Fishing for US-China Cooperation from Virginia
By Doug Barry
The United States produces only 20 percent of the seafood that Americans eat. That’s a need that requires filling by someone who’s good at finding fish worldwide. Meet Matthew Fass, president of Maritime Products International of Newport News, Virginia.
The Fass family seems to have seafood in their blood. Matt is the fourth generation of his family in the seafood industry, starting with his great grandfather, who was an oysterman in Portsmouth, Virginia. The family business evolved over the generations, starting from oysters and expanding into other local species. His father and uncle pivoted deeper into processing, becoming one of the larger fresh fish operations on the East Coast. The brothers also became pioneers with seafood importing and even expanded into a chain of seafood restaurants. Then Matt’s father, Arthur, started Maritime Trading Company in 1983, which later evolved into Maritime Products International. Maritime focuses on frozen seafood imports from around the world, including seafood trade with China (no more restaurants). At age 90, Arthur still comes to the office every day, joined there by 12 other employees, who together are responsible for over 30 million pounds of seafood distribution and more than 1,000 ocean containers each year.
Matt was trained as a lawyer at the University of Virginia. His knowledge of the seafood industry consisted of the catch of the day at one of the family’s restaurants and recognizing the smell of the fish plant in the family car. He didn’t get any pressure to join the family business, but eventually spent time looking at what his father was trying to build and decided to join in. He has spent more than 25 years helping re-shape and expand the company while remaining true to its fundamental roots—bringing a wide range of global seafood to US consumers through national restaurants and grocery stores.
The limitation with US domestic-only production is supply, not demand. “Domestic fish are wonderful,” observed Fass, “some of the most outstanding in the world, but we don’t produce enough of them.” Wild caught species have natural limitations if harvesting is to remain sustainable, and he said that while farmed fish production is booming, most of it is imported from other countries. The United States produces some farmed fish, and he is in favor of helping aquaculture grow in the United States where it might make sense. But other countries have plentiful natural resources that help support cost-efficient, responsible aquaculture growth, and some have been doing it for thousands of years. “While nobody really envisioned this 30 years ago, approximately 50 percent of the seafood consumed in the United States today is farmed,” Fass said.
Scaley supply chains
“Dad went first to China in the 1980s. China has a fascinating history with seafood. They produce seafood for global export a number of ways, including a long history with aquaculture throughout China.”
China has developed expertise in seafood processing as well, creating value-added products from species that may not otherwise be in a consumer-friendly form. Species like pollock and flounder are caught around the world and processed in China, because the originating countries, including the United States, haven’t developed enough processing capabilities. Some of these species are harvested and frozen on large boats where they are then taken to China for this additional processing, including deboning and filleting. The reprocessing can require grueling work involving lots of strong hands from experienced workers and specialized machinery, as well as advanced logistics.
In other words, the fish are caught in US waters by US boats or international waters by other documented vessels, transferred to a port city in China for processing, then exported back to the United States. Because they are processed in China, they are considered an import from China, appearing as such in government reporting, even if the fish were caught by Americans in American waters.
"The majority of our wild-caught fish we buy from China is very traceable back to its source according to a third-party certification system. Quite a bit of it is even US-caught."
Why can’t the United States process more of its own fish? “We just don’t have the facilities or the consistent labor, and even if we did, the cost to get that fish on a dinner plate would put it out of reach for many American families.” That fish sandwich you like would no longer be considered a happy meal.
“During one of dad’s first trips to China in the 1980s, he was working with a European trading company. He met a young woman on the ground who had graduated from international trade school there and had some background in seafood. She has been with us for over 30 years. She lives in northern China and is our primary liaison on the ground. Seafood is an extremely people-oriented industry, and we have developed life-long relationships in China with producers, processors, local governments, and others.”
Fass works all over the world, but some of his best relationships are in China, which makes the current low ebb in the geopolitical relationship especially painful. “I have very few US friends these days who listen to what we do, see the passion with which we work, and respond ‘You work with China in the food industry? That sounds great!’”
One hard to navigate issue is illegal fishing and accusations that China is among the biggest offenders. Known as IUU (illegal, unreported, and unregulated) fishing, illegal fishing includes offenses such as the boats from one country entering the territorial waters of another country to fish without permission. Another IUU offense is to catch massive amounts of fish in international waters without regard to rules or scientific evidence that attempt to limit overfishing. Fish stocks need to be managed which requires close international cooperation without which important stocks can crash and take years to recover.
