operations which would minimize possible finanical risks. The proposed approach is to begin by chartering foreign owned vessels to gain operating and technical expertise, and to determine optimal designs for Canadian operations. Once this expertise and experience has been gained, and the economic viability of such vessels has been proven, then we could gradually begin to acquire such new types of fishing vessels. It is considered that investment on such new types of vessels in the order of $150 million over the next decade would provide for a conservative start to the development of these new fisheries. (4) Summary The total investment required to implement the proposed fleet replacement and expansion program over the next ten years is therefore as follows: Replacement of half the inshore fleet_. Replacement of half the offshore wetfish trawler fleet_. New vessels to start replacing foreign fishing effort___ 10-year total_____. Million $260 500 150 1910 1 These cost estimates are based on the assumption that all of the vessels would be built in Canadian yards. In other words, the proposed fleet development program will require investments averaging in the order of $90 million per year over the next decade. MARKETS In the light of projected increases in Canadian landings, it is essential that new markets be found. The declaration of 200 mile fisheries jurisdictions by most coastal states has caused dramatic changes in the world fish trading patterns, some of which are creating opportunities for us while others represent potential problems. Our concern relates primarily to our current dependence on the American market. This market can absorb only a limited increase in Canadian groundfish production. Further to this, there is concern that the American fishing industry may be expanding so as to make the U.S. fish market more self-sufficient in fisheries products. Our optimism in relation to market opportunities is based on the fact that overall world fisheries production will most likely decrease as a result of 200 mile jurisdictions, and that specific opportunities exist within those fishing nations which are being displaced from major fishing grounds. However, access to many of these new markets will require aggressive and innovative approaches. We commend the Canadian fishing industry for their progress in developing coordinated marketing approaches, specifically through their commitment to the establishment of the Canadian Association of Fish Exporters. However, government action is also required to assist industry to develop these new markets. We submit that aggressive efforts should be taken by Canada to reduce tariff and other such barriers to our products. In particular, we feel that the tariff on fishery products entering into countries in Western Europe should be the subject of intense negotiation. Access to many other potentially large markets will require innovative approaches by both industry and government. For example, the Eastern European Countries offer large export opportunities, however, they are faced with shortages of "hard" currency, and in some cases, a surplus of fishing vessels. Cooperative ventures with such countries would benefit both of us, and would provide unique means of market penetration. Other types of joint ventures would be useful for gaining access to complex and unfamiliar markets such as Japan. We feel that the Federal Government must give due consideration to such innovative marketing approaches. FOREIGN ARRANGEMENTS It is our view that the Government of Canada should adopt a receptive attitude towards foreign arrangements where it is clear that these are mutually advantageous to Canada and to the foreign participants. There are now many fisheries stocks within our jurisdiction which we cannot harvest because we lack the necessary technology and markets. Such stocks must now be allocated to foreign countries, and thereby provide no benefits at all to us. The cooperative ventures of most benefit to us now would be interim arrange ments to provide Canada with immediate access to these non-traditional species and areas, through the use of such foreign vessels. When suitable Canadian vessels are acquired, they could then take over the harvesting of these stocks. These arrangements could take many different forms such as chartering or a simple contract for landing fish at an agreed price. In any chartering of vessels, the portion of crew which is Canadian should be rapidly increased each year, commensurate with the experience gained in the operation of such vessels. It is expected that fully Canadian crewing could be achieved in several years. Irrespective of the type of arrangement a "schedule of Canadianization" must be established for the fishery of these stocks. In simple terms, although these arrangements may not provide us with all the potential benefits from these stocks, the alternative is to have no benefits at all. until we acquire the necessary vessels. There are four key benefits to such arrangements. 