CHINESE SEAFOOD: SAFETY AND TRADE ISSUES HEARING BEFORE THE U.S.-CHINA ECONOMIC AND SECURITY REVIEW COMMISSION ONE HUNDRED TENTH CONGRESS SECOND SESSION _________ APRIL 24-25, 2008 _________ Printed for use of the United States-China Economic and Security Review Commission Available via the World Wide Web: www.uscc.gov UNITED STATES-CHINA ECONOMIC AND SECURITY REVIEW COMMISSION WASHINGTON : JUNE 2008 U.S.-CHINA ECONOMIC AND SECURITY REVIEW COMMISSION LARRY M. WORTZEL, Chairman CAROLYN BARTHOLOMEW, Vice Chairman Commissioners: PETER T.R. BROOKES Hon. WILLIAM A. REINSCH DANIEL BLUMENTHAL Hon. DENNIS C. SHEA MARK ESPER DANIEL M. SLANE JEFFREY FIEDLER PETER VIDENIEKS Hon. PATRICK A. MULLOY MICHAEL R. WESSEL T. SCOTT BUNTON, Executive Director KATHLEEN J. MICHELS, Associate Director The Commission was created on October 30, 2000 by the Floyd D. Spence National Defense Authorization Act for 2001 § 1238, Public Law No. 106-398, 114 STAT. 1654A-334 (2000) (codified at 22 U.S.C.§ 7002 (2001), as amended by the Treasury and General Government Appropriations Act for 2002 § 645 (regarding employment status of staff) & § 648 (regarding changing annual report due date from March to June), Public Law No. 107-67, 115 STAT. 514 (Nov. 12, 2001); as amended by Division P of the "Consolidated Appropriations Resolution, 2003," Pub L. No. 108-7 (Feb. 20, 2003) (regarding Commission name change, terms of Commissioners, and responsibilities of Commission); as amended by Public Law No. 109-108 (H.R. 2862) (Nov. 22, 2005) (regarding responsibilities of Commission and applicability of FACA); as amended by Division J of the “Consolidated Appropriations Act, 2008, “Public Law No. 110-161 (December 26, 2007) (regarding responsibilities of the Commission, and changing the Annual Report due date from June to December). The Commission’s full charter is available at www.uscc.gov. ii CONTENTS _____ THURSDAY, APRIL 24, 2008 CHINESE SEAFOOD: SAFETY AND TRADE ISSUES Opening statement of Vice Chairman Carolyn Bartholomew, Hearing Cochair… 1 Opening statement of Commissioner Daniel Slane, Hearing Cochair.................. 3 PANEL I: GOVERNMENT PERSPECTIVES ON HEALTH/ SAFETY OF SEAFOOD IMPORTED FROM CHINA Statement of Mr. Donald W. Kraemer, Deputy Director, Office of Food Safety, Center for Food Safety and Applied Nutrition, U.S. Food and Drug Administration, Washington, D.C. ……………………………………………… 4 Prepared statement ……………………………………………………………… 8 Statement of Mr. E. Spencer Garrett, National Oceanic and Atmospheric Administration, U.S. Department of Commerce, Pascagoula, Mississippi 17 Prepared statement …………………………………………………………… 21 Panel Discussion, Questions and Answers ……………………………………… 26 PANEL II: EXPERTS’ PERSPECTIVES ON HEALTH/SAFETY OF SEAFOOD IMPORTED FROM CHINA Statement of Mr. Patrick Woodall, Senior Policy Analyst, Food & Water Watch, Washington, D.C……………………………………………………………… 55 Prepared statement ………………………………………………………… 58 Statement of Ms. Jean M. Halloran, Director, Food Policy Initiatives, Consumer Union, Yonkers, New York………………………………………………………. 58 Prepared statement…………………………………………………………… 61 Panel II: Discussion, Questions and Answers …………………………………… 61 PANEL III: SEAFOOD INDUSTRY’S PERSPECTIVES ON HEALTH/SAFETY OF SEAFOOD IMPORTED FROM CHINA Statement of Ms. Kim Chauvin, Owner, Mariah Jade Shrimp Company Chauvin, Louisiana ……………………………………………………………… 84 Prepared statement…………………………………………………………….. 87 Statement of Mr. Matthew Fass, President, Maritime Projects International Newport News, Virginia………………………………………………………… 88 Prepared statement ……………………………………………………………. 92 Panel III: Discussion, Questions and Answers ………………………………… 106 iii PANEL IV: VIEWS AND PLANS OF GOVERNMENT OFFICIALS Statement of Mr. Harlon H. Pearce, Jr., Chairman, Louisiana Seafood Promotion and Marketing Board; President, Harlon’s L A Fish, Inc. New Orleans, Louisiana………………………………………………………… 137 Prepared statement…………………………………………………………… 143 Statement of David Vitter, A U.S. Senator from the State of Louisiana………. 148 Prepared testimony…………………………………………………………… 153 Panel IV: Discussion, Questions and Answers……………………………….143, 157 PANEL V: THE EFFECTS OF CHINA’S COMPETITION, PRICING, AND DELIVERY CAPABILITY ON THE U.S. SEAFOOD INDUSTRY Statement of Mr. Stephen Minvielle, Director, Louisiana Crawfish Farmers Association, New Iberia, Louisiana…………………………………………….. 173 Prepared statement……………………………………………………………. 175 Statement of Mr. John Williams, Executive Director, Southern Shrimp Alliance Tarpon Springs, Florida…………………………………………………………. 175 Prepared statement……………………………………………………………. 179 Statement of Carole R. Engle, Ph.D., Chair/Director, Aquaculture/Fisheries Center, University of Arkansas at Pine Bluff, Little Rock, Arkansas…………… 179 Prepared statement…………………………………………………………… 184 Panel V: Discussion, Questions and Answers………………………………….. 