The Maine lobster industry has faced more than its share of challenges over the past few years. The industry has weathered unfavorable trade regulations which have made Maine lobster less competitive in the European and China markets, gotten through massive reductions in herring supply, braced for new whale regulations and have been taking it one day at a time as the economic realities of the pandemic have unfolded during 2020.
The lobster industry welcomed news from Congress this spring that sole-proprietors and the self-employed were included in the COVID-relief packages for small businesses. For the first time, the self-employed were eligible for pandemic unemployment benefits, as well as loan programs from the SBA to cover payroll and other costs. During the past few months lobstermen have seen additional actions favorable to the Maine lobster industry.
In August, U.S. Trade Representative Robert Lighthizer and European Union (EU) Trade Commissioner Phil Hogan announced that the EU would remove an 8% tariff on live lobster and an up-to-20% tariff on processed lobster, retroactive to August 1. In exchange, the U.S. will reduce tariffs by 50% on selected goods imported from Europe.
In September, the U.S. Department of Agriculture (USDA) announced creation of a $527 million seafood trade relief program to offset economic harm caused by retaliatory Chinese tariffs on seafood.
Maine lobstermen are eligible to receive 50 cents for every pound of lobster landed in 2019, up to a limit of $250,000. Maine landed nearly 101 million pounds of lobster in 2019, valued at $485.4 million. Fishermen targeting other species that qualified for relief under this program will receive between one and 20 cents per pound. The application process for the USDA program (www.farmers.gov/Seafood) began on September 14 and will close on December 14. The program is fully funded and all applicants who meet the eligibility criteria will receive a relief payment.
Also in September, the United States International Trade Commission (USITC) announced it will investigate the impacts of the Canada-E.U. Trade Agreement (CETA) on the U.S. lobster industry. CETA entered into force in 2017. The investigation is the result of a letter sent from Trade Representative Lighthizer requesting the USITC provide a complete overview of the U.S. and Canadian lobster industries, including the trends in exports between both countries and the U.K. and E.U.
The investigation will provide an overview on the lobster industries of the two countries, including “information on production and catch levels, employment, processing capacity, supply chains, prices, domestic consumption, and key factors that affect industry competitiveness.” Using that information as a base, the investigation will examine export trends between the U.S. and Canada and Europe, in addition to other major destination markets.
Removing tariffs on lobster and lobster products sold to the European Union could be a shot in the arm for Maine lobstermen and lobster processors. Photo courtesy of SeafoodNews.com.
Meanwhile, financial relief for Maine fishermen through the CARES Act, passed in March, ran into a snag late in the summer. Twenty million dollars was allocated for Maine’s commercial fishermen, dealers, processors, aquaculturists and party-boat and charter fleet.
The law requires that recipients must certify that they have experienced a greater than 35% loss of revenue due to the COVID-19 pandemic as compared to their previous 5-year average. The Department of Marine Resources (DMR) had understood that it could do this certification at the level of the fishery, thus making every active license holder eligible to receive funds. However, DMR was later told by NOAA that the 35% impact must be demonstrated for each individual license holder, according to an announcement from DMR in early September.
The Department then began an analysis to determine if landings information for the commercial fishing industry could be used to certify loss at the level of the individual. When the analysis is completed the Department will send a letter to each commercial fisherman stating whether the individual’s landings information shows a greater than 35% revenue reduction.
While Maine lobstermen continue to face a variety of regulatory and economic challenges, the recent shift in government trade policy and availability of financial relief programs will go a long way in keeping Maine’s lobster industry afloat during these uncertain times.
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