1. They will provide immediate increase in the volume through our processing plants. The additional employment this will create is especially needed now. The increase in volume will also improve the financial state of our companies, allowing them to upgrade their fleets and other facilities. 2. They will be very useful in opening up new markets. 3. They will provide us with additional control over our stocks, especially in the control of by-catches which are considered to be a major obstacle to the quick regeneration of our traditional stocks. 4. They will allow us to gain experience and technical knowhow in the operation of such freezer vessels, at no financial risk. They will also allow us to evaluate alternative vessel designs, and thereby assist us to determine the best designs for future Canadian vessels of this type. It must be emphasized that the proposed foreign arrangements are relatively short term or interim measures. The long term strategy must be to increase Canadian investment in our industry, so that it can develop to its full potential. It is considered that with Government encouragement in forms such as tax incentives, sufficient Canadian capital could be made available for this purpose. In some cases, controlled foreign investment may be advantageous to Canada for specific reasons which could include gaining access to markets and technology transfer. Foreign investment under such conditions should be given due consideration. CONCLUSION The foregoing refers in some detail to matters of vital concern to the fishing industry, to the overall economy and to the Provincial Governments of Eastern Canada. For consideration purposes, this proposal has focused attention upon the following aspects of the industry: (1) The resource, (2) fleet development, (3) markets, and (4) foreign arrangements. It is intended that the proposal will form the basis for the most serious and conscientious discussions and negotiations, which will allow and encourage meaningful cooperation between the appropriate industry sector, the Government of Canada and the Governments of the Atlantic Provinces, and thereby lead to positive action. With the endorsement resulting from this current initiative, such cooperative action will allow development of the fishing industry for the benefit of Canadians and on a scale which became potential as a result of the new 200 mile zone. It is believed that this proposal sets forth information basic to preparing a comprehensive development action plan for the Atlantic fishing industry. It is also recognized that much work remains to be done on a cooperative basis; however, there does not appear to be any legitimate reason for delaying immediate undertakings in several key directions. We would ask that this submission to be considered in a positive way and, at the very earliest convenient time a response be given which we would expect to include (a) endorsement of the matters in this proposal and (b) your suggestions for actioning matters as appropriate. Senator HATHAWAY. I want to thank both of you for your testimony, as well as other witnesses here, and I want to extend my appreciation to Senator Ribicoff, who allowed me to chair these hearings on this matter and the hearings will recess now, subject to the call of the Chair. Thank you. [Thereupon, at 12:05 p.m., the hearings in the above-entitled matter recessed, to reconvene at the call of the Chair.] [By direction of the chairman, the following communications were made a part of the record:] PREPARED STATEMENT OF SENATOR EDMUND S. MUSKIE Mr. Chairman, the waiver of countervailing duties on Canadian fish products is a demoralizing blow to our domestic fishing industry. This unwelcome action by the Department of the Treasury ignores the fact that Canadian exporters have succesfully penetrated important domestic markets with the aid of critical subsidies from the Canadian government; and it ignores the fact that Canadian fishermen will continue to receive many of these subsidies, such as government supported piers, transportation facilities, and vessel construction programs. Mr. Chairman, this waiver quite simply strengthens Canada's competitive position in our domestic markets and discourages the much needed expansion and modernization of our domestic fishing industry. A recent petition for relief by the National Fishermen Association and the Point Judith Fishermen's Cooperative, which is currently pending before the Treasury, bears witness to the continued effectiveness of the Canadian subsidies. The decision to waive countervailing duties ironically comes at a time when New England fishermen and processors are being told by the Department of Commerce to develop new markets, especially for underutilized species. Maine fishermen tell me that they are ready to compete, but until their government fosters a fair marketplace for their product, they are destined to failure. They are justifiably angered by the contradictory policies of their federal government. They demand, and they are entitled to legitimate relief. If we are to achieve the goals set forth in the Fisheries Conservation and Management Act and if we are to realize the