Effects of countervailing duty on Norwegian farmed salmon

The recent plunge in the price of Norwegian farmed Atlantic salmon provoked salmon farmers in the United States, Scotland, and Ireland to file dumping litigations against Norway. A dynamic econometric model was constructed to depict the world salmon market and was used to simulate the impacts of a countervailing duty levied on Norwegian farmed salmon. Four different combinations of countervailing tariffs levied in the United States and the European Economic Community are examined. Future profitability of US salmon farming is found to depend on the joint determination of the dumping litigations against Norway in the United States and the European Economic Community. The Pacific salmon capture fishery is likely to be adversely affected if the European Economic Community imposes a larger countervailing tariff than the United States.