When Americans think about lobster, Maine often comes to mind. But Nova Scotia has emerged as a fierce competitor in exporting lobsters, particularly to Europe. Last year, American lobstermen sold only slightly more to Europe than their Canadian counterparts.
That balance could soon shift given the Canadian-European trade pact, which eliminated an 8 percent European tariff on live lobster when it went into effect in September. Tariffs on frozen and processed Canadian lobster will be phased out in the next three to five years as part of the agreement.
The elimination of European tariffs is “the single most challenging issue” for the American lobster industry, said Annie Tselikis, the executive director of the Maine Lobster Dealers’ Association, which represents companies that buy lobster from Maine fishermen. “This trade agreement does give Canada a huge leg up in the European marketplace,” she said.
Ms. Tselikis said the pact was encouraging American companies to invest in new facilities in Canada to qualify for the lower European tariff.
“If the argument is you’re not going to develop this trade policy because you’re worried about outsourcing jobs — well, here we are, potentially outsourcing jobs due to an absence of trade policy,” she said.
Gidney Fisheries, which exports live and frozen lobster, is poised to take advantage of the changing terms of trade. Last year, in anticipation of increased demand, the factory invested in state-of-the-art technology to set itself apart.
The company imported a German machine, sometimes used to make cold-pressed juice, that creates pressure of up to 87,000 pounds per square inch. The machine compresses the lobster in its shell, breaking the connective tissue, killing the lobster in seconds and allowing the meat to be extracted entirely raw — a selling point for chefs and consumers, as the process is considered relatively humane.
On the factory floor in September, a worker in a gray smock covered by a shiny rubber apron loaded lobsters into a plastic tube to feed into the machine. A dozen workers smashed claws, used tiny air hoses to remove entrails and sorted peachy-pink lobster meat into various packages to be flash frozen.
“A decade or two ago, there would be very few players who would have been shipping internationally,” Mr. MacDonald said. “We now ship live lobsters all over the world.”
Once mostly confined to the plates of the rich, lobster has gone mass market. A glut in the global catch roughly five years ago — the product of overfishing cod, a natural lobster predator — caused the price to plummet. Lobster rolls and lobster mac and cheese suddenly appeared on menus of fast food chains like Pret a Manger, Au Bon