Wednesday, August 27, 2014

White House Urged to Push Back Against Russia’ Seafood Boycott

Alaska’s congressional delegation has asked the White House to try using all diplomatic means to persuade Russia to rescind its ban on seafood imports, but failing that asks for a ban on importing Russian seafood into the United States.

This approach to Russia’s political brinksmanship has strong support from Alaska’s seafood industry, the Alaska delegation said in a letter Aug. 26 to President Obama.

Russia’s decision to ban imports from the US and Europe stemmed from economic sanctions brought against Russia after the downing of a Malaysian airliner over eastern Ukraine in July, and Russia’s support for separatist rebels whom Western officials blame for the crash.

If a ban is imposed on Russian imports, it is critical that US trade officials implement it in a way that tracks and covers all Russian-origin products throughout the distribution chain, including those reprocessed or transshipped through third countries, the delegation said.

This could be difficult, according to Gunnar Knapp, an economics professor who is director of the University of Alaska Anchorage’s Institute of Social and Economic Research. It may be difficult in some instances to really figure out what is a Russian product, he said.  For example, a lot of Russian fish, just like a lot of Alaska fish, gets shipped to China for reprocessing, and then sent here.  Knapp asked if the US bans imports of Russian fish, would that also include imports of fish caught by Russians in Russia shipped to us from China, and how would we effectively monitor and enforce that?

In general, said Knapp, when Country A bans imports from Country B, prices go up in Country A, and Country A domestic producers benefit.  Meanwhile consumers in Country A are worse off, with higher prices and perhaps the inability to get products they want. And exporters from Country B are also worse off.

Right now, said Knapp, Russian domestic producers are benefitting from higher prices, but Russian consumers are losing because of those higher prices. Meanwhile exporters in the US, including Alaska companies that export salmon roe to Russia, are harmed, as well as Norwegian salmon farmers for whom Russia was their largest market.

Economists, himself included, feel that everyone loses in a trade war when countries ban each other’s imports, he said.

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