So let's get started. First we're going to hear from the Louisiana Department of Agriculture and Mr. Roy Johnson.

MR. JOHNSON: Thank you very much. Thank you for inviting the Louisiana Department of Agriculture and Forestry to this listening session. Commissioner Bob Odom sends his best regards and regrets that he can't be here with us today.

My name is Roy Johnson and I serve as the marketing director and international director, trade director, of the Louisiana Department of Agriculture and Forestry. A portion of my responsibility is monitoring and evaluating the imports of ag products into the U.S., especially those that are indigenous to Louisiana.

I am here today to voice our serious concerns on one provision of the U.S. Anti-dumping Law, Title VII of the Tariff Act of 1930. Specifically, we're concerned about 19 U.S.C., 1675 (a)(2)(B), or the "new shipper review" portion. This provision was included in the Uruguay Round agreement, and accordingly, Title VII was amended. Subsequently, U.S. Department of Commerce promulgated regulations (19 CFR, subsection 351.214) that established procedures for a new foreign exporter or producer to apply for a separate duty for a product from a country already under antidumping orders.

New shipper reviews are to be made on the basis of an application from an exporter or producer that was not exporting the sanctioned product during the antidumping petition period of investigation. Frequently, a single shipment is used for the basis of this review. The review is supposed to consider a commercially viable shipment made to the U.S. by the new shipper after the antidumping duty order became effective. The import price of this one shipment is then used by U.S. Department of Commerce to determine the dumping margin for this new exporter.

When commerce considers -- considered comments on its proposed regulations to implement the new shipper review provision, commenters requested some method to determine if this one shipment was a bona fide sale. The commenters were concerned about, and I quote from the Federal Register, "new shippers conspiring with an unaffiliated U.S. customer to engage in a single transaction at a high price that would generate a dumping margin and deposit and assessment rates of zero." Commerce decided not to adopt any safeguards for this procedure, believing that, and I quote again, "the statutory and regulatory schemes provide adequate safeguards against such manipulation," end quotes. Please let me tell you how these safeguards have not proved adequate and why this regulation is referred to as the "antidumping loophole."

In the early 1990s, our department in Louisiana started monitoring the imports of peeled crawfish tail meat from China. The import started as a small trickle but increased rapidly to a catastrophic flood. Imports of crawfish tail meat from China rose from 600,000 pounds in 1993 to over 10 million pounds in 1995, just two years.

In 1996, the Louisiana Crawfish Processors Alliance, a group of U.S. crawfish producers, with the assistance of Commissioner Odom and the Louisiana Department of Agriculture filed an antidumping petition with the U.S. Trade Commission and the U.S. Department of Commerce. The funding of this petition process was made possible by an appropriation from the Louisiana Legislature and from industry funds.

Subsequent to the investigation request in this petition, crawfish tail meat imported from China was found to have caused injury to the U.S. industry. In 199 -- in September 1997, the U.S. Department of Commerce issued an antidumping order on crawfish tail meat imported from China. The extent of the dumping was so great that the duty rates announced were from a low of 91-and-a-half percent to over 201 percent.

In 1998, a new shipper of crawfish tail meat from China filed a request for a separate duty under the provisions of law and regulations mentioned above. The request was made based on one small shipment made during this shipper's period of investigation. Based on the artificial price of that one shipment, Commerce granted the new shipper a zero duty rate on May 24th, 1999. This is exactly what the commenters had predicted in May of 1997.

How did a new shipper go from the weighted average of the duty in the original antidumping order of 123 percent, for those producers or exporters who cooperated with Commerce in their investigation to zero? Are those costs of production to this new shipper so much different?

No. The difference between 123 percent and zero is the declared value of that of a small shipment and how that value affects the formula used by U.S. Department of Commerce. Nothing changed except the high exaggerated non-commercially viable import price. Sources in the industry tell us that crawfish tail meat is now being offered by this exporter at prices much lower than the import price used in his public submissions to Commerce.

We are now facing three more new shipper requests. The preliminary duty in these companies are due out later this month; we are conditioned to expect more bad news from these new shipper requests. They have learned their tricks well, and what is to prevent them from using these same tactics?

This loophole in the antidumping law must be closed. The demands on the U.S. industry to fight each new shipper in a separate administrative proceeding are exceedingly burdensome. Our state has been forced to fund the original petition and opposition to each new shipper, and then again fund our participation in the annual review which also includes these same new shippers. This doubles our costs in trying to maintain the viability of and industry which is so important to the economy and social fabric of our state.

Something must be done to ensure that exports, slash, producers are not based -- are not basing their application on fiction. New shippers should be granted, upon application, the preferred weighted-average duty given to those exporters who agreed to cooperate with commerce, but whose facilities were not chosen for investigation. Then the new shippers could be automatically included in the next administrative review.

I realize that procedures for new shipper reviews are based on commitments made in the Uruguay Round, but you should realize, as you prepare for Seattle, that those procedures are not working and are detrimental to the purposes of the antidumping law. I offer the assistance of myself, our department, to further clarify and describe our experiences with the Title VII Anti-dumpting Petition involving an agricultural product against a non-market economy.

Thank you very much for your attention.

MR. PURCELL: Questions?

MR. ACETO: Actually, I have a question, Mr. Johnson. Are you aware of this being a problem with other products or in other states? Have you heard from other state agriculture departments as to whether this is an extensive --

MR. JOHNSON: No, I haven't. This zero duty came out last month -- well, it came out in May.

MR. ACETO: But I mean the general problem of sending in -- what you're saying is kind of a one shipment to get a margin and then coming in after. Are you aware that this is a problem in other --

MR. JOHNSON: I don't know that this has ever been used before in agriculture. It has been used in other products, and the attorneys in the Beltway are very familiar with it, especially those who are specializing in international trade. As far as I know, this may be the first time this (inaudible).

MR. ACETO: Thank you.