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U.S. Lobster Dealers Hope To Claw Back Market Share In Europe

Cooked lobsters are seen in Bernard, Maine. The U.S. lobster industry has been at a competitive disadvantage in Europe ever since Canada struck its own trade deal with the European Union three years ago.
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Cooked lobsters are seen in Bernard, Maine. The U.S. lobster industry has been at a competitive disadvantage in Europe ever since Canada struck its own trade deal with the European Union three years ago.

The Trump administration has struck a small-scale trade agreement with the European Union that could send more American lobster across the Atlantic.

Europe has agreed to suspend tariffs on imports of live and frozen lobster from the U.S. for at least 5 years. In exchange, the U.S. will cut tariffs by 50% on some European products, including crystal glassware and cigarette lighters.

While the agreement covers a tiny fraction of trans-Atlantic trade, it's important for the U.S. lobster industry, which has been at a competitive disadvantage in Europe ever since Canada struck its own trade deal with the E.U. three years ago.

That deal made Canadian lobster 8% to 20% cheaper in Europe and sales of American lobster fell by about 50%, said Annie Tselikis, executive director of the Maine Lobster Dealers Association.

Now that all North American lobster will be on an equal footing in Europe, U.S. dealers hope to claw back some of their lost market share.

"We're lucky that this has happened and we're excited to get back at it," Tselikis said.

The U.S. lobster industry is still in hot water, though, with the supply of shellfish outstripping demand, pushing retail prices down. In many supermarkets, lobster is selling for less than $6 per pound.

Lobster dealers continue to face stiff tariffs in China — another potentially lucrative export market — as a result of the president's trade war. Shipments from Maine to China fell by 42% last year.

And lobster shipments worldwide have suffered this year, largely as a result of the coronavirus and the resulting drop in restaurant dining.

"About 80% of all lobster is consumed outside the home," Tselikis said. "We are definitely seeing an increase in supermarket sales, both domestically and internationally. However, that is a bit of a hurdle."

She hopes the lifting of tariffs will encourage more home cooks in Europe to add processed lobster to their pasta and paella.

"Market diversity is very important for our industry," she said.

Trade officials from the U.S. and Europe said they hope the lobster agreement represents a first step toward a more comprehensive deal.

"We intend for this package of tariff reductions to mark just the beginning of a process that will lead to additional agreements that create more free, fair, and reciprocal transatlantic trade," U.S. Trade Representative Robert Lighthizer said in a joint statement with his European counterpart, Phil Hogan.

Copyright 2021 NPR. To see more, visit https://www.npr.org.

Scott Horsley is NPR's Chief Economics Correspondent. He reports on ups and downs in the national economy as well as fault lines between booming and busting communities.