Legislature(2021 - 2022)SENATE FINANCE 532
04/21/2021 03:30 PM Senate RESOURCES
Note: the audio ![]()
and video ![]()
recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.
| Audio | Topic |
|---|---|
| Start | |
| Presentation: Barriers to Global Seafood Trade by At-sea Processors Association | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
JOINT MEETING
SENATE SPECIAL COMMITTEE ON WORLD TRADE
SENATE RESOURCES STANDING COMMITTEE
April 21, 2021
3:31 p.m.
MEMBERS PRESENT
SENATE RESOURCES
Senator Joshua Revak, Chair
Senator Peter Micciche, Vice Chair
Senator Gary Stevens
Senator Natasha von Imhof
Senator Jesse Kiehl
Senator Scott Kawasaki
SENATE SPECIAL COMMITTEE ON WORLD TRADE
Senator Gary Stevens, Chair
Senator Lyman Hoffman
Senator Shelley Hughes
Senator Peter Micciche
Senator Tom Begich
MEMBERS ABSENT
SENATE RESOURCES
Senator Click Bishop
SENATE SPECIAL COMMITTEE ON WORLD TRADE
Senator Click Bishop
Senator Bert Stedman
OTHER LEGISLATORS PRESENT
Senator David Wilson
COMMITTEE CALENDAR
PRESENTATION: BARRIERS TO GLOBAL SEAFOOD TRADE BY AT-SEA
PROCESSORS ASSOCIATION
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
STEPHANIE MADSEN, Executive Director
At-Sea Processors Association
Juneau, Alaska
POSITION STATEMENT: Co-presented a PowerPoint on the barriers to
the global seafood trade.
MATT TINNING, Director of Sustainability and Public Affairs
At-Sea Processors Association
Washington, D.C.
POSITION STATEMENT: Co-presented a PowerPoint on the barriers to
the global seafood trade.
ACTION NARRATIVE
3:31:52 PM
CHAIR GARY STEVENS called the joint meeting of the Senate
Special Committee on World Trade and the Senate Resources
Standing Committee to order at 3:31 p.m. Present at the call to
order from the Senate Special Committee on World Trade were
Senators Begich, Hoffman, Hughes, Micciche, and Chair Stevens;
and present from the Senate Resources Standing Committee were
Senators Micciche, Stevens, von Imhof, Kiehl, Kawasaki, and
Chair Revak.
^PRESENTATION: Barriers to Global Seafood Trade by At-Sea
Processors Association
PRESENTATION: Barriers to Global Seafood Trade by At-Sea
Processors Association
3:33:06 PM
CHAIR STEVENS announced the business before the committees would
be a presentation from the At-Sea Processors Association about
Alaska seafood and the U.S. trade policy. He introduced the
presenters, Stephanie Madsen and Matt Tinning.
3:35:28 PM
STEPHANIE MADSEN, Executive Director, At-Sea Processors
Association, Juneau, Alaska, shared that she came to Alaska
about 50 years ago to work for her aunt and uncle in their air
taxi service in Cordova. She met her late husband who was a
pilot born and raised in Kodiak, so it was not a surprise that
they moved to Kodiak. She taught school and her husband was a
fish spotter looking for hearing. After several years an
opportunity came up in Unalaska Dutch Harbor to fly Grumman
goose airplanes. Over the next 19 years they watched the foreign
fleets and the development of a fully domesticated federal
fishery. She reminded members that the Magnuson Stevens Act
allows the U.S. to manage fisheries from 3-200 miles offshore.
MS. MADSEN deferred to Mr. Tinning to talk about his history.
3:39:56 PM
MATT TINNING, Director of Sustainability and Public Affairs, At-
Sea Processors Association, Washington, D.C., stated that for
the last two years he has been privileged to work with the
Alaska seafood industry. Coming from Australia, he quickly
learned that there is nothing like Alaska seafood anywhere else
in the world. He said he works at both the federal level and
globally to ensure that Alaska's global leadership on
sustainable seafood is recognized and rewarded.
