Legislature(2001 - 2002)
04/09/2001 05:10 PM House FSH
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ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON FISHERIES
April 9, 2001
5:10 p.m.
MEMBERS PRESENT
Representative Gary Stevens, Co-Chair
Representative Peggy Wilson, Co-Chair
Representative Drew Scalzi
Representative Fred Dyson
Representative John Coghill
Representative Mary Kapsner
Representative Beth Kerttula
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
CS FOR SENATE JOINT RESOLUTION NO. 15(RLS)
Relating to imports of salmon from Chile.
- MOVED CSSJR 15(RLS) OUT OF COMMITTEE
PREVIOUS ACTION
SHORT TITLE:CHILEAN FARMED SALMON
SPONSOR(S): SENATOR(S) AUSTERMAN
Jrn-Date Jrn-Page Action
02/22/01 0470 (S) READ THE FIRST TIME -
REFERRALS
02/22/01 0470 (S) RES
03/16/01 (S) RES AT 3:30 PM BUTROVICH 205
03/16/01 (S) Moved Out of Committee
MINUTE(RES)
03/19/01 0716 (S) RES RPT 6DP
03/19/01 0716 (S) DP: TORGERSON, TAYLOR,
PEARCE, KELLY,
03/19/01 0716 (S) ELTON, HALFORD
03/19/01 0716 (S) FN1: ZERO(S.RES)
03/27/01 (S) RLS AT 10:45 AM FAHRENKAMP
203
03/29/01 0858 (S) RULES TO CAL W/CS 2OR 3/29
SAME TITLE
03/29/01 0858 (S) FN1: ZERO(S.RES)
03/29/01 0864 (S) READ THE SECOND TIME
03/29/01 0864 (S) RLS CS ADOPTED UNAN CONSENT
03/29/01 0864 (S) ADVANCED TO THIRD READING
UNAN CONSENT
03/29/01 0864 (S) READ THE THIRD TIME CSSJR
15(RLS)
03/29/01 0865 (S) PASSED Y19 N- A1
03/29/01 0867 (S) TRANSMITTED TO (H)
03/29/01 0867 (S) VERSION: CSSJR 15(RLS)
03/30/01 0781 (H) READ THE FIRST TIME -
REFERRALS
03/30/01 0781 (H) FSH
03/30/01 0794 (H) CROSS SPONSOR(S): WILSON
04/09/01 0912 (H) CROSS SPONSOR(S): CHENAULT
04/09/01 (H) FSH AT 5:00 PM CAPITOL 124
BILL: SJR 15
WITNESS REGISTER
IAN FISK, Staff
to Senator Alan Austerman
Alaska State Legislature
Capitol Building, Room 417
Juneau, Alaska 99801
POSITION STATEMENT: Presented sponsor statement for SJR 15.
JERRY MCCUNE
United Fishermen of Alaska (UFA)
211 Fourth Street, Suite 110
Juneau, Alaska 99801
POSITION STATEMENT: Testified in support of SJR 15.
EDWARD FURMAN, Cordova Fisherman
PO Box 2361
Cordova, Alaska 99574
POSITION STATEMENT: Testified during the hearing on SJR 15 on
the price of gas, and protecting the rights of fishermen.
ACTION NARRATIVE
TAPE 01-17, SIDE A
Number 0001
CO-CHAIR PEGGY WILSON called the House Special Committee on
Fisheries meeting to order at 5:10 p.m. Representatives Scalzi,
Dyson, Coghill, Kerttula, Stevens, and Wilson were present at
the call to order. Representative Kapsner arrived as the
meeting was in progress.
SJR 15-CHILEAN FARMED SALMON
CO-CHAIR WILSON announced that the first order of business would
be CS FOR SENATE JOINT RESOLUTION NO. 15(RLS), "Relating to
imports of salmon from Chile."
Number 0087
IAN FISK, Staff to Senator Alan Austerman, Alaska State
Legislature, read the following sponsor statement on behalf of
Senator Austerman:
The U.S. Government is in the process of negotiating a
free trade agreement with Chile. Meanwhile,
exponential increases of Chilean farmed fish are
flooding markets and driving the price of salmon down
to levels that jeopardize Alaska's industry.
