NFI’s John Connelly: US seafood industry faces whole new set of challenges under Biden

Donald Trump’s presidency was a mixed bag for the U.S. seafood industry, according to National Fisheries Institute President John Connelly. Now almost a month into the presidency of Joe Biden, the industry faces a whole different set of challenges, Connelly told SeafoodSource [Read Connelly's full interview here].

Connelly is optimistic Biden will be less aggressive in the use of tariffs than Trump, and he said he’s comforted by the fact that Biden’s picks for U.S. Commerce secretary and U.S. trade representative, Gina Raimondo and Katherine Tai – both of whom are awaiting confirmation votes by the U.S. Senate – are familiar with the seafood industry. But Biden’s environmental initiatives may prove thorny for the industry, and it remains to be seen whether the administration will prioritize the reopening of the foodservice sector, Connelly said.

“Overall, Trump did some good things and some bad things. The way he went about it was disruptive. That got people thinking in a new way about what Washington is and what it could be, but certainly he did some things that were terribly disruptive as well,” Connelly said in a 27 January SeafoodSource webinar. Regarding Biden, Connelly said, “There are [also] going to be some very good things he does and we suspect there are going to be some real challenging things.”

Trump’s legacy will be difficult for the Biden administration to erase, Connelly said. Trump pushed hard for deregulation, which NFI supported. But his trade wars with China and the European Union created a difficult trading situation for many U.S. seafood companies, and his haphazard response to the COVID-19 crisis may have worsened the situation for the U.S. foodservice sector, which the seafood industry is heavily reliant upon for sales, Connelly said.

“From NFI’s perspective, deregulation broadly of the economy is good for our industry and members. A vibrant economy gets people out and spending money in restaurants, and seafood is still primarily eaten out of home, despite COVID. And we had record low unemployment in at least some segments,” he said. “On the downside, probably the biggest challenge from our perspective was the trade disruption he caused, both incoming and outgoing. We always talk about trade being two sides of a coin, and when President Trump threatened Europe and some of their seafood exports [with tariffs], Europe turned around and said, ‘Fine, we have seven times as many imports from the U.S. as we have exports, we’re happy to knock out those imports from the U.S.’ So trade disruption became a problem.”

Most important to understanding the legacy Trump leaves behind is his fundamental realignment of trade as a powerful populist issue, Connelly said.

“President Trump did tap into a sentiment many Americans had and part of that was on trade – particularly imports and whether supply chains that are reliant heavily on overseas production are good for America. And we certainly disagreed with much of his approach on that, but he did tap into something that is important for us to understand and appreciate going forward,” he said. “That got people thinking in a new way about what Washington is and what it could be, but certainly he did some things that were terribly disruptive as well.”

According to Connelly, it won’t be easy for Biden to unwind the Sino-U.S. trade war, which caused significant damage to seafood trading between the two countries. Biden has signaled he will take a multilateral approach to trade negotiations with China, but in order to do so, he’ll need to appease U.S. allies in Europe, who felt burned by Trump’s hostile trade actions against the European Union.

“He’s going to have some folks in his diplomatic world that are more interested in soft diplomacy, working directly with the Chinese to see if we can come to a understanding, And he’s going to have some on the hawkish side – President Biden has strong union backing – and they’re not going to want any kind of softening of our relationship with China. So he’s in a very tough spot politically, because if he unilaterally pulls down tariffs on Chinese products, he’s going to look weak to the Chinese and terrible to his union supporters,” Connelly said. “The specific issue of China is a complete Rubik’s cube and it’s going to take a lot of smart people to figure it out. We just don’t think that’s going to happen in first 100 days. There’s going to be a lot of work that has to happen with other nations. That will include Australia, New Zealand, and some of our other allies in the Pacific, but also the Europeans. But everyone wants something out of this and they’re not going to do things just because Biden is in office.”

Even if Biden manages a breakthrough in negotiations with China on longstanding trade issues, it may already be too late to salvage historical seafood trading relationships that were disintegrated by the trade war, Connelly said.

