San Diego Union-Tribune

November 17, 2001

Business Front

San Diego-based tuna companies lobby to keep tariff on imports

By Toby Eckert 
COPLEY NEWS SERVICE 

WASHINGTON -- San Diego's tuna titans are fighting a move to lift a tariff on tuna imports from South America.

Bumble Bee Seafoods, Chicken of the Sea International and
major tuna boat owners -- all based in San Diego -- argue that the move would devastate the domestic canned tuna industry.

But they're not getting any help from Charlie the Tuna.
Pittsburgh-based StarKist -- whose parent company, H.J. Heinz, has South American operations -- supports eliminating the tariff.

The obscure tussle has erupted over the Andean Trade
Preference Act, a 1991 law that eliminated duties on a host of products made in Ecuador, Colombia, Bolivia and Peru, where the United States is trying to encourage economic alternatives to the illicit drug trade. The act is up for renewal this year, and the countries have lobbied to add more products, including canned tuna.

The House yesterday approved the legislation, including the
tuna provision. But Rep. Randy "Duke" Cunningham,
R-Escondido, won a pledge from House leaders to address the concerns of the domestic tuna industry when House and Senate negotiators meet to discuss the bill.

While the San Diego area is no longer a blue-collar hub of tuna fishing or production -- most of that work is now done in the U.S. territories of American Samoa and Puerto Rico -- it remains an important management center for the industry. Bumble Bee also operates a facility in Santa Fe Springs, near Los Angeles, that employs 300.

Bumble Bee, Chicken of the Sea and fleet owners say they will be forced to make deep cuts in their operations in the U.S. territories and California if the 11 percent duty on canned tuna from South America is eliminated.

Ecuador and Colombia are aggressive competitors that would flood the U.S. market with cheap canned tuna, the companies say.

"It would basically result in the demise of U.S. tuna," said Bumble Bee President and Chief Operating Officer Chris Lischewski. "It would cause canned tuna to become a foreign-controlled industry."

The move would also harm the economies in the U.S. territories, Lischewski said, especially American Samoa. Delegate Eni F.H. Faleomavaega, American Samoa's non-voting representative in the House, said 85 percent of private-sector jobs in the territory are tied to the tuna industry.

Wages for tuna-industry workers in South America are lower
than in the U.S. territories and "nickels and dimes a case make a difference," said Don George, senior vice president at Chicken of the Sea.

But proponents of ending the tariff say there is plenty of room in the tuna market for more competition.

"Including tuna in this bill will not adversely affect the job
situation in the United States," said Rep. Phil English, R-Pa.

StarKist supports the measure because its parent company,
Heinz, is "a global food company with operations in over 50
countries (and) tries to support free trade legislation, which this is," said Heinz spokesman Michael Mullen.

StarKist also buys some tuna from Ecuador, he said.

Cunningham tried without success to amend the legislation to continue the tuna tariff.

But Rep. Bill Thomas, the chairman of the powerful House Ways and Means Committee and a co-sponsor of the bill, offered "to make adjustments so that the gentleman will have at least a minimal comfort level."

"We are willing to look at limitations on volume, quota or
consumption, whichever is the most appropriate structure," said Thomas, R-Bakersfield.

Unless some deal is worked out in negotiations with the Senate, which is considering similar legislation, "my friends from American Samoa, from Puerto Rico and from California, we will be forced to vote against" the legislation, Cunningham said.