This resolution points out that Chilean fish farms are
not competing on an even basis with Alaskan fishermen.
Our laws requiring sustained yield and ecosystem
management mean higher costs of production and a lower
volume of harvest than under the Chilean system.
These factors are making it increasingly difficult for
our fleet to compete in the current market situation.
This resolution urges the U.S. government to impose
import restrictions and increased import tariffs on
Chilean farmed salmon in order to allow Alaskan
fishermen to better access the domestic market.
SJR 15 is the first step Alaska must take to the
massive influx of cheap imports of farmed fish into
the U.S. We in Alaska have made a commitment to our
salmon industry and the communities it has built and
continues to sustain. In the long run this commitment
is going to pay off. But today [we've] got to stand
up and help our industry compete against unfair
foreign competition.
MR. FISK explained that this resolution is "sticking up for our
industry and encouraging the federal government to do what it
can to open the domestic market to our fish so that our
fishermen can do a better job of marketing our fresh salmon."
Number 0235
MR. FISK said there are several ways this can be done. One way
is to apply for relief through an import moratorium under
Section 201 of the Trade Act [of 1974]. This would require the
industry to issue a recovery plan for the end of any import
moratorium. A second way to attack the issue would be to have
an investigation through the International Trade Commission
under the U.S. Department of Commerce, which could continue to
investigate Chilean and Norwegian fish farming industries for
"dumping product into our market." [The International Trade
Commission] has already found companies guilty of selling
products at less than fair value in many other industries. He
went on to say, "There's no reason why we shouldn't ask them to
go to bat for [the] Alaskan salmon industry."
MR. FISK noted a third way to approach this issue is through the
Safeguard Law, which is implemented through the International
Trade Commission as well. This law focuses on "surges of
imports," which certainly have been present in this industry.
He said there has been a 270 percent increase in Chilean
[salmon] imports between 1996-1999, from 12.3 metric tons to
33.3 metric tons. Currently, Chile has 90 percent of the
domestic market [for salmon].
Number 0408
MR. FISK commented that at this point, the [Alaska State]
Legislature's role is to encourage the governor's office and
[U.S.] congressional delegation to cooperate with the United
States Trade Representative (USTR) as negotiations on free trade
agreement continue. He said they are at an early stage in the
negotiations, and the next round takes place in May. He pointed
out the importance in following up with this issue.
Number 0462
REPRESENTATIVE DYSON remarked that he is enthusiastic about
protecting Alaskan's markets, but that "we got to be driven more
than just our own self-interest." He asked Mr. Fisk if he had
any evidence regarding impacts on ecology for Chile [in relation
to salmon imports].
MR. FISK replied that at this time there is no "hard" evidence
for this. But there are an estimated four million farmed fish
that have been released into the wild in Chile, a significant
number that can be used as an arguing point. He said Chile has
also been using antibiotics at a very significant rate, 75 times
the amount that Norwegian fish farmers use. This is not healthy
since these [antibiotics] are being released into pens in lake
environments where fish are being raised. Wild fish are being
subjected to this as well, making them more susceptible to
disease in the long run.
REPRESENTATIVE DYSON asked if there was any evidence that showed
diseases of farmed fish had been transferred to wild stock.
MR. FISK indicated the need to continue to look into this issue.
He said the governor's office intends to use environmental
arguments against farm salmon as one of its strong points in the
negotiations.
Number 0590
REPRESENTATIVE DYSON said he would think so. He referred to
interactions with the Minister of Fish and Oceans in British
Columbia [BC], who had informed him that BC has biologically
inert estuaries in which everything has been killed and all that
remains is feces from farmed fish. There is also hard evidence
that farm fish released in [these estuaries in] BC are spawning,
"which we were told would never happen." He wondered if this
was happening in Chile.
MR. FISK stated that he did not know.
REPRESENTATIVE DYSON asked if there was evidence in Chile
regarding the detriment of the wild stock.