3:40:38 PM
MS. MADSEN displayed the image on slide 3 of Senator Stevens and
two others showing affection for a larger than life Alaska
Pollock. She described Alaska Pollack in terms of the three
"S's," the first of which is size. She directed attention to the
pie chart on slide 4 that shows Wild Alaska Pollack represents
just more than one-third of the fish landed in federal waters
that extend from Hawaii to the Pacific coast to New England to
the Caribbean. At 1.3 metric tons, it is the largest seafood
fishery in the world. Only the Peruvian anchorite reduction
fishery is larger. She said it is this scale that makes Alaska
an international powerhouse. This single fishery accounts for
about 20 percent of global wild caught white fish production.
MS. MADSEN said sustainability is the second "S." She
characterized the North Pacific fishery management as the envy
of the world, and expressed pride in the decades-long
sustainability story. She said features of the management system
include: precautionary science based caching limits set by the
North Pacific Fishery Management Council; two independent
observers on every vessel in the fleet monitoring operations and
recording everything that is caught on scales and cameras; one
of the lowest bycatch rates of any large-scale fishery in the
world. More than 98 percent of what comes up in the nets is
pollack. It is one of the lowest carbon footprints of that any
protein. An independent lifecycle analysis is forthcoming that
will show eating Pollack it is less carbon intensive then eating
vegan. The fish is used 100 percent. Most of the vessels produce
fishmeal and fish oil with the parts of the fish not used for
core products. Nothing goes to waste. She said there is more to
the story, but it is sufficient to say she would put Alaska's
sustainability record up against any other fishery in the world.
That record has been consistently recognized by independent
certifiers, including the Marine Stewardship Council and the
sustainability certification by the Alaska Responsible Fishing
Management team.
3:44:36 PM
SENATOR KAWASAKI asked if the sustainable certificate applied
only to Alaska Pollack.
MS. MADSEN answered no; a lot of Alaska seafood is certified as
sustainably managed by both entities. This includes but is not
exclusive to crab, cod, halibut, and sablefish.
SENATOR KAWASAKI asked if the certifications applied
specifically to fisheries in the Bering Sea that operate in the
same regions as the trawler fleet.
MS. MADSEN answered no; the certifications apply to pollack and
a number of other fisheries in both the Bering Sea and the Gulf
of Alaska.
SENATOR KAWASAKI cited a 2020 article on sablefish bycatch that
said that for the second year in a row, the Bering Sea trawl
fishery caught more sablefish as bycatch than their allocation
allowed - by 484 percent in 2020 and 356 percent the year
before. Together, the over catch was 11 million pounds. He asked
her to speak to mitigation efforts to prevent that type of
bycatch.
MS. MADSEN answered their fleet had not encountered excess
sablefish, but they had seen a change in the distribution of
species across the shelf and in the deep. Changes in encounter
rates can be expected when distribution changes. She added that
the stock was healthy in the Bering Sea and the fishery was
expanding. She suggested members look for the forthcoming
discussion paper on the overages from the North Pacific Council.
3:47:53 PM
SENATOR KAWASAKI mentioned a program that allows bycatch Chinook
and chum salmon headed up the Yukon from the Bering Sea to be
used during times of emergency. He asked if the sablefish
fishery had a similar program.
MS. MADSEN answered no. Bycatch salmon and halibut are the only
species that are permitted to be used in the Food Bank Program,
although the rules are different depending on the fleet. She
noted that their fleet participates in the program for the
incidental catch of Chinook and chum but not halibut. There is
no program for sablefish because it is not a prohibited species
catch. It goes on discard if too much is caught but it is not
prohibited. Salmon, herring, halibut, and crab in some cases are
prohibited species and just salmon and halibut are eligible for
the Food Bank Program.
3:49:29 PM
CHAIR STEVENS asked her to talk about the efforts to decrease
bycatch.