“There were specific actions at the urging of the previous administration to move manufacturing out of China, not just for trade reasons but for broader strategic reasons. But yes, a lot of seafood production has moved to elsewhere in Asia like Vietnam and Thailand, and other places,” he said. “Some companies brought production back to the U.S. and said we can do what we used to do in China here in the U.S., and that’s a good thing. That happened not just in the seafood industry – most industries went through that same calculus.”

Biden may be more effective in pushing his environmental agenda, which includes regulations to curb global warming and an initiative to create more marine protected areas in the United States. Connelly said the industry stands ready to do its part to fight climate change, but said the creation of new marine protected areas does little to help curb emissions.

“There continues to be an emphasis on marine protected areas, or walling off parts of the ocean to commercial fishing, somehow as an effort to protect against climate change. We just don’t see it,” Connelly said. “Seafood is among the best proteins as far as carbon footprint goes – why would you want take that out of the supply chain, when this food source is going to help the climate? I just don’t know. I just don’t see the connection between those two. Work on climate, absolutely, but don’t put it on the back of fishers, because we put product into the food supply that is among the best as far as climate footprint.”

The seafood industry also faces potential threats in the form of a minimum wage hike being pursued by Democrats in Congress, who now control both the U.S. House and Senate, as well as by immigration reform, Connelly said. But the NFI’s longstanding relationships with key elected officials, including U.S. Sen. Maria Cantwell (D-Washington) and U.S. Sen. Susan Collins (R-Maine), will ensure the seafood industry’s voice is heard as each issue comes up for discussion, he said.

“Specifically to the Senate, we think there are some very good leaders in some of the key committees to seafood. [Cantwell] certainly knows the seafood industry and the importance of those jobs created through the seafood supply chain. She also knows a fair number of import-related issues there, given the Seattle-Tacoma port is in her state. So Cantwell, as chair of the Senate Commerce Committee, is going to be very important [and we’re pleased she knows NFI and a number of other seafood and fish-related advocacy and trade groups, as does U.S. Sen. [Patty] Murray [D-Washington], another senior leader in the Democratic party,” he said.

NFI’s top priorities for the next year are focused on consumer protection. First, NFI will continue to pursue enforcement of net-weight and plant-based labeling issues. Companies cannot use ice or any other product besides seafood to fulfill their net-weight obligations, Connelly said, and NFI will “continue to urge the FDA to enforce the law on that.” And Connelly suggested NFI will be similarly vigilant toward plant-based food companies using names for products that make them sound like they contain seafood.

“We think plant-based proteins are a good choice for some consumers, and they’re certainly a growing area. But if you want to buy a salad, buy a salad. Just don’t call it tuna. It’s not tuna,” he said. “If we [in the seafood industry] have to adhere to a 5,000-word labeling law, we’re hoping there will be a little more truth in labeling at the FDA and we’re hoping the FDA views it as a consumer issue and there will be more attention paid there.”

NFI also wants to ensure the foodservice industry is taken care of in any additional COVID-19 relief package that is passed, Connelly said.

“We have got to get restaurants open,” he said. “We can continue funneling money into the hands of fishing companies and processing companies, we can get some food assistance going, but we’re not getting whole until restaurants reopen. So the president’s focus on the pandemic and getting vaccines out, whether Biden wants to claim credit or share credit with the Trump administration, doesn’t matter to us. All that matters is that restaurants have to open. We are so dependent on restaurants for sales and until those get going again, we’re not going to be robust as we can be. I realize lots of companies have made amazing shifts into retail and those companies have done a great job, but at the end of the day we need the restaurants and need to work through this next package to get them the support they need, because ultimately, if we help our customers, we’re helping ourselves.”

Many of Biden’s top lieutenants come from states with a robust seafood industry presence or are personally familiar with how the seafood industry operates, giving the sector a leg up in the political battles to come, Connelly said.

“We think some of people Biden has appointed either know or come from communities that understand seafood industry, and that’s important, because having some of the key department leadership and senior staff understand the importance of seafood trade and the number of jobs it creates makes our job that much easier,” Connelly said.

Photo courtesy of National Fisheries Institute