MR. FISK remarked that he did not have this information, but it
is an area that needs to be looked into. He mentioned that he
has heard that diseased fish have been used as fishmeal for
farmed fish [in Chile]. This information is too anecdotal to be
used in negotiations right now, but it needs to be looked into
further. He believes this would be a strong arguing point
especially since there has been a huge problem in Europe
concerning "mad cow disease." He said there has been a lot of
indication that the European market is looking for a healthier
alternative. If "we" can indicate similar things are happening
in the Chilean farmed fish industry, there would be a strong
arguing point. He noted that Representative Dyson's questions
were valid and that more research is needed in order to obtain
specifics on environmental problems in Chile.
REPRESENTATIVE DYSON said, "We don't want to be responsible.
I'm not going to spread the rumor that farmed fish caused
baldness, pimples and impotency, because I don't know there's
any hard evidence to that."
REPRESENTATIVE DYSON stated that he heard that Norwegian and
Chilean fish farming were "profoundly and substantially
subsidized" by the national government. He asked if there was
any evidence of this.
MR. FISK replied that the most profound subsidy comes from the
"lack of regulation that our industry works under that amounts
to money that they get to keep in their pockets."
REPRESENTATIVE DYSON remarked that he would not call this a
subsidy, but that he understands.
MR. FISK commented that he has heard that the state-owned
airline [in Chile] is providing cheaper freight rates [for
salmon imports]. He indicated that this affects costs
significantly in Chile's marketing of fresh boneless filets,
which make up 90 percent of Chile's domestic market. And if
this is true, then Chile has a significant advantage that "we"
do not have.
Number 0833
CO-CHAIR WILSON wondered if Mr. Fisk had heard about problems
with Norwegian farmed fish being ill in the last few days.
MR. FISK remarked that he had not heard about this in the last
few days.
Number 0867
CO-CHAIR STEVENS referred to an UFA article by Casey Woods and
Jonathan Franklin entitled "Against the Tide, Chilean Salmon
Producer Growing Too Fast and Too Loose." The article says that
Chile will become the world's largest salmon producer by the end
of the decade, even bypassing Norway due to the amount they're
producing. This is a "real" concern throughout the industry.
He indicated that the industry is basing these views on whether
subsidies come from the government, such as paying workers
illegal low wages. He said there are many specifics in this
article about how this happens as well as discussion of
[Chileans] overuse of antibiotics to the point of "stuffing
antibiotics into the lakes so that they say the healthy fish are
medicated along with the ill ones." He stated this is scary,
especially because it "probably gets in ... the food stream."
CO-CHAIR STEVENS stated that the report finds that the Chilean
salmon industry uses 75 times more antibiotics per kilo than its
counterparts in Norway, which is a substantial overuse of
antibiotics. He summarized the other main concerns of the
article as there being an issue of illegal payment of wages, the
threat of Chile becoming the largest producer, the question of
whether Chile is supported by its government, and the dumping of
the product. He said, "We need to push ahead on this and [at]
least bring up the issue of unfair competition from foreign
producers."
MR. FISK commented that this would be part of the negotiating
stance that "we" encourage USTR to take. He referred to Co-
Chair Stevens' remarks on the cost of labor in Chile and said
one estimate says the average monthly salary for working on a
Chilean farm is $250 (in U.S. dollars). This gives Chile a
"definite unfair advantage" to cost production in the [United
States]. He noted that the article makes valid arguing points
for the negotiations regarding the assertion that "environmental
damage of their unregulated industry is significant." He said
this area needs to be looked into.
Number 1096
EDWARD FURMAN, Cordova Fisherman, gave the following testimony:
We have a serious problem. The reason why our gas is
so high is because of administration (indisc.) raise
the price of gas so ... Russia and Mexico could pay
off their debt. It's the rich getting rich and the
poor getting poor. The rich practice the control of
these industries, and like this man says, bless his
heart, [we've] got to protect ... the state's rights.
[We've] got to protect our fishermen. That's why I
found fish farms. Thank you very much.