MS. MADSEN replied that their fleet has incidental catch of
Chinook and chum salmon. There are caps for Chinook and if those
are exceeded, the fleet is shut down. In order to incentivize a
performance standard and prevent, they developed a data driven
program of rolling hotspot closure to prevent the fleet from
having to move out of an area entirely. She offered to share the
information they recently presented to the North Pacific Council
that talks about the program. She added that if they exceed the
threshold for herring, they are excluded from certain areas. For
example, the catcher processor (CP) fleet lost an area the size
of Maryland in the northern Bering Sea. She offered to provide
more information or meet one-on-one if anyone wanted more
detailed information.
CHAIR STEVENS expressed satisfaction with the answer.
3:52:52 PM
MS. MADSEN returned to the presentation and explained that the
third S stands for scrumptious. She advised that an Alaska
pollock sandwich could be found in a number of fast food
establishments. In an effort to expand the range of consumer
products that incorporate Alaska pollock, ASPA's sister
organization, Genuine Alaska Pollock Producers (GAPP), has
developed partnerships with consumer brands to build markets for
products such as pollock noodles, pollock wild wings, pollock
jerky, and snackable pollock surimi. She encouraged the members
to try them all.
MS. MADSEN stated that Alaska pollock is just one of the many
Alaska and North Pacific fisheries that feed people in the U.S.
and globally. She reported that approximately 25 percent of
Alaska seafood is purchased by U.S. consumers. According to the
Alaska Seafood Marketing Institute (ASMI), 75 percent of Alaska
seafood production is exported annually to 100 countries, and 80
percent of Alaska pollock goes to export markets. She said ASMI
is doing a terrific job of building a brand for Alaska seafood
in U.S. markets. However, the potential benefit from those
marketing efforts pale in comparison to the importance of access
to export markets. Because 75 percent of Alaska seafood is not
consumed domestically, the Alaska seafood industry lives and
dies based on whether it can export the catch to consumers
outside the U.S. Unfortunately, despite best efforts to secure
good outcomes from federal trade policy and negotiations, the
current state of affairs remains extremely challenging.
SENATOR BEGICH asked what the colored circles on the world map
represent.
3:56:28 PM
SENATOR VON IMHOF joined the committee meeting.
MS. MADSEN replied the slide came from ASMI and she didn't know
what the colors represent, but the size of the circles seem to
represent the size of the market in the different countries.
3:57:10 PM
MR. TINNING continued the presentation. He related that when he
started working with the At-Sea Processors Association in 2018,
it was clear that Alaska seafood was not reaching the
international markets. This was a problem for all Alaska
seafood, not just pollock.
[Audio difficulties from 3:57 to 3:58]
3:58:08 PM
MR. TINNING continued to say that that despite working on fair
access for Alaska seafood over two administrations, trade policy
has not changed very much. It is not a level playing field, and
the more acute examples of the imbalance are in China and
Russia. The crisis became acute in 2018 after the Trump
administration imposed a series of tariffs on Chinese imports to
the U.S. On July 6, 2018 China retaliated with 25 percent
tariffs on a range of U.S. goods that included all U.S. seafood
products. Alaska pollock and all other Alaska seafood was
immediately disadvantaged by the acutely out of level playing
field. The tariff on Alaska pollock and other U.S. seafood was
30 percent whereas Russian pollock had a 7 percent tariff.
MR. TINNING explained that the Alaska seafood industry's export
model and planned growth trajectory was based on the expectation
that the increase in sales into China would be massive. That
changed overnight when the 25 percent tariff went into effect.
Those tariffs increased to 35 percent a few months later, and
settled to 30 percent after the conclusion of the phase one deal
in January 2020. Today, Alaska pollock goes to China with a 37
percent tariff whereas Russian pollock goes with a 7 percent
tariff.
4:00:43 PM
MR. TINNING directed attention to the line graph that reflects
the results of the 30 percent tariffs on U.S. seafood. The blue
line at the top of the graph shows the trajectory of seafood
exports into China from all countries in the world. By 2019 the
exports were 89 percent above the 2017 baseline. That dropped to
35 percent in 2020, largely due to COVID-19. He said this was
clearly a massive boost for seafood producers around the globe,
but it has been a different story for U.S. seafood exports into
China. He pointed to the red line that represents U.S. seafood
exports into China. It shows that despite the huge increase in
consumption of seafood in China, by 2020 the consumption of
seafood from the U.S. dropped to 44 percent below the 2017
baseline. The bottom line shows that Alaska pollock was hit even
harder. By 2020 it was 55 percent below the 2017 baseline. He
described the situation as dire.
