June 14, 2002 | WebMemo on Department of Homeland Security

Terrorism, Tariffs and...Tuna?

Quick Hit: The tuna tariff dispute should serve as an incentive for the United States and ASEAN countries to prioritize negotiations of a free-trade agreement to eliminate these periodic trade spats.



America's war on terrorism has been used to advance a variety of agendas of widely varying relation to the war itself. So it comes as no surprise that security arguments have entered a trade imbroglio over canned tuna.

The Andean Trade Preference Agreement now before Congress-which would lift tariffs on canned tuna from Bolivia, Columbia, Ecuador, Peru and Venezuela-has angered members of the Association of Southeast Asian Nations (ASEAN), which currently faces tariffs as high as 35 percent.

ASEAN countries control 90 percent of the lucrative U.S. import market for tuna, and the trade preference act is not the only factor that threatens their position.

Ecuadorian exports of canned tuna have grown 600 percent in the past year, partly because of lower transportation costs. Lower tariffs will give Andean fishermen and canneries an even greater advantage over their Asian counterparts.

That is why the ambassadors of Brunei, Burma, Cambodia, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand, and Vietnam sent a letter to Congress to request the tuna provision be stricken from the bill.

ASEAN nations are correct to demand "a level playing field" for the U.S. tuna market, but they are taking the wrong track to achieve it. Instead of arguing for the removal of the tuna provision in the Andean Trade Preferences Act, ASEAN countries should lobby the United States to eliminate tariffs on canned tuna across the board. And the United States would be wise to consider it.

Lower and simpler tariffs will benefit both tuna producers and American consumers. Uneven tariffs already have forced companies to develop unnecessarily complex business models. For instance, one U.S. tuna company cleans and cooks its tuna in Ecuador, then ships it to California and Puerto Rico for canning just to avoid higher tariffs.

Equal competition also benefits American consumers with higher quality and lower prices. Tuna is the most widely eaten fish in the United States as Americans consume about $1.2 billion worth per year.

The Philippines, where officials say preferential tariffs for Andean countries could wipe out its tuna industry, leads the opposition, and its case is worth consideration.

The Philippines' tuna industry is centered in Mindanao, a city in the southernmost island chain that has become home to a violent Muslim insurgency. Some 660 American soldiers are deployed there to help the Philippine military hunt down the al Qaeda-linked Abu Sayyaf group, which holds two Americans hostage.

Some worry that many of the 10,000 workers employed in the tuna canning industry may join the terrorist groups operating in Mindanao if they are laid off.

This assumes the natural disposition of the Filipino Muslim population is criminal, and that all that holds back many Filipino Muslims from career terrorism today is a day job at the tuna factory.

Furthermore, the reasoning behind granting trade privileges to Andean countries applies equally to Southeast Asia. The preferential treatment for Andean countries is designed to offer would-be drug manufacturers alternative sources of income. Southeast Asia fights the illicit drug industry, too, not to mention its war to root out established al-Qaeda cells.

Southeast Asia already has become the leading source of amphetamine-type stimulants, the fastest growing drug category. And Southeast Asia outranks South America in opium, heroin and cannabis seizures.

The tuna tariff dispute should serve as an incentive for the United States and ASEAN countries to prioritize negotiations of a free-trade agreement to eliminate these periodic trade spats.

Paolo Pasicolan is a Policy Analyst in the Asian Studies Center at the Heritage Foundation in Washington, D.C.

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