economic benefits of the two-hundred mile limit, we must see that the domestic fishing industry is given a chance to complete fairly in our own markets. Thank you for the opportunity to testify. STATEMENT OF CONGRESSMAN EDWARD P. BEARD OF RHODE ISLAND Mr. Chairman, I want to thank you for this opportunity to enter into the record my views on this most important Resolution. I represent Rhode Island's second congressional district, a district in which the commercial fishing industry has been a vital industry for many years. Yet, in the past decades, Rhode Island fishermen and their New England colleagues have faced enormous competition from State supported fleets from other nations. These foreign fleets vastly depleted the rich fishing grounds off the New England coast. The extension of the United States territorial waters to 200 miles started to alleviate this problem. However, the New England fisherman continues to face a very serious problem. Namely, the need to compete for United States markets with Canadian fishermen who receive direct and indirect subsidies from the Canadian government and certain Provincial governments. The Canadian subsidy program has not been kept a deep dark secret. Americans have known that the program has been going on for years. The program's goal has apparently been to make Canada the major fishing nation in the area. Within the past year, the Treasury Department officially recognized that the subsidy program did indeed exist and that Canadian fish products imported into the United States were subject to countervailing duties equal to the amount of the subsidies. In true bureaucratic fashion, little action was taken by the Department until July 10, 1978, when the Department announced that it would waive the collection of the legally collectable countervailing duties. On what was this decision based? Basically on the Canadian promise to eliminate most of the direct subsidies and on the Treasury Department's fear of offending Canadian trade negotiations at the Multilateral Trade Negotiation in Geneva. Would it not be more prudent, Mr. Chairman, to base our policy on action rather than promises? Might it not be wise to note that the Canadians have said very little about the indirect subsidies? Shouldn't the Treasury Department fear offending United States fishermen at least as much as they fear offending some Canadian negotiations? I am not advocating full fledged protectionism. Senate Resolution 483 does not advocate such protectionism. The resolution merely calls for a countervailing duty to offset the unfair competitive advantage brought about by the Canadian subsidy program. In short, the New England fishermen are simply asking for an equal opportunity to get their products to the marketplace. I can see no reason why our own government should willfully deny them that opportunity. Thus, Mr. Chairman, I fully support Senate Resolution 483 and urge its speedy consideration. DEPARTMENT of Labor, OFFICE OF THE SECRETARY, TA-W-2324; LIBERTY BELLE FISHING CORP., PROVINCETOWN, MASS. CERTIFICATION REGARDING ELIGIBILITY TO APPLY FOR WORKER ADJUSTMENT ASSISTANCE In accordance with Section 223 of the Trade Act of 1974 the Department of Labor herein presents the results of TA-W-2324: investigation regarding certification of eligibilty to apply for worker adjustment assistance as prescribed in Section 222 of the Act. The investigation was initiated on September 8, 1977 in response to a worker petition received on that date which was filed on behalf of workers and former workers engaged in the catching and landing of various types of commercial fish at Liberty Belle Fishing Corporation of Provincetown, Massachusetts. The investigation revealed that Liberty Belle Fishing Corporation owns and operates the fishing vessel F/V Liberty Belle which is engaged in the catching and landing of ground and flatfish. The notice of investigation was published in the Federal Register on October 4, 1977 (42 FR 54031). No public hearing was requested and none was held. The information upon which the determination was made was obtained principally from officials of the Liberty Belle Fishing Corporation and its customers, the U.S. Department of Commerce, the U.S. International Trade Commission, the National Marine Fisheries Service, industry analysts and Department files. In order to make an affirmative determination and issue a certification of eligibility to apply for adjustment assistance, each of the group eligibiilty requirements of Section 222 of the Act must be met. It is concluded that all of the requirements have been met. During the 1973 to 1976 period the average annual level of imports of fresh and frozen groundfish and flatfish: whole; blocks and slabs; and fillets was 654,706 pounds. Imports in 1977 were 696,261 pounds. Imports as a percentage of production increased from 173.4 percent in 1975 to 197.8 percent in 1976 and declined to 187.8 percent in 1977. Cod represented the largest percentage of total Provincetown landings in 1977. Imports of fresh and frozen cod increased from 256,962 pounds in 1975 to 331,044 