4:02:25 PM
SENATOR MICCICHE noted that in 2018 exports into China from all
countries increased 41 percent whereas exports from the U.S.
dropped 14 percent. He asked, "Who was supplying the remainder
of the market that was increasing that quickly?"
MR. TINNING replied the decline only started in July 2018 after
the tariffs were increased.
4:03:54 PM
CHAIR STEVENS announced Senator von Imhof joined the committee
meeting.
SENATOR KIEHL asked if the seafood exports were all the same
type of seafood product or if some was seafood protein.
MR. TINNING answered he was not sure because the data came from
ASMI, but he believes it was an apples-to-apples comparison.
4:04:59 PM
SENATOR MICCICHE asked what countries are represented in the
"From All Countries" data.
4:05:31 PM
MR. TINNING replied all seafood exporting countries except the
U.S. have benefitted, but Russia is the big winner for pollock
exports into China.
CHAIR STEVENS recalled that at one time Russian pollock was
advertised and sold as Alaskan pollock. He said he hoped that
had changed.
MR. TINNING said Senator Murkowski was able to get legislation
passed that prohibited that practice in the U.S., but Russian
pollock continues to be marketed as Alaskan pollock in Europe.
CHAIR STEVENS asked him to continue.
4:07:02 PM
MR. TINNING displayed a bar graph that shows the steady decline
in Alaska seafood exports to China from 2017 through 2020. He
opined that if it weren't for the tariffs, the value of the
exports in 2018, 2019, and 2020 would register off the chart. He
said one other piece of the China puzzle is the chapter 6
commitments of the phase one trade agreement, which was
concluded during the Trump administration. In an effort to pause
the escalating trade war, chapter 6 committed significant
product purchases from the U.S., including food. The At-Sea
Processors Association was pleased that seafood was included as
one of six categories of agricultural food purchase commitments.
However, while China significantly increased purchases of U.S.
wheat and soybeans through the second half of 2020, U.S. seafood
did not enjoy the same bump. China is out of compliance with its
phase one commitments on seafood purchases, and there is no sign
that will change.
4:10:00 PM
MR. TINNING advised that Russia also took restrictive action
against U.S. seafood, including Alaska pollock. The U.S. imposed
sanctions on Russia after it annexed part of eastern Crimea and
Russia retaliated in 2014 by closing its market to almost all
U.S. seafood. ASPA saw a key market evaporate and there are no
clear prospects for that to change. He said it is particularly
galling that Russian seafood continues to enter the U.S. tariff
free.
4:11:04 PM
MR. TINNING directed attention to the line graph on slide 13
that shows the dollar amounts of the U.S. and Russia seafood
trade from 2005 to 2018. The blue line shows an increasing
amount of U.S./Alaska seafood exports into Russia until the ban
in 2014 when they essentially dropped to zero. By comparison,
the red line shows the amount of Russian seafood imported into
the duty free U.S. seafood market, which is the second largest
in the world. Russian seafood imports into the U.S. have
increased by more than 60 percent since Russia closed its market
to the U.S. in 2014. He described this as perhaps the most acute
example of an unlevel playing field.
4:12:18 PM
SENATOR BEGICH asked if he said that in the last administration,
Russia prohibited the import of U.S. seafood products while it
doubled seafood exports to the U.S., tariff free.
MR. TINNING clarified that the market closure was in President
Obama's second term, it continued under President Trump, and it
continues today. Further, Russian imports of seafood increased
63 percent since 2013, so it didn't quite double.
4:13:49 PM
SENATOR HUGHES asked if there has been an effort to correct this
and if so, the status of the effort.
