Legislature(2021 - 2022)GRUENBERG 120
01/25/2022 11:00 AM House FISHERIES
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| Audio | Topic |
|---|---|
| Start | |
| SJR16|| SJR17 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SJR 16 | TELECONFERENCED | |
| + | SJR 17 | TELECONFERENCED | |
SJR 16-END RUSSIA EMBARGO ON U.S. SEAFOOD
SJR 17-INCREASE SEAFOOD EXPORTS
11:08:41 AM
REPRESENTATIVE STUTES announced that the first order of business
would be SENATE JOINT RESOLUTION NO. 16, Calling on President
Biden to immediately seek and secure an end to the embargo
imposed by Russia on seafood imports from abroad so that Alaska
seafood producers' access to the Russian domestic seafood market
is fully restored and SENATE JOINT RESOLUTION NO. 17, Requesting
the United States Trade Representative to bring a renewed focus
on the plight of producers of seafood in the state and the
United States and to compel China to comply with its commitment
to increase its imports of seafood products from the United
States.
11:09:28 AM
TIM LAMKIN, Staff, Senator Gary Stevens, Alaska State
Legislature, presented SJR 16 and SJR 17. He explained that SJR
16 related to a Russian embargo imposed in August 2014, on
Alaska seafood products among other imported products in
response to western sanctions imposed due to the Ukraine crisis.
He emphasized the economic value of Alaska seafood. He noted
that current tensions were increasing in Ukraine. He stated
that the Alaska seafood industry was seeking assistance from the
federal government, and SJR 16 and SJR 17 would serve as a
formal request. He noted that the Alaska Seafood Marketing
Institute (ASMI) reported that two-thirds of domestic seafood is
from Alaska. He stated that recent tariff increases imposed by
China had damaged market demand for seafood in China and had
given an unfair market advantage to competitors. He stated that
Alaskan pollock was subject to approximately 500 percent higher
tariffs than those on Russian pollock and resulted in the loss
of hundreds of millions of dollars of market share to
competitors. He stated that SJR 17 would, if passed, restore
focus on negotiations to ease the tariff "war" and level the
playing field for Alaska seafood products. He stated that
Alaska seafood industry members would provide data regarding
financial losses due to the Russian embargo and Chinese tariffs.
11:13:24 AM
REPRESENTATIVE MCCABE stated that the United States trade
representative inadequately represented Alaska seafood exports
on its website. He stated his dismay at the exclusion, and that
the exclusion had caused further [economic] harm by Russia and
China. He requested that testimony be sought to illustrate the
financial impacts that had resulted from the exclusion.
11:14:45 AM
REPRESENTATIVE STUTES asked whether it would be of greater
benefit to Alaska seafood to impose an embargo on Russian and
Chinese seafood products, which would create domestic demand for
Alaska seafood products.
MR. LAMKIN cautioned that the question posed by Representative
Stutes would have global impacts beyond what was being discussed
before the committee.
11:16:23 AM
JEREMY WOODROW, Executive Director, Alaska Seafood Marketing
Institute, testified in support of SJR 16 & SJR 17. He read
from prepared remarks, as follows:
The Alaska Seafood Marketing Institute supports all
efforts that will help increase the value of Alaska's
fisheries. SJR 16 and SJR 17 recognize important
economic hurdles that the Alaska seafood industry
faces in regards to imbalances in foreign trade.
Seafood is one of the most traded food commodities
worldwide and in any given year between 75 and 80
percent of Alaska seafood by volume is exported. It
is vital to the economic health of Alaska's
communities and its seafood industry that we can
remain competitive in the global marketplace.
The challenges that the Alaska seafood industry faces
have only been amplified through the course of the
COVID-19 pandemic, thus further stressing the need for
fair and balanced foreign trade. Over the last two
years, Alaska has seen its export values decline
considerably due to shipping disruptions and
escalating costs, border closures, and rolling
closures of end-markets. When compared to 2019,
exports in 2020 were down $500 million and in 2021
down approximately $300 million. However, Alaska's
export challenges started much earlier than the
pandemic.
