May 2, 2023
Fishers crabby over Japan's Russian imports, but Tokyo says Canada exports negligible
The Canadian Press,
The TINA trade is gone everywhere except in Japan: WisdomTree’s Jeff Weniger
Atlantic fishers are feeling the pinch as Japan brings in cheap Russian product rather than Canadian snow crabs, with federal ministers and provincial premiers saying they are raising the issue with Japanese officials.
But Tokyo is pushing back on claims that its trade decisions are undermining G7 sanctions — or that they are having much of an effect on the Canadian industry.
Snow crab prices have dropped in Newfoundland and Labrador from $7.60 per pound at the start of last year's season to an opening price of $2.20 this year.
Fishers in the province have refused to start harvesting this year as they scramble to sell off last year's surplus, although the price could still rise.
Analysts say crab is a lucrative species for Atlantic Canada, and it was the country's second-largest seafood export in 2021. Market prices hit record highs during the peak of the COVID-19 pandemic, but began plummeting last year.
The United States blocked sales from Russia to punish the country for its February 2022 invasion of Ukraine, and its own Alaska crab fishery collapsed, making Washington reliant on Canada.
But American customers have opted against pricey Canadian crab during a period of inflated food prices, leaving unsold roughly 10 million pounds of Canadian crab that was caught last year.
Meanwhile, Moscow has flooded other parts of the international market with cheap product.
South Korea and Japan are still allowing such imports, and the latter has become the target of an influence campaign by Canadian politicians.
Japanese trade magazine Toyo Keizai reported that as of last October, Japan had increased its imports of all forms of Russian crab by 50 per cent compared with the same period the year before that.
Conservative fisheries critic Clifford Small has raised the issue in Parliament in recent months, saying Ottawa should press Japan to ban Russian crab as a measure of solidarity among G7 countries.
His home province of Newfoundland and Labrador says snow crab exports accounted for $886 million in sales in 2021, but the price crash has now left fishers trying to sell last year’s catch.
A week ago, Trade Minister Mary Ng would not specify when Small asked whether Ottawa had explicitly requested that Asian allies sanction Russian crab.
"We have raised this issue with Japan," she told the House of Commons. "We will continue to stand up for Canadian fishers."
Ng's office added Tuesday that Canada still hopes Japan will change course, as part of their ongoing collaboration to isolate Russia.
"We are thankful for Japan’s continued efforts to work with allies to isolate Russia, and have asked Japan to consider Canada’s sustainable, ethical and premium snow crab to replace its current supply of Russian products," spokeswoman Alice Hansen wrote in an email.
Fisheries Minister Joyce Murray told the Fisheries Committee on March 27 that she discussed the matter with Tokyo's envoy.
"I have raised this matter personally twice with the ambassador from Japan to Canada — in fact, once at his residence at a reception. We are taking a Team Canada approach," she said.
"We will stand up for our fish harvesters and our fishing industry and help export our top-quality products around the world."
The Japanese Embassy in Ottawa said it's been steadfast in sanctioning Russia and banning trade in multiple products. Tokyo removed preferential tariffs on Russian fishery products including crab, which drives up the price for those imports but doesn't block them.
The cause of shifting trade flows "is thought to be the soaring price of Canadian crab, as a result of the impact of higher fuel costs and other factors," the embassy's economic section told The Canadian Press in a statement.
"Should prices normalize, we expect that purchases of Canadian crab will increase."
Small, who is the Conservatives' fisheries critic, has asked for Prime Minister Justin Trudeau to raise the issue with his Japanese counterpart. Trudeau is widely expected to visit Japan later this month for the G7 leaders' summit in Hiroshima.
"While Canadian prices may have been higher than that of crab dumped on the Japanese market as a result of U.S. sanctions, we are G7 partners and the government of Canada should be pressing Japan to buy from us, and sanction Russian crab until the Ukraine war is over," he said in an emailed statement.
Small said "aggressive Russian dumping" left unchecked is causing the biggest Newfoundland fishery shutdown since the calamitous 1992 cod moratorium.
"The economic devastation as a result of what’s happening is immense."
Newfoundland and Labrador Premier Andrew Furey raised the issue with Japanese Ambassador Kanji Yamanouchi during his visit to St. John's in March, with the province noting in a statement "the negative impact that exports of Russian crab to Japan are having on the province's crab fishery."
And Nova Scotia's government said Fisheries Minister Steve Craig "raised the snow crab issue during two recent meetings with Japanese officials," adding the species makes up the province's second-largest seafood export.
New Brunswick's fisheries department said it was "aware of the issue" and is promoting exports where it can, such as with the ongoing Seafood Expo Global in Spain. Prince Edward Island did not offer a response.
Still, Japanese officials seem unconvinced that their country is having much of an effect on the Canadian market.
The embassy noted that roughly 90 per cent of Canada's snow crab exports go to the U.S., while Japan's share made up only about four per cent before the invasion of Ukraine.
"We consider it difficult to believe that the decrease in Japan's imports is the main factor having a major impact on the Canadian fisheries industry," the embassy said.
This report by The Canadian Press was first published May 2, 2023.