MR. TINNING replied the Alaska delegation is aware of the
problem, ASMI produced a white paper on the matter last year,
and ASPA has flagged the issue with the White House in each
administration, but there has been no change. "We feel like we
are bit players in a large geopolitical tension, and we don't
know how to move the needle on that." He welcomed ideas from the
committee.
SENATOR HUGHES suggested the legislature send a resolution
urging the matter be addressed.
SENATOR MICCICHE commented on the need to take more proactive
steps to correct the unfair situation that is disproportionately
affecting Alaska.
CHAIR STEVENS committed to pursue the issue with both Ms. Madsen
and Mr. Tinning.
4:16:29 PM
SENATOR HOFFMAN referenced slide 10 and asked Mr. Tinning to
provide the percentages of the products broken down by species
so the committee can get an idea of what products are being sold
from Russia into the U.S.
4:17:24 PM
MR. TINNING agreed to provide the information. He noted that the
products coming from Russia like pollack and crab
disproportionately compete with Alaska seafood in the U.S.
market.
MR. TINNING continued the presentation with a discussion of the
tariffs on U.S. seafood exports into Japan. He noted that while
they are not prohibitive at up to 10.5 percent, it is
challenging that Japan has initiated free trade agreements with
third country competitors while the U.S. has not increased its
market access. That was particularly disappointing in 2019
because the Trump administration had concluded a phase one deal
with Japan that focused on agriculture. It gave more market
access to an array of food commodities, but nothing in the
agreement was about seafood.
4:20:25 PM
MR. TINNING said the European seafood market is critical for
Alaska seafood but it has two challenges. The first is that the
only way to get tariff-free access is under the archaic
autonomous tariff quota (ATQ) system. Under that system, Europe
sets a product-by-product quota that it will let into Europe
tariff free. Once that quota is met tariffs of up to 17 percent
are imposed on further imports of the particular seafood
product. ASPA would like that to be addressed in trade with
Europe.
The second challenge is that Alaska seafood has been a constant
pawn in the trans-Atlantic trade fight. For example, U.S.
seafood saw retaliatory tariffs late last year related to the
Boeing-Airbus trade dispute, even though the dispute had nothing
to do with seafood. Alaska pollock was exempt but salmon was
not. He said there is a four month pause but the 25 percent
retaliatory tariffs will go back into effect soon unless the
Biden administration reaches a deal. He said it is not the kind
of crisis U.S. seafood faces in China and Russia, but it is
still a concern.
4:23:10 PM
CHAIR STEVENS asked if he would provide a chart for Europe that
shows the seafood imports and change in values like the ones he
provided for Japan, Russia, and China.
MR. TINNING agreed to provide the information.
4:23:37 PM
SENATOR MICCICHE asked him to follow up with suggestions about
what the legislature could do to help address the fact that
Alaska seafood has been so invisible in the consideration of the
effects of tariffs.
CHAIR STEVENS committed to pursue the issue.
MR. TINNING said he would conclude the presentation by talking
about what he observed about the dynamics of the Trump and Biden
administrations to set the stage to collectively engage going
forward.
MR. TINNING said the trade policy the Trump administration
primarily talked about was for fair and reciprocal trade that
helped U.S. producers. That played out in high profile for the
steel and aluminum industries with 301 tariffs, which limited
imports. The Trump administration went to bat for those
industries and seafood got caught in the crossfire. In the case
of China, Alaska seafood suffered the impacts of the retaliatory
tariffs, but it did not get the same kind of protections in the
U.S. market that steel, aluminum, and a number of other
industries received. Pollock imports from China are a good
example. Most imports from China faced Trump administration
tariffs but Russian pollock that is processed in China did not.
There was never any kind of tariff on imported seafood so U.S.
seafood never had a market advantage at home but it was hit by
the tariffs other countries imposed to retaliate against the
Trump administration for what it was doing in other areas. It
was an ultimate lose-lose.
4:27:11 PM
MR. TINNING explained that in May 2020, the Trump administration
signed an executive order to expand U.S. seafood
competitiveness. The policy was that the seafood trade should be
fair and reciprocal. A new seafood trade task force worked with
seafood processor associations to develop a seafood trade
strategy. The first thing they saw was that the U.S. continued
to face significant import tariffs in China and Russia while
imports from those countries came into the U.S. duty free.
