Reduction of Foreign Competition 
Competition from foreign fishing operations in- 
volves two components: competition over the stocks 
within a particular fishery and competition from im- 
ports. The Fishery Conservation and Management 
Act of 1976 gives domestic fishing operations pre- 
ferential rights to harvest the stocks within the U.S. 
fishery conservation zone. While foreign catches in 
the conservation zone have been on the decline since 
1972, implementation of the Fishery Conservation 
and Management Act further reduced foreign harv- 
ests in the zone. 
A February 1978 NMFS draft report ** proposed 
further reductions of foreign fishing activities in the 
conservation zone and subsequent replacement by 
U.S. vessels and crews. In this way NMFS estimates 
that U.S. fishing fleets could harvest 2.1 million 
tonnes of fish that were allocated to foreign opera- 
tions. If this change were to occur, it would nearly 
double the present domestic landings, which have 
ranged from 2 to 2.5 billion pounds annually. It is 
expected that much of these landings will be of 
stocks that are not popular in the United States and 
will be exported to foreign markets. Such a change 
could help reduce the trade deficit in fish, which was 
$1.4 billion in 1974.* 
A less drastic recommendation came from the 
General Accounting Office. It suggested that, because 
many other governments have instituted an extended 
fishing zone of their own which will affect the pro- 
ductivity of the U.S. vessels fishing in their waters, 
the United States should enter into reciprocal agree- 
ments with such countries desiring to-fish within the 
conservation zone. The establishment of foreign fish- 
ing allocations is a first step toward reducing the 
competition from foreign fleets. 
_ The other impact of foreign operations that affects 
the health of the domestic industry comes from im- 
ports. Title II of the Trade Act of 1974 designates 
the Department of Commerce’s Industry and Trade 
Administration to provide direct loans as well as 
guaranteed and insured loans and to disseminate 
relevant technical information to firms seriously in- 
jured or threatened by imports that result from trade 
agreement concessions. 
The Pacific Coast oyster industry has been jeopard- 
ized by imports and illustrates the problem in this 
area. According to the General Accounting Office, 
Korean imports of canned, smoked, steamed, boiled, 
and frozen oysters increased 60 percent from 1972 
to 1973. There was a fear that imports of canned 
products alone under a bilateral agreement with the 
Republic of Korea could lead to the downfall of the 
domestic industry along the Pacific Coast.*° 
“U.S. Department of Commerce, op. cit. note 15. 
“U.S. Comptroller General, op. cit. note 4. 
°° Ibid. 
A number of species such as Alaska pollock are 
caught by foreign fleets in the U.S. Fishery Con- 
servation Zone and subsequently imported by the 
United States, either fresh or frozen. Imports would 
certainly be reduced if domestic fleets landed the 
stocks that foreign fleets now harvest from domestic 
waters, yet it is not clear that this would be an eco- 
nomical move. These species are not always the ones 
landed by present domestic fleets—therefore, the situ- 
ation could call for new boat techniques and process- 
ing plants—all requiring major capital investment. 
This in turn, could mean higher prices to the U.S. 
consumer. 
Competition from imports is another issue. It is 
possible for foreign imports to underprice domestic 
products for several reasons, of which the principal 
are: 
e less expensive labor, 
® low overhead, and 
®@ government subsidization. 
These elements of foreign trade are not unique to 
the fishing industry, but there are aspects peculiar to 
fisheries. U.S. law requires that before a vessel can 
engage in coastwide trade or fisheries of the United 
States, it must be under the U.S. flag and must have 
been constructed in the United States. For a few 
fisheries, such as tuna and shrimp, U.S.-built ships 
are preferred over all others. Because U.S.-built 
ships are often considerably more expensive, as much 
as 30 percent higher, than those built elsewhere, the 
high overhead cost for the vessel increases the price 
of the product at the market.*! While the gap between 
the cost of foreign- and domestic-built boats has been 
closing recently, the construction of larger, more ex- 
pensive vessels to harvest deepwater bottomfish could 
cause this issue to intensify. In contrast, U.S.-built 
shrimp vessels are exported widely. 
Because of the expense of new fishing boats and 
the small size of most fishing operations, there is a 
general reluctance to make major investments unless 
they are absolutely necessary. As a result, the fleet 
has a large number of old boats. In 1974, Coast 
Guard records showed the average age of fishing 
boats was nearly 22 years.”? Older boats have a diffi- 
cult time competing with newer, more efficient boats 
of foreign fleets. 
Domestic fleets pay more for fishing gear than their 
foreign counterparts. The import duty on nets and 
netting materials is nearly 50 percent. Whereas this 
serves as an effective deterrent to U.S. purchase of 
foreign nets, it also serves to raise artificially the price 
of the domestic nets. There is some irony in elements 
of the fishing industry who want controls on imports 
* Tbid. 
© Ibid. 
III—32 
