Business
American Samoa's Tuna Cannery Worries
Untangling tangled nets
According to a 1954 U.S. Congressional House Report, "from January through April 1954, Van Camp Co. and the Tokyo Marine Products Corp., with whom the former had entered into a contract, carried out in American Samoa the first joint American-Japanese venture in the history of Central Pacific tuna fishing. A fleet of seven long-line boats, manned by Japanese fishermen, based in Pago Pago, with logistical support of two American freezer ships, fished in a several hundred mile radius of American Samoa."
In 1954, over 200 tons of fish were processed and another 400 tons of frozen fish were sent to the United States. The report concluded that, "the results indicate that a continuing and expanding tuna fishery in American Samoa is a distinct possibility, providing certain basic problems of supply and organization are met and solved."
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Now, 49 years later, American Samoa is home to the largest tuna cannery in the world and, since 1975 Chicken of the Sea and StarKist have exported billions of dollars worth of canned tuna from American Samoa to the United States. But our history with the industry has been tangled and our future is in dispute.
Only last year, American Samoa faced one of its most critical hours as a result of aggressive efforts by the H.J. Heinz Co., and its then subsidiary StarKist Seafoods, to include canned tuna in the Andean Trade Preference Act (ATPA). As part of the act, and in an effort to curb drug production in Latin America, the United States agreed to provide preferential, mostly duty-free treatment to certain products exported to the United States from Bolivia, Colombia, Ecuador and Peru. Had StarKist been successful in its effort to include canned tuna under the provisions of the ATPA, American Samoa would have faced massive unemployment and insurmountable financial difficulties.
In brief, the economy of American Samoa is more than 85 percent dependent either directly or indirectly on the United States tuna and fishing processing industries. Two canneries, Chicken of the Sea and StarKist, employ more than 5150 people or 74 percent of the workforce. American Samoa processes about 950 tons of tuna per day‹equivalent to 22,800 tons of tuna or 20.5 million cases per year.
On the other hand, the Andean Pact countries control more than 35 percent of the catch in the Eastern Pacific Tropic and, in the past 10 years, the Andean tuna fishing fleet has also grown from about 20 to 90 fishing vessels. Ecuador and Colombia now have the capacity to jointly process 2250 tons of tuna per day, which is equivalent to 540,000 tons of tuna or 48.6 million cases per year.
Given the fact that the United States only consumes 48 million cases per year, the Andean countries have the production capacity to supply the entire United States market and wipe out the economy of American Samoa. Added to this is the fact that labour rates for cannery workers are US$0.69 per hour and less in the Andean countries, and US$3.60 per hour in American Samoa.
Given this disparity in wage rates, I do not believe now and I did not believe then that StarKist's interest in the ATPA was to curb drug production in the Andean countries. More likely, I believe StarKist fought the matter for one reason and one reason only‹to displace US$3.60 workers in American Samoa and exploit US$0.60 labor in Ecuador.
I do not believe this is what free trade should be about and I am pleased that my colleagues agreed with me on this point and excluded canned tuna from ATPA. Parenthetically, I am also pleased that StarKist has since changed ownership and I am hopeful that our new corporate partner, Del Monte Foods, will work with us to rebuild the heap of stones that has collapsed. E ta'ape a fatuati, or the collapse of the heap of stones, is a Samoan proverb, which refers to the practice of setting up a heap of stones under the water to attract fish. Sometimes the structure, or heap, collapses as a result of deliberate acts or accidental causes. Either way, when the heap collapses, the fishermen will come to rebuild it for the good of the community. This is solely dependent on the fishing industry.
For more than forty-five years, American Samoa's economy has been dependent on a tariff structure, which is much like a heap of stones used to attract and protect investment in the American territory. The tariff structure provides duty-free treatment for canned tuna entering the United States from American Samoa. The structure also assesses a duty of 12 percent on average to canned tuna entering the United States from foreign countries. Without this 12 percent protection, American Samoa cannot compete against low wage rates of US$0.60 and less per hour.
Neither can American Samoa compete in the global market when Ecuador, thanks to StarKist, can now send tuna packaged in foil to the United States without duty or tariff. But the United States, including American Samoa, must pay a duty rate of 20 percent or more to export canned tuna to Ecuador.
As a result of Heinz's albeit unsuccessful efforts to collapse tariff rates for canned tuna, I am concerned that American Samoa's canneries are at risk.
Whether by a deliberate act or an accidental cause, the 12 percent tariff rate that foreign countries once paid to export canned tuna to the United States is now in question.
Although I am pleased that Chicken of the Sea, Bumble Bee, and the United States tuna boat owners stood in support of American Samoa, Heinz has left American Samoa and the United States tuna industry vulnerable to other trade initiatives now being put forward to provide duty-free treatment for canned tuna originating from ASEAN nations and Central American countries.
Heinz's aggressive efforts to exploit labour while paying its own executives more than US$65 million a year also divided the United States tuna industry which historically has stood united against unfair trade practices and foreign competition.
Given the uncertainty of American Samoa's canned tuna industry, I am again reminded of a Samoan proverb - O le upega e fili i le po ae talatala i le ao‹which means that the net that became entangled at night will be disentangled in the morning.
It has been almost a year since American Samoa won its hard-fought struggle to save its canned tuna industry. It has been less than a year since Del Monte assumed the StarKist label.
Now that the night has settled and the morning has come, I am hopeful that the net will be disentangled and StarKist will join in protecting American Samoa's economy. To this end, I support business and the need for business to make a reasonable profit.
But to paraphrase President Franklin D. Roosevelt, I will not let calamity-howling executives tell me that wage increases will have a disastrous effect on the United States tuna industry.
With the ATPA behind us, I believe the time has come to revisit the issue of wage increases for cannery workers in American Samoa and abroad. I believe this is what fair trade demands and I am hopeful that this is what men and women of conscience will thoughtfully consider.
Congressman Eni F.H. Faleomavaega is the ranking member of the U.S. House International Relations Subcommittee on Asia and the Pacific. The U.S. Department of Labour will hold hearings in American Samoa next month on the minimum wage issue.