The second thing that happened was that while the seafood
strategy was developed and moved up the chain, it was not
finalized before January 20, 2020, and it has not been released
since then. He said he found it interesting that a seafood
strategy that was developed over the course of most of a year
with input from the Alaska seafood industry has never seen the
light of day.
4:29:08 PM
SENATOR KIEHL asked if he was talking about the same executive
order that directed the National Oceanic and Atmospheric
Administration (NOSS) to permit finfish farms in all U.S.
territorial waters.
MR. TINNING replied there were four distinct elements to the
executive order and aquaculture and seafood trade were two of
those elements. ASPA engaged heavily on seafood trade but not
aquaculture.
SENATOR KIEHL asked if the executive order was still in effect
or if it was paused in the new administration.
MR. TINNING offered his understanding that it was in effect but
also under review by the new administration.
4:30:27 PM
MR. TINNING directed attention to the picture of Katherine Tai,
the Biden administration's U.S. trade representative (USTR), and
noted the U.S. Senate confirmed her on a 98:0 vote. He said that
while there are marked differences between this and the last
administration on many issues, there has been no clear
indication that trade policy on seafood will change
significantly. The U.S. trade representative's office is
organized exactly the same way as the previous administration,
which is that seafood is in the industrials office of the USTR
when it should be in the agriculture section. The USDA, working
with the farm industry, has done considerable work to improve
market access for agriculture, but seafood has not benefited at
all because it is in with industrials. ASPA believes it would be
helpful if a way could be found to move seafood from the
industrials section to the agriculture section of the Office of
the United States Trade Representative. He said seafood is a
national industry, but in D.C. it does not pack the punch of the
agricultural sector, and on occasion it falls through the
cracks. He invited any ideas the committee might have to change
that situation.
4:32:51 PM
CHAIR STEVENS recognized that Senator Wilson was in the
audience.
4:33:05 PM
SENATOR BEGICH suggested the committee work aggressively toward
moving seafood from the industrial section to the agriculture
section in the U.S. trade representative office.
CHAIR STEVENS responded that the World Trade Committee would
work closely with the Resources Committee to pursue that issue.
4:34:06 PM
SENATOR HOFFMAN asked what the Alaska Seafood Marketing
Institute (ASMI) was recommending to address the issue.
MS. MADSEN responded that ASMI is a valuable partner and has
been working alongside ASPA and the Alaska seafood industry
generally to effect change in trade policies. She highlighted
the relevant letters in the packets.
4:35:09 PM
CHAIR STEVENS confirmed the committee had the letters. He asked
Mr. Tinning if he had any final comments.
MR. TINNING echoed the comment that ASMI is a valuable partner.
He concluded, "As an Alaska industry, we're doing our best to be
heard. There is good coordination and good help from the Alaska
delegation in D.C. but it remains an uphill climb."
CHAIR STEVENS commented on the high quality of pollock protein,
and predicted that some resolutions likely would result from the
hearing.
4:36:50 PM
There being no further business to come before the committees,
Chair Stevens adjourned the meeting of the Senate Resources
Standing Committee and the Senate Special Committee on World
Trade at 4:36 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SRES Joint Meeting APA Seafood Trade Presentation 4.21.21.pdf |
SRES 4/21/2021 3:30:00 PM |
SRES Joint Meeting World Traide APA Seafood Trade 4.21.21 |
| SRES Joint Meeting World Trade APA Seafood Trade Task Force Comment Letter 4.21.21.pdf |
SRES 4/21/2021 3:30:00 PM |
SRES Joint Meeting with World Trade Task Force Comment Letter 4.21.21 |
| SRES Joint Meeting World Trade Seafood Sector Introductory Letter to Ambassador 4.21.21.pdf |
SRES 4/21/2021 3:30:00 PM |
SRES Joint Meeting with World Trade Seafood Sector Intro letter 4.21.21 |