Dawes, ornamental fish

U.S. fish: innocent victims of an aircraft trade war

Here are two code numbers: 0301 11 00 00 and 0303 13 00 10. They probably don’t mean much to many of our readers, just as they didn’t mean much to me … that is, until I delved into the matter in some detail.

It turns out that the first one is the code for “live ornamental freshwater fish” and the second one is for “other” fish. Both feature at the top of Annex II included at the end of a letter dated Nov. 11, 2020, issued by the U.K.’s Her Majesty’s Revenue and Customs (HMRC) dealing with its “commercial policy measures concerning imported products originating in the USA.”

The letter goes on to say: “Following the adjudications in the WTO dispute DS353 United States – Measures Affecting Trade in Large Civil Aircraft and following the authorisation of the WTO Dispute Settlement Body, the Commission has applied additional customs duties @ 15% and 25% on imports into the Union of certain products, originating in the United States of America, by Implementing Regulation (EU) no. 2020/1646, Official Journal ref. L373 … ”

Yes, you read it right! The letter refers to “Large Civil Aircraft,” not fish! However, ornamentals are included in the long Annex II of imports to which 25 percent “additional customs duties” now apply. The logic escapes me, just as it does other people and trade bodies such as the U.K.’s Ornamental Aquatic Trade Association (OATA).

They, therefore, wasted no time in writing to HMRC expressing the association’s disquiet at the move, which came out of the blue, i.e., without any forewarning. This does not, however, mean that the tariff issue is a new one. Far from it. It goes back to 2006, since when the U.S. and Europe have been in dispute, with claim and counter claim regarding the aviation industry.

Back in October 2019, the World Trade Organization (WTO) allowed the U.S. to impose tariffs on a range of European products, and, in October 2020, it similarly allowed Europe to impose tariffs on a wide range of U.S. products, including European imports of U.S. ornamental fish.

The impact of such a move is pretty much catastrophic. For a start, it means that European hobbyists now need to pay, at least, 25 percent more for any U.S. fish. I say “at least” because the hike applies to the whole value of the shipment in question, including freight costs. Further, as there’s already a 7.5 percent tariff on marine fish, this means that marine hobbyists now need to pay 32.5 percent more for their fish.

It is conceivable that ornamental fish have—inadvertently or otherwise—been included with food fish (not the first time that this has happened, of course). An indication that this may well be the case is the fact that invertebrates—both freshwater, such as prawns, and marine, such as corals, shrimps, etc.—are not mentioned and are therefore not subject to the tariff.

Whatever the case may be, the result is disastrous. As a result of European hobbyists having to face this tariff, they are likely to look elsewhere for their fish, perhaps not directly, but by applying pressure on importers, wholesalers and retailers who can offer many of the same U.S. species, but from other sources. This, in turn, places U.S. producers and exporters in a very difficult situation.

As the online publication Coral Magazine says in its Nov. 20, 2020, edition: “At a time when American businesses are already hurting due to pandemic related closures and ongoing unemployment, the addition of new tariffs on American exports comes at a most inopportune moment. Producers and exporters of ornamental aquarium fish in the US now face an increasingly uncertain future, and more than one organization was completely caught off guard by this sudden development.”

For its part, OATA says: “25% duty on live fish consignments coming from the US is a large hike and it is very disappointing that it was introduced without any formal warning to impacted businesses which would have allowed them to adjust their costs. As this arises from an EU regulation it is unlikely that much can be done but we are talking to HMRC to try to find out why there was no warning, how long this will continue, and whether a derogation can be considered for imports into the UK.”

As we stand at the moment, we await news from HMRC with regard to the U.K. side of things, and from the EU authorities regarding the European perspective. The urgency of this matter may mean that it might be resolved within the next couple of months. However, let’s not allow ourselves to be too optimistic … experience has taught us otherwise!

UPDATE

The U.K.’s Department of International Trade recently made an announcement saying that, while it was retaining some of the tariffs on U.S. products, it was suspending others. Among these suspensions are the “additional tariffs” imposed by the EU and, hence, the U.K., on certain U.S. goods arising from the Boeing dispute. Among these suspensions are the tariffs on U.S. fish described in this article. The statement reads: “ … the UK government is suspending retaliatory tariffs resulting from the Boeing dispute in an effort to bring the US towards a reasonable settlement and show that the UK is serious about reaching a negotiated outcome. The government reserves the right to impose tariffs at any point if satisfactory progress towards an agreeable settlement is not made.”

So, at least for the moment, the matter seems to have been resolved, but, clearly, the door remains open for the tariffs to be reimposed if the U.K. authorities feel justified in doing so. Therefore, we cannot definitively assume that the new measures will prove to be permanent and, thus, await further developments over the coming months.

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John Dawes is an international ornamental aquatic industry consultant. He has written and/or edited more than 50 books and has contributed more than 4,000 articles to hobby, trade and academic publications. He is the editor of the OFI Journal and a consultant to AquaRealm, the trade show that took place June 2017 in Singapore.