pounds in 1977. Imports as a percentage of production increased from 379.4 percent in 1975 to 446.5 percent in 1976 and increased to 463.9 percent in 1977. Imports of edible fish products from Canada increased from 438,206 pounds in 1975 to 474,015 pounds in 1976 to 478,470 pounds in 1977. A survey of fish wholesalers served by the Provincetown area indicated that many had decreased purchases of fish from Provincetown. A number of these wholesalers purchased imported Canadian ground and flatfish either directly or indirectly in 1977. The wholesalers also indicated that decreasing purchases from Provincetown were in large measure due to the increased purchases of fresh and frozen Canadian fish by their customers--fishmarkets, supermarkets, and restaurants. The Department's investigation revealed that many fish distributors and wholesalers use the imports of Canadian ground and flatfish leverage in bidding down the exvessel prices paid to domestic fishermen for the same species of ground and flatfish. CONCLUSIONS After careful review of the facts obtained in the investigation, it is concluded that increases of imports like or directly competitive with the ground and flatfish caught and landed by the F/V Liberty Belle owned by Liberty Belle Fishing Corporation of Provincetown, Massachusetts contributed importantly to the decrease in production and to the separation of workers from that firm. In accordance with the provisions of the Act, I make the following certification : "All workers of Liberty Belle Fishing Corporation of Provincetown, Massachusetts who became totally or partially separated from employment on or after August 27, 1976 are eligible to apply for adjustment assistance under Title II Chapter 2 of the Trade Act of 1974." Signed at Washington, D.C., this 2d day of June 1978. JAMES F. TAYLOR, DEPARTMENT OF LABOR, OFFICE OF THE SECRETARY, TA-W-2395; F/V SHIRLEY AND ROLAND, PROVINCETOWN, MASS. CERTIFICATION REGARDING ELIGIBILITY TO APPLY FOR WORKER ADJUSTMENT ASSISTANCE In accordance with Section 223 of the Trade Act of 1974 the Department of Labor herein presents the results of TA-W-2395: investigation regarding certification of eligibility to apply for worker adjustment assistance as prescribed in Section 222 of the Act. The investigation was initiated on September 23, 1977 in response to a worker petition received on September 23, 1977, which was filed on behalf of workers and former workers engaged in the catching and landing of ground and flatfish abroad the F/V Shirley and Roland of Provincetown, Massachusetts. The notice of investigation was published in the Federal Register on October 14, 1977 (42 FR 55316). No public hearing was requested and none was held. The information upon which the determination was made was obtained principally from officials of the F/V Shirley and Roland, its customers, the U.S. Department of Commerce, the U.S. International Trade Commission, the National Marine Fisheries Service, industry analysts and Department files. In order to make an affirmative determination and issue a certification of eligibility to apply for adjustment assistance, each of the group eligibility requirements of Section 222 of the Act must be met. It is concluded that all of the requirements have been met. During the 1973 to 1976 period the average annual level of imports of fresh and frozen groundfish and flatfish: whole; blocks and slabs; and fillets was 654,706 pounds. Imports in 1977 were 696,261 pounds. Imports as a percentage of production increased from 173.4 percent in 1975 to 197.8 percent in 1976 and declined to 187.8 percent in 1977. Cod represented the largest percentage of total Provincetown landings in 1977. Imports of fresh and frozen cod increased from 256,962 pounds in 1975 to 331,044 pounds in 1977. Imports as a percentage of production increased from 379.4 percent in 1975 to 446.5 percent in 1976 and increased to 463.9 percent in 1977. Imports of edible fish products from Canada increased from 438,206 pounds in 1975 to 474,015 pounds in 1976 to 478,470 pounds in 1977. A survey of fish wholesalers served by the Provincetown area indicated that many had decreased purchases of fish from Provincetown. A number of these wholesalers purchased imported Canadian ground and flatfish either directly or indirectly in 1977. The wholesalers also indicated that decreasing purchases from Provincetown were in large measure due to the increased purchases of fresh and frozen Canadian fish by their customers-fishmarkets, supermarkets, and restaurants. The Department's investigation revealed that many fish distributors and wholesalers use the imports of Canadian ground and flatfish as leverage in bidding down the exvessel prices paid to domestic fishermen for the same species of ground and flatfish. CONCLUSION After careful review of the facts obtained in the investigation, it is concluded that increases of imports like or directly competitive with the ground and flatfish caught and landed by the F/V Shirley and Roland of Provincetown, Massachusetts contributed importantly to the decrease in sales and production |