Shrimp and U.S. Foreign Policy-A Reflection

“To many businesses and governments abroad, U.S. trade policy is the face of U.S. diplomacy – the most bankable feature of foreign policy. It can be a useful tool in the battle with China to win the hearts and minds of other countries. It is also the bridge between U.S. consumers and global markets. It’s past time for U.S. policy to coherently reflects these realities simultaneously.”

Dan Ikenson, “Shrimp Trade Ruling To Impact Prices And US Influence In Latin America Ruling To Impact Prices And US Influence In Latin America”

Forbes Online (as of October 22, 2024).

How can the price of shrimp in the U.S. impact U.S. foreign policy? Dan Ikenson's article in Forbes reflects that point. I agree with this point because it reflects a point about how we define international trade. We need to discuss this issue to understand his quote above.

?The Shrimp Case

The case centers on the case heard yesterday before the U.S. International Trade Commission. U.S. shrimp companies allege Ecuador, India, Indonesia, and Vietnam are?importing too much shrimp into the U.S. market. Specifically, the U.S. shrimp companies are accusing the countries?of price dumping. Dumping is defined as,

“…when a country or company exports a product at a lower price than its domestic sale price…dumping is often considered an unfair pricing strategy. Because dumping typically involves substantial export volumes of a product, it often endangers the financial viability of the product's manufacturer or producer in the importing nation.”

Ikenson explains that aquafarming is one reason Ecuador, India, Indonesia, and Vietnam produce more shrimp. Aquafarming involves raising shrimp, similar to how a farmer raises chickens or other livestock?sold for meat.

However, Ikenson points out that the?U.S. shrimp industry does not use the aquafarming approach. This point is supported by the National Oceanic Atmospheric Administration (NOAA), which oversees the catching of fish in the U.S. Specifically, NOAA states, “While the worldwide amount of wild-caught seafood has largely remained the same since the late 1980s, the amount produced through aquaculture has risen dramatically. However, this growth has been largely outside of the United States. Globally, the United States is a relatively minor aquaculture producer…”

Why Does This Matter? A Reflection of International Trade

This case is indicative of how the current administration views international trade. International trade allows for competition. It forces domestic companies to produce better products and compete in different markets. That competition will enable companies to innovate if they so choose. ?

Unfortunately, Republicans and Democrats view international trade as a threat to U.S. workers. From this 2023 Hill article, “Trump’s defeat in 2020 by President Biden put in the Oval Office a more traditional kind of policymaker in the White House. It represented a shift from the Trump ‘America First’ policies on immigration and diplomacy, but not much for trade.” The Trump-Biden trade policy continues when the Biden Administration continues the previous administration’s tariffs on China or when the Biden Administration makes no effort to join in the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership and decides to reinvent the wheel with the Indo-Pacific Economic Partnership. ??

At the same time, both political parties recognize the challenges that China is and will bring shortly. However, both parties fail to realize that?international trade requires a balance between U.S. foreign and U.S. domestic policy, leading to the quote at the beginning of this post.

Competing against China is more than diplomacy. It is economic. We need allies. We cannot compete against China by ourselves. Because we need allies, we need to treat them better rather than holding them under the threat of tariffs. We must signal to our domestic companies that price-dumping accusations will not be tolerated when their competitors succeed due to innovation. Our workers are resilient and need to be supported, but unfortunately, our current policies coddle them because we try to block innovation.

Conclusion

International trade policy requires a balancing act. But guess what? We are not the only nation that is making those calculations. Any nation negotiating a free trade agreement with us has done the same calculation. When the U.S. enters a foreign market, do you think that the?labor market in that country has not been disrupted and jobs have been lost? If we treat our allies in a transactional manner, do not be surprised when that standard is applied to us.

Congress and the President need to develop an international trade policy that balances our foreign policy goals and our economic goals. That will require an assessment of priorities and an honest discussion with the American people. Something that has been missing in these past elections.