Legislature(2021 - 2022)GRUENBERG 120

01/25/2022 11:00 AM House FISHERIES

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11:07:09 AM Start
11:08:41 AM SJR16|| SJR17
11:49:26 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Please Note Time Change --
Heard & Held
-- Invited & Public Testimony --
Heard & Held
-- Invited & Public Testimony --
            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                                                               
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                                                                    
     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                                                               
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                                                               
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                                                               
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                                                               
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                                                               
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