SJR 16 and SJR 17 specifically address the ongoing
trade disputes with Russia and China, respectively.
Let's first speak to Russia.
From King crab and Pollock to wild salmon, halibut and
cod, Russia competes with Alaska's commercially
harvested seafood across the global market. The
majority of Russian fisheries are also now certified
sustainable further reducing Alaska's competitive
edge. Furthermore, Russia aims to surpass Alaska in
terms of quality, value and production with its
commitment of nearly $7 billion to modernizing its
seafood processing, cold storage, and fleet. In 2014,
Russia embargoed U.S. food products, including Alaska
seafood. Russia was an important export market for
salmon roe and the embargo overnight displaced $60
million worth of Alaska salmon roe products. Russia,
however, still enjoys access to the U.S. market and
since 2014, the U.S. has seen Russian seafood imports
increase 173 percent. Russian products are often
imported and sold at a lower cost and therefore
undercut the value of Alaska seafood products in our
most valuable market, the United States.
Now switching gears to China: China remains an
important destination for Alaska seafood. The Alaska
seafood industry invested over 20 years developing the
China market for reprocessing and domestic
consumption. The efforts put forth by ASMI and our
industry partners grew China into the industry's
number one export market reaching nearly $1 billion in
exports in 2017. The retaliatory tariffs in 2018,
however, have dropped exports to China to recent
record year lows. Alaska now exports to China just
over half of what it had prior to the retaliatory
tariffs in 2018.
The Alaska seafood industry and ASMI recognize the
need to diversify our export markets. In response,
ASMI has invested nearly $5 million in diversifying
the Alaska seafood industry's overseas portfolio,
which was only made possible by one-time federal
funding, which is soon to expire. New and emerging
markets in Southeast Asia, South America, and Eastern
Europe all show immediate promise for establishing an
additional processing capacity and end-user markets.
However, this too will take time and significant
investment from ASMI and the industry. Until this can
be accomplished, it is important that China remain
open and fair to trade with the U.S. or, at the very
least, make good on its promises to purchase U.S.
seafood under the Phase 1 agreement.
While the geopolitical challenges associated with
Russia and China are significant, and Alaska seafood
is, more often than not, a small role in the
negotiations, the negative impacts to our state, our
communities, and our fishing families is significant.
Your support and the emphasis shown through SJR 16 and
SJR 17 is very much appreciated and also necessary as
we continue to strive for equitable foreign trade.
11:20:33 AM
REPRESENTATIVE STUTES asked her previously stated question of
whether to impose an embargo on Russian and Chinese seafood
products, which would create domestic demand for Alaska seafood
products.
MR. WOODROW stated that, while he is not a foreign trade
negotiation expert, he did express frustration at U.S. seafood
retailers selling imported seafood at a lower cost. He
suggested that the question should be posed to higher level
government officials.
11:21:23 AM
REPRESENTATIVE MCCABE asked the meaning of "certified
sustainable."
11:21:30 AM
MR. WOODROW explained hat there exist several global certifying
bodies to overcome trade barriers in certain regions of the
world and customers who require such certification. He noted
that one of the certification bodies is the Marine Stewardship
Council (MSC) and that Alaska had created its own certification
standard, the Responsible Fisheries Management (RFM)
certification, and that many fisheries in Alaska hold dual
certification. He further explained that the certification is
an eco-label and increases consumer confidence that certified
products meet certain environmental and sustainability
standards.
11:22:26 AM
REPRESENTATIVE MCCABE asked the reason that China was not
associated with certification.
MR. WOODROW explained that southeast Asian fisheries vary in
their sustainability practices. He noted that there may exist
some fisheries in the region which may hold certifications, and
a large segment of Chinese seafood is farmed, which have its own
variety of certification standards.
11:23:08 AM
REPRESENTATIVE MCCABE asked whether there existed a way for
Alaska seafood to market the existence of dual certifications
and distinguish further from Russian seafood products. He noted
that many consumers and chefs refuse any seafood that is not
wild Alaska seafood, and that some concerns exist due to
unsanitary farming practices. He postulated that Representative
Stutes' earlier suggestion of an embargo on competing products
may further differentiate Alaska seafood.
