Why Maine lobster fishermen are using Canada to escape the tariff trap

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Maine lobster fishermen using Canada to thwart tariff trap
Canada's most lucrative seafood has become even more attractive overseas, thanks to U.S. President Donald Trump's trade war with China. And as Ross Lord reports, lobster harvesters in the Maritimes are likely to reap the benefits – Dec 5, 2018

At a time when million-dollar boats are becoming commonplace in the Nova Scotia lobster fishery, there’s more pressure than ever to catch enough lobsters to justify the investment.

For fisherman Darrell Countway Jr., of West Dover, N.S., bringing back thousands of pounds in a single day is only part of a winning formula.

“Our hopes for the season is that there’s gonna be a good demand for our lobsters. The price will really help us out on determining if it’s gonna make it a good season for us or not.”

READ MORE: Lucrative lobster season opens off N.S.

There’s optimism, and it comes from an unlikely source: U.S. President Donald Trump, who has unintentionally done Canadian lobster harvesters a huge favour.

Trump’s trade war with China provoked Beijing into imposing a 25 per cent tariff on U.S. imports — including live lobsters.

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“We’ve seen the U.S. lobster shut out of China, and Canadian lobster in much more demand,” says Geoff Irvine of the Halifax-based Lobster Council of Canada. “We will have a record year for live sales and volume.”

READ MORE: East Coast celebrates holiday season with Christmas trees fashioned out of lobster traps

But when China slammed the door on American lobsters over the summer, some were still crawling through —because Maine found a workaround. Maine lobsters were shipped to Canada, packaged as Canadian products, then flown overseas to China.

It’s almost impossible to tell the difference. Both countries fish the same species of lobster, though Nova Scotia fishermen claim theirs have more meat.

Lobster marketers are reluctant to discuss the scheme, but industry sources confirm it to Global News.

A statement from the Canadian Food Inspection Agency, which regulates food exports, suggests the end-run was short-lived.

The CFIA says it regularly conducts “export certification control program audits on lobster licence holders and registered establishments,” and “so far has found no evidence of mislabeling on shipments of live lobster going to China.”

The CFIA says if non-compliance is observed, “appropriate regulatory action” will be taken.

READ MORE: How Donald Trump helped boost Nova Scotia’s lucrative lobster industry

Most Canadian lobster is still sold to Americans — half a billion dollars worth each year.

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But, China has become a prime destination. Five years ago, the Chinese market was worth $36 million. By last year, the value had multiplied five-fold, topping $174 million.

This year, exports were close to another historic high, well before this week’s opening of Canada’s largest lobster season, in Southwest Nova Scotia.

Rising revenue means a bigger payoff for Canadian fishermen and women bobbing on the treacherous ocean, from dawn to dusk. It also helps offset shrinking tax bases in struggling small towns in the Maritimes.

WATCH BELOW: U.S. and China agree to temporary trade war truce

Click to play video: 'G20 summit: U.S. and China agree to temporary trade war truce'
G20 summit: U.S. and China agree to temporary trade war truce

But Irvine says no-one is taking this good fortune for granted. “The challenge with the president is he can change his mind very quickly.”

In fact, at this week’s G20 summit in Argentina, Trump and the Chinese president agreed to a temporary tariff truce.

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However, the Maine lobster industry says it’s still on the outside, looking in, and that ensures Canada’s advantage will continue, for now.

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