U.S. lobster companies are now reaching out to their government for help as they fear losing out the business to their Canadian competitors.
Canada’s trade accord with Europe has given the Canadian lobster industry a sudden leg-up on American competitors in the lucrative market, adding to alarm in the U.S. lobster world over retaliatory tariffs from China, The Financial Post reported.
Whether to make lobster rolls or grilled lobster, the sale of the prized shellfish to China has grown due to the trade war between the United States and China. Similarly, as European trade duties are no longer applicable, Canada has been gaining a price edge.
U.S. lobsters are likely to become more expensive for EU customers due to tariffs, while Canadian lobsters, which are considered good quality, will become more popular. U.S. President Trump’s view of multi-lateral trade agreements could become the bane of the U.S. lobster industry.
Meanwhile, Canadian lobster companies are already seeing huge exports and an increase in sales.
“I know it’s been positive, and I know we are selling more in markets where we weren’t competitive before,” Geoff Irvine, executive director of the Lobster Council of Canada, told Financial Post.
Lobsters are Canada’s biggest fisheries sector, with exports worth about $2.1 billion a year, Irvine added. Europe charges tariffs ranging from six per cent on frozen whole lobster to eight per cent on fresh lobster and 20 per cent on processed lobster.
After CETA, the duty on live lobster has been removed, and other duties are being phased out over a period of three to five years.
The Comprehensive Economic and Trade Agreement is a free-trade agreement between Canada, the European Union and its member states. It has been provisionally applied, so the treaty has eliminated 98% of the tariffs between Canada and the EU.
This means that European seafood lovers are more likely to prefer Canadian lobsters since they already have a reputation for good quality. The lobster industry in Maine has taken a pretty significant hit, according to experts.
Canadian lobster is popular in China. The Chinese ambassador to Canada, Lu Shaye, is pushing for direct flights between Halifax and China to facilitate Canadian live lobster exports to China. US lobster exporters understand the importance of maintaining good trade relations between the U.S. and China. With the growth of the Chinese middle class, the demand for lobster in China is increasing.
While the U.S. lobster industry is losing market share in Europe and China, they must now look for customers elsewhere. Some experts are pointing towards a free trade agreement with South Korea.