30 January 2015

Free trade agreement between U.S. & EU could spells trouble for American Samoa canneries

Tri-Marine working with U.S. trade Reps in DC to include territory in agreement

By Fili Sagapolutele


Tri Marine International is targeting the European markets for export of its canned tuna products and the company is currently waiting for authorization from the European Union (EU), which at this point does not recognize that the U.S. Food and Drug Administration is the authorized federal regulator for exports from the U.S. territory.

With free-trade negotiations ongoing between the U.S. and the EU, Tri Marine along with ASG wants to make sure that American Samoa is not excluded, because such exclusion will mean tuna products from the territory would pay a 24% duty fee in Europe.

Tri Marine’s cannery operations will be launched on Jan. 24 at its local Samoa Tuna Processors Inc., facility in Atu’u and the target market is duty-free export to the U.S. with its canned tuna carrying the “Made In USA” label.

It is also targeting the European markets where there are “export impediments”, which Tri Marine and the American Samoa government are collaborating to have removed.

Gov. Lolo Matalasi Moliga mentioned this issue briefly during his State of the Territory address to the Fono on Monday.

Responding to Samoa News questions, Tri Marine chief operating officer Joe Hamby said the company and ASG are collaborating to “remove tariff and non-tariff trade barriers” to expand the markets that are economically accessible to the American Samoan tuna industry.

“The reason is simple. More markets mean more production and more jobs for our new cannery,” he said through the company’s communication office.

He also said that the non-tariff trade barrier “we are trying to overcome" is with the European Union, "which does not recognize the US Food and Drug Administration (FDA) as the competent sanitary authority for tuna exports from the territory.”

FDA director Camille Brewer has written to the European Commission “to clearly explain that the FDA is in fact the competent sanitary authority for the Territory,” he said, adding that while the EU has acknowledged Brewer’s letter, it “has not yet recognized the authority of the FDA over tuna exports from American Samoa to the EU.”

Asked how lifting the EU restrictions will benefit Tri Marine tuna product exports, Hamby said that lifting the restrictions “will allow all exporters in the Territory to sell tuna products to the EU.”

“Having additional markets can only be seen as positive for the Territory’s tuna industry,” Hamby said. “The more markets we can reach, the more ability we have to meet a growing demand for tuna and the more opportunity we have to create new jobs in American Samoa.”

Hamby went on to point out that on a global basis, the EU is an important market for Tri Marine, which intends to start exporting to the EU as soon as the FDA’s authority is recognized.

“The other critical issue is the potential free trade agreement that the US is currently negotiating with the EU,” he said. “Currently, canned tuna shipped to the EU includes a duty of 24 percent.”

According to the Tri Marine official, current free trade negotiations have introduced the real possibility that the duty on canned tuna will be reduced to zero and if that happens, EU canned tuna producers will be able to sell their canned tuna in the US without duty and US canned tuna producers will be able to do the same in the EU.

“However, American Samoa is currently excluded from those negotiations. So even if a free trade agreement is reached between the US and the EU, American Samoa tuna products will still have to pay 24 percent duty in the EU,” Hamby explained.

“This is a significant disadvantage for American Samoa as we anticipate that we would see a lot of new European canned tuna producers exporting their canned tuna duty-free to the US in direct competition with American Samoa,” he said. “Those producers export very little to the US market currently because they have to pay 12.5 to 35 percent duty.

“Once that duty is eliminated, we would expect their products to be competitive, and that they would be able to take market share away from the American Samoa canneries,” he said, adding, “It’s critical that the US negotiators understand that American Samoa needs to be included in their free trade agreement discussions.”

Tri Marine is working with the U.S. Trade Representative in Washington D.C. and with ASG to make sure that they are aware of the potential negative impact on American Samoa of the free trade agreement being negotiated between the US and EU.

“Our request is that they treat tuna as a sensitive commodity and it either be excluded from the agreement or that the American Samoa leadership find a way to include the Territory in the agreement so that the American Samoa tuna industry can have the opportunity to export duty-free to the EU,” he said.

“This will give us a level playing field. EU products would be able to come to the US duty-free and American Samoa tuna products would be able to go to the EU market duty-free,” he said.