European Union ends lobster tariff, 'levels the playing field' for Maine's industry

Photo / Laurie Schreiber Coastal communities rely on the lobstering industry, which could get a boost from the elimination of the European Union's tariff.

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By Staff

Maine's lobstering industry got a boost Friday when the European Union announced it will end tariffs on imports of U.S. lobster, retroactive to Aug. 1.

“The elimination of the EU tariff on U.S. lobster products is a significant achievement for our industry,” Maine Lobster Dealers’ Association Executive Director Annie Tselikis said in a news release. ”The EU was historically an essential market for Maine lobster, but we have been facing challenges in that market since 2017 due to preferential treatment of Canadian lobsters. This move levels the playing field for Maine lobster companies and will benefit the entire industry.”

U.S. exports of those products to the EU were over $111 million in 2017.

Unlike Canadians, American exporters faced tariffs of 8% for live lobster and up to 30% for frozen lobster products to sell into the confederation of over two dozen European countries.

In a subsequent Facebook post, Tselikis noted the association had worked on eliminating the tariff since it was imposed nearly three years ago.

“Hard work pays off,” she wrote. “The removal of the tariffs on U.S. lobsters exported to the EU is a big damned deal.”

Under a new agreement negotiated by U.S. Trade Representative Robert Lighthizer and European Union Trade Commissioner Phil Hogan, the EU will eliminate tariffs on imports of U.S. live and frozen lobster products, according to a statement from the office of the U.S. Trade Representative.

The EU will eliminate the tariffs on a Most Favored Nation basis, retroactive to begin Aug. 1. The tariffs will be eliminated for a period of five years and the European Commission was expected to promptly initiate procedures aimed at making the tariff changes permanent.

In exchange, the U.S. agreed to reduce by 50% its tariff rates on certain products exported by the EU worth an average annual trade value of $160 million, including certain prepared meals, certain crystal glassware, surface preparations, propellant powders, cigarette lighters and lighter parts. The U.S. tariff reductions will also be made on an Most Favored Nation basis and retroactive to begin Aug. 1.

U.S. Sen. Angus King, I-Maine, and U.S. Reps. Chellie Pingree, D-Maine 1st District, and Jared Golden, D-Maine 2nd District, hailed the agreement, which comes after years of tariffs in both the EU and China have imposed severe economic challenges for Maine’s lobster industry.

“The removal of these tariffs will give Maine’s lobstermen, dealers, and processors a level playing field with their Canadian competitors, and restore a key market that brings millions of dollars of economic activity into our state,” the congressional members said in a joint statement. “There’s much more work to be done to protect Maine’s lobster industry and the coastal communities that rely on it, but this is a solid development.”

Last November, King and Pingree, along with U.S. Sen. Susan Collins, R-Maine, urged the U.S. Trade Representative to prioritize a deal with the EU to eliminate the lobster tariffs, arguing that it put the Maine lobster industry at a significant competitive disadvantage compared to its Canadian competitor, which enjoys tariff-free access to the EU market under the Comprehensive Economic and Trade Agreement.

Several years ago, the European Union was a top destination for American lobster, accounting for approximately 15% to 20% of annual lobster exports. In 2017, the Comprehensive Economic and Trade Agreement was implemented between Canada and the European Union, reducing tariffs to zero on live Canadian lobsters and eliminating tariffs over a period of several years on frozen and processed Canadian lobsters.

Roughly 80% of American lobster is harvested in Maine. The state’s lobster catch was worth $485 million in 2019.

The lobster industry has also been swept up in an ongoing trade war with China. Live lobster exports to China dropped by 64% in the first month after the country imposed its own retaliatory tariffs.

In 2018, President Donald Trump placed a 25% tariff on up to $50 billion worth of Chinese goods. In turn, China imposed a 25% tariff on a host of imported U.S. products, including lobsters.

Previously, China had become the second-largest importer of Maine lobster. During 2017 — the last full year before the tariffs went into effect — Chinese customers purchased $128.5 million of lobsters from Maine.