimp… only that shrimp remain cheap.

When people say it’s cheaper to produce something overseas, we should be clear about what we are talking about.  Exploiting people for $0.21 an hour is not a comparative advantage.   It is exploitation.  This is what our industry is competing against.  The exploitation of foreign workers at $0.21 per hour wages are a big part of what makes shrimp affordable in the market.  But is increased supply of cheap shrimp a good thing?  Maybe to some US consumers, but I would imagine that for the kids and adults in the Bangladeshi shrimp processing industry this isn’t much comfort.  There is something very wrong when shrimp exporters from Vietnam are comfortable arguing to the Department of Commerce that $0.21 per hour reflects what they pay for shrimp processing.  I understand that for the shrimp processing worker in Bangladesh or Vietnam, $0.21 an hour is better than nothing.  Although there is no gradation in right or wrong, importing the stuff and making huge profits off of it seems even more wrong than paying terrible wages in a poor country.  For those outside of the shrimp industry, the next time you are thinking about buying shrimp and you see how much more expensive the domestic product is compared to imported shrimp, please try to visualize your child or grandchild getting $0.21 an hour to process the shrimp you are eating.  If you can still go with the cheaper option, then you’re certainly tougher than me.

John Williams

Read the Court of International Trade’s decision in Camau Frozen Seafood Processing Import Export Corp. v. United States (Nov. 15, 2012) here: http://www.cit.uscourts.gov/SlipOpinions/Slip_op12/12-137.pdf 

 

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