184 PANEL VI: CHINA’S ADHERENCE TO MULTILATERAL AND BILATERAL TRADE AGREEMENTS IN SUPPLYING SEAFOOD INTO THE U.S. MARKET, CASE STUDY Statement of Dr. Walter R. Keithly, Jr., Professor, Center for Natural Resource Economics and Policy, Louisiana State University, Baton Rouge, Louisiana…. 208 Prepared statement……………………………………………………………. 212 Statement of Schuyler Richard Porche, Doctoral Candidate, Department of Political Science, Louisiana State University, Baton Rouge, Louisiana………… 212 Prepared statement…………………………………………………………….. 216 Panel VI: Discussion, Questions and Answers…………………………………. 216 PANEL VII: PUBLIC COMMENT PERIOD – OPEN MICROPHONE Statement of Mr. Karl Turner, President, A La Carte Specialty Foods, New Orleans, Louisiana………………………………………………………….. 239 iv May 29, 2008 The Honorable ROBERT C. BYRD President Pro Tempore of the Senate, Washington, D.C. 20510 The Honorable NANCY PELOSI Speaker of the House of Representatives, Washington, D.C. 20515 DEAR SENATOR BYRD AND SPEAKER PELOSI: We are pleased to transmit the record of our April 24-25, 2008 public hearing in New Orleans on “Chinese Seafood Imports: Safety and Trade Issues.” The Floyd D. Spence National Defense Authorization Act (amended by Pub. L. No. 109-108, section 635(a)) provides the basis for this hearing, as it requires the Commission to report to the U.S. Congress on “the qualitative and quantitative nature of the transfer of United States production activities to the People's Republic of China, ... the impact of such transfers on United States national security, ... and the effect of such transfers on United States economic security and employment.” In this hearing, the Commission sought to determine whether exports of Chinese seafood to the United States pose a threat to consumer health and, if so, whether U.S. regulatory agencies have the resources and procedures to respond adequately to such a threat. The Commission also examined the effect on the Gulf region fishing industry of a surge of imports of seafood from China. In addition, the Commission considered testimony on the efficacy of the penalty tariffs placed on crawfish and shrimp imports from China. Those penalty tariffs were imposed after determinations by the U.S. Commerce Department and the U.S. International Trade Commission that China was selling those exports at prices below the cost of production. The two days of testimony were particularly timely. The hearing followed revelations over the past year of a variety of health risks to American consumers from imports of Chinese toys, cough syrup, toothpaste, pet food, and pharmaceutical medicines such as heparin, a widely-used anti-coagulant. Congressional committees also have been holding hearings to examine these same issues and are considering moving remedial legislation and increasing funding for the Food and Drug Administration, the federal agency with primary responsibility for monitoring seafood imports. The testimony to the Commission revealed some disturbing trends in the imports of seafood and highlighted a number of deficiencies in the regime regulating these imports. The Commission expects to address these concerns in its annual report to Congress in November and to offer recommendations for legislation and policy changes to address the problems identified during the hearing and subsequent research by the Commission. v In summary, imports of seafood, particularly those from China, now dominate the U.S. consumer seafood market. Imports now account for 83 percent of seafood consumed in the United States, and China is the largest source of imported seafood by volume, supplying the United States with a fifth of its imported seafood. In particular, China is the largest source of shrimp, the most popular seafood in the United States. America’s growing demand for imported seafood is being satisfied in part with the imported products of Asia’s rapidly growing aquaculture industry, particularly in China. Not only does China maintain the world’s largest fishing fleet1 and rank as the world’s largest purveyor of wild-caught fish; it is the largest producer of farmed fish as well, accounting for 70 percent of Asia’s farmed fish.2 The very rapid expansion of fish farming in China poses some special challenges for the United States. Fish can be grown quite cheaply in farms, especially if little attention is given to the environmental harm and the potential human health threats involved in crowding large numbers of fish into relatively small containers, ponds, or cages. In such circumstances, fish farmers face the increased likelihood that bacterial, viral, fungal, or parasitic diseases will spread quickly and destroy an entire crop of fish. The responsible solution would be to reduce the concentration