MR. WOODROW answered that Representative McCabe's suggestion to
differentiate Alaska seafood is ASMI's mission. He added that
Alaska fisheries have a "great story," and that generations of
Alaska fishing families are a part of that story. He stated
that those stories resonate with consumers and aid in command of
a higher premium for Alaska seafood products worldwide. He
added that the stories may not be sufficient to compete to
overcome consumer reluctance over the high price point of Alaska
seafood made higher by labor costs and other variables, such as
trade tariffs, have a negative impact on competitive pricing.
11:25:20 AM
REPRESENTATIVE VANCE referred to the document entitled, "SJR 16
Supporting Document - ASMI White Paper - May 2021.pdf,"
[included in the committee packet] at the bottom of page 3, and
asked about the Russian investments that include shipbuilding,
plant building, and aquaculture development and marketing from
2018 to 2025 and are estimated to total $6.9 billion. She asked
what Alaska's long-range strategic plans were to invest in
fisheries development, including research. She suggested that a
20-year plan was necessary, and fisheries would be an important
component of the Arctic passageway. She expressed her agreement
with the suggestion of an embargo in lieu of the joint
resolutions which she compared to a "pretty please" request for
Russia to cease the embargo and China remove the tariffs. She
suggested that an amendment be offered to strengthen the
resolutions to reflect Alaska's value of its fisheries.
11:28:18 AM
REPRESENTATIVE MCCABE expressed his agreement with
Representative Vance's points. He shared his experience in the
1980s and 1990s while on Coast Guard patrol, during which he
experienced [enforcement activities] specifically seeking
Russian trawlers in the U. S. exclusive economic zone. He noted
that the federal government did not maintain the same investment
and funding for patrols as it had during his time of service.
11:29:32 AM
REPRESENTATIVE TARR asked whether the COVID-19 pandemic had
resulted in consumers considering health as it would pertain to
marketing opportunities for Alaska seafood.
MR. WOODROW answered that health [benefit] is a significant
driver of consumer behavior, and seafood is in demand worldwide
as a result of increased health concerns.
STEPHANIE MADSEN, Executive Director, At-Sea Processors
Association, testified in support of SJR 16 & SJR 17. She
provided biographical background including over 40 years of
living and working in coastal Alaska, and for the prior 15 years
she had been associated with the Bering Sea pollock fishery.
She stated her belief that the financial wellbeing of Alaska's
coastal communities was reliant on the Alaska seafood industry.
She stated that a majority of Alaska pollock is exported to Asia
and Europe, and the same remains true for other Alaska seafood
species. She stated that key export market access, including
China, is vital to the economic survival of the Alaska seafood
industry. She stated that competition had been limited in some
markets and completely blocked in others. She stated that
China, prior to 2018 [and the imposition of tariffs] was
positioned to become the most important growth market for Alaska
pollock. She stated that U. S. seafood sales in China had
collapsed. She added that Russia had been an important market
until the 2014 embargo and resulting ban on imports. She stated
that seafood had not been prioritized in international trade
negotiations over several administrations, which had harmed
[Alaska seafood's] competitiveness in key markets sch as Japan
and the European Union. She urged the passage of SJR 16 & SJR
17 to augment the efforts made by her organization and those of
others. She complimented the Alaska congressional delegation's
efforts to advocate for Alaska seafood exports at the federal
level.
11:35:09 AM
REPRESENTATIVE STUTES asked her previously stated question of
whether to impose an embargo on Russian and Chinese seafood
products, which would create domestic demand for Alaska seafood
products.
MS. MADSEN answered that, because Alaska exports products to
other international markets, an embargo on Russian imports could
result in increased market pressure in those markets due to
increased Russian supply. She suggested that there might exist
additional "domino" effects that would be difficult to foresee.
11:36:24 AM
REPRESENTATIVE STORY asked whether the most recent
administration change had resulted in improved trade relations.