Number 1182
JERRY MCCUNE, United Fishermen of Alaska (UFA), gave the
following testimony:
We support the resolution, and we are going to
probably file petition 201, which is the same thing
that Harley Davidson got against high imports of other
motorcycle scouts, [such as] Haki (ph) and Honda,
until they could get on their feet.....
I got a lot of calls from Bristol Bay today and
Kodiak. There's many ... fishermen [who] are looking
to go to the domestic market for various reasons
because Japan's economy is really bad right now, plus
there seems to be more money into the domestic market
in that you have to keep your quality up. But what's
really hurting us with Chile fish is they're producing
... [a] boneless filet [in] which they pick the bones
out by hand, which we cannot compete with their labor
costs.
So, we're asking for a five-year window to be able to
get our products into the domestic market more. Try
to have ASMI [Alaska Seafood Marketing Institute]
write a domestic marketing plan so that we can
continue to supply those markets. ... Farmers ... on
the East Coast that raise Atlantic salmon tried this
four or five years ago, and they spent a couple
million dollars trying to cut down in the imports of
Chile farmed salmon, and they were unsuccessful. But
what Chile's doing is dragging everybody's price down.
They can produce so low, their labor costs and
transportation costs. They're even dragging down the
other farmers' price. So the price just bottomed out
not too long ago. I think it was at ... $1.75 and it
bounced back up to $2.20. But that's what the problem
is, that they can get their price so low and their
cost is so high.
So we're hoping to get this five-year window so that
we can build our domestic market within that five
years bigger than it is already. Copper River has a
pretty good hold, but there's lots of other areas that
need to get their products and solve their
transportation problems or whatever that may be to get
to the domestic market.
Number 1330
REPRESENTATIVE COGHILL asked if UFA has been in touch with the
congressional delegation in regard to this issue.
MR. MCCUNE replied that the governor along with UFA sent a
letter to the trade commission. The USA (United Salmon
Association) sent a letter as well. He said there has been
response from American fishermen from across the country, due to
e-mail. For example, letters have been sent in from Washington,
Oregon, and California. At this time, a decision has not been
made at the trade commission level, because a petition needs to
be filed.
Number 1387
[There was a motion to adopt CSSJR 15(RLS), but it was already
before the committee.]
REPRESENTATIVE DYSON stated that he had some amendments to add.
He asked if this would slow the process.
MR. FISK said it would somewhat slow it down, but it would be
worth it to discuss the amendments.
REPRESENTATIVE DYSON commented that the bill comes across as
saying "we're just looking out for our own self." He mentioned
that larger issues have come up in discussion concerning what
has been happening in the world market and risks to the Chilean
environment and its wild stock. "It's kind of a judgment call,"
he said. He then asked where this bill goes after moving from
the House Special Committee on Fisheries.
CO-CHAIR STEVENS said the bill goes to the floor.
Number 1457
REPRESENTATIVE DYSON brought attention to the following proposed
amendments to the bill, which would add the following:
Whereas millions of farmed Chilean salmon have escaped
and are competing with the diminishing wild stock
Whereas the Chilean wild stock are endangered by
diseased escaped farmed fish (or potentially)
[These amendments were not adopted during the hearing.]
REPRESENTATIVE DYSON asked if this bill needed to be done
quickly.
MR. FISK replied that "we" are not aiming for a particular date.
However, the next round of the free trade negotiations begins in
May, and it would be beneficial to have this resolution done
before then. At the same time, if Representative Dyson believed
it was necessary to include the amendments, he thought it would
add some strength to the resolution. But these amendments could
also be added through congressional delegation or the governor's
office as they work with USTR in the process.
The committee took a brief at-ease.
Number 1580
CO-CHAIR STEVENS made a motion to move the CSSJR(RLS) from
committee with individual recommendations and the attached zero
fiscal note. There being no objection, CSSJR 15(RLS) moved from
the House Special Committee on Fisheries.
CO-CHAIR WILSON called for an at-ease in order to hear a
presentation on Canadian/British Columbia fisheries policy and
salmon farming by U.S. Consul General Hugo Llorens. [The
minutes for this presentation are found in the 5:32 p.m. cover
sheet for the same date].
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