Fass does not claim to be an expert on every aspect and allegation of illegal fishing, and he believes both government and industry should do all they can to fight this type of fishing by any country anywhere in the world. But he also believes the seafood supply chain in the United States is much more transparent than most perceive and that the amount of IUU fishing compared to the overall amount of seafood trade in the United States is very small. When he reads about claims of illegal Chinese vessels off the coast of Africa or Galapagos Islands as examples, it seems completely disconnected in his experience to any products being harvested and processed for US export. “We know personally all of our producers. The majority of our wild-caught fish we buy from China is very traceable back to its source according to a third-party certification system. Quite a bit of it is even US-caught. Most of our customers require that we supply this type of information, and this has become common practice throughout our industry.”
“The tariffs are wrong-headed. It doesn’t mean we don’t have issues with China on trade or in other serious areas. But we need to find ways to stay engaged in the right way and focus on what’s working.”
Fass notes that the industry has been operating for the past few years under a NOAA-enforced regulatory regime called the Seafood Import Monitoring Program (SIMP)—a new import-reporting framework designed to specifically target IUU imports. NOAA’s own self-reporting for 2020 states that “[t]he majority of SIMP audits do not identify noncompliance. Of the 40 percent that do, only a small number rise to the level that they warrant enforcement action. Those are referred to OLE [NOAA Fisheries Office of Law Enforcement].” “Considering that NOAA itself states that a ‘small number’ of SIMP audits have uncovered IUU fishing, we need to make sure we are crafting sensible policies proportionate to the problem and according to solid data.”
China is also a major source of farmed fish such as tilapia, likewise with a third-party verification system to ensure the product is coming from processing facilities and farms meeting some of the highest standards in the world, according to Fass. There are a number of other species for which China has grown as a source of global supply, ranging from farm-raised catfish to bay scallops to crayfish. “I could talk about catfish and crayfish all day—fascinating species and some interesting politics as well.”
How about exporting invasive Asian carp to China, as was featured in a recent 50 States, 50 Stories article? “There is definitely a strong and growing market for consumption of seafood in China. Carp—no perfect plan for that. I have seen the government try to support catching those fish, but there are so many parts of the supply chain—fishermen, processing, transportation. It’s hard to make it work at the right price.” The US seafood industry relies on workers with temporary work visas, because it is very labor intensive. “So many seafood companies have struggled to get workers. Even if catching carp is incentivized, will there be enough fishermen and workers in fish plants paid at the right price?” Never mind the hazards posed by the penchant of the carp to jump out of the water and hit the fishermen in the face.
Angling for the end of tariffs
The bigger drag on his business has been former president Trump’s tariffs imposed on billions of dollars of goods imported from China, including some seafood.
“Unfortunately, our business has decreased with China over the past few years. Tariffs have had a major effect. Our company always values diversification, and the tariffs have certainly encouraged us to continue to make diversification a priority, but it’s hard. It’s not necessarily just the cost of labor, as that is going up in China, but they have expertise with seafood and many complicated aspects of the supply chain that is second to none.”
Certain items are exempted from the tariffs because they aren’t produced outside China—although it has been complicated with seafood and is very species dependent. Maritime Products International pays a 25 percent tariff on tilapia and a number of other species from China. “Flounder had a tariff, then it was exempted, then had tariff, now exempted again. Can you imagine the near impossibility of trying to speak with customers about planning and pricing with such uncertainty on tariffs?”
Fass is active in lobbying government officials to preserve the trade relationship with China on which his and other small businesses depend. He said: “It’s hard to know if I have made headway with the Virginia delegation. Most of the delegation are good listeners. When I tell them that the United States imports 80 percent of its seafood, they are surprised and ears perk up. Most can relate to seafood in some way personally, but so many do not understand the supply chain fundamentals. We describe how our business with China supports many US jobs in trucking and commercial cold storage, in restaurants—jobs that would otherwise not exist because we simply do not have the supply in this country. Elected officials don’t always see the jobs we create. Instead, they often ask, ‘why can’t we provide more US product?’”
Fass finds the politics fascinating yet frustrating. “I understand the perception of China as not following the rules, is a competitor, and so on. But the Chinese people are good—the people with whom we work are moms and dads, brothers and sisters—often with other family members in their companies, similar to many food companies in the United States. These are not government entities or companies dealing with intellectual property or controversial technology concerns. They are small businesspeople like us that have grown and prospered over time. Now they are our partners producing good quality, healthy food for consumers. This is a very positive thing at any time, but especially now when so many are experiencing rising food costs and overall inflation.”
He said, “The tariffs are wrong-headed. It doesn’t mean we don’t have issues with China on trade or in other serious areas. But we need to find ways to stay engaged in the right way and focus on what’s working.” He used to export seafood to China, but tariffs killed that business.
“I’m proud of the work we do in China. At some point you either engage or you don’t engage, and it feels like we are going in this awful direction with the rhetoric on how we even think about each other. It’s not going to change overnight, but it’s never going to change if we don’t speak out about it.”