MS. MADSEN answered that the Alaska congressional delegation had
championed a meeting with the U. S. Secretary of Commerce and
that additional meetings had and will be taking place to add
seafood to the list of [commodities] traded internationally.
11:39:07 AM
REPRESENTATIVE VANCE referred to her previous question regarding
page 3 of the whitepaper and noted that it depicted an increase
in Russian seafood imports. She requested data on Alaska
seafood domestic sales over the same time period.
11:40:48 AM
CHRIS BARROWS, President, Pacific Seafood Processors
Association, testified in support of SJR 16 & SJR 17. He stated
that the proposed legislation would call attention to trade
inequities in the two, key foreign seafood markets. He referred
to the previous discussion and echoed the sentiment that the
proposed resolutions would be a first step in a larger strategy.
He complimented ASMI's efforts identifying markets for Alaska
seafood in the global market. He offered information on the
Pacific Seafood Processors Association, which was founded in
1914 and comprised of 8 major seafood processing companies
operating 25 facilities in 15 coastal locations in Alaska, and 3
floating processors as a part of its membership. He noted the
economic importance of Alaska seafood to the state, being the
number one export for Alaska and comprises half of all Alaska
exports. He stated that the long-standing, unfair trade
conditions that exist [in China and Russia] threaten the value
of Alaska seafood. He stated that federal trade policies and
negotiations had failed to safeguard U.S. seafood interests. He
stated that, while seafood imports overwhelmingly enter the U.S.
duty-free, steep trade barriers have been imposed by trade
partners. He stated that the proposed resolutions would draw
attention to seafood export's reliance on fair competition in
the global market. He stated that the issues that exist for
seafood exports and international trade are complex and referred
to negotiations that had taken place between the U.S. and the
European Union to allow market access for U.S. seafood exports.
11:45:57 AM
MR. BARROWS explained that the ongoing trade war with Russia had
rendered Alaska companies unable to compete in the global
market, including the vast China export market. He stated that,
according to ASMI data, 63 percent of the China market share for
Alaska seafood had been lost between 2017 and 2019. He noted
that a robust seafood economy helps to shape the economy and
contributes to maintenance of ageing infrastructure and meet the
needs for capital investment. He noted that markets, once lost,
are difficult to recapture, and he likened the biological health
maintenance of the [fisheries] stocks to the economic
maintenance required for good economic health of the industry.
11:48:20 AM
REPRESENTATIVE STUTES opened public testimony on SJR 16 & SJR
17. After ascertaining that no one wished to testify, she
closed public testimony. SJR 16 & SJR were held over.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SJR 16 Sponsor Statement - 5.14.21.pdf |
HFSH 1/25/2022 11:00:00 AM |
SJR 16 |
| SJR 16 Version A - 5.11.21.PDF |
HFSH 1/25/2022 11:00:00 AM HFSH 1/27/2022 11:00:00 AM |
SJR 16 |
| SJR 16 Fiscal Note One - LEG-SESS - 5.18.21.PDF |
HFSH 1/25/2022 11:00:00 AM HFSH 1/27/2022 11:00:00 AM |
SJR 16 |
| SJR 16 Supporting Document - ASMI White Paper - May 2021.pdf |
HFSH 1/25/2022 11:00:00 AM HFSH 1/27/2022 11:00:00 AM |
SJR 16 |
| SJR 17 Sponsor Statement - 5.14.21.pdf |
HFSH 1/25/2022 11:00:00 AM |
SJR 17 |
| SJR 17 Version A - 5.11.21.PDF |
HFSH 1/25/2022 11:00:00 AM HFSH 1/27/2022 11:00:00 AM |
SJR 17 |
| SJR 17 Fiscal Note One - LEG-SESS - 5.18.21.PDF |
HFSH 1/25/2022 11:00:00 AM HFSH 1/27/2022 11:00:00 AM |
SJR 17 |
| SJR 17 Supporting Document - ASMI - U.S. Seafood's Battle in China - 2021.pdf |
HFSH 1/25/2022 11:00:00 AM HFSH 1/27/2022 11:00:00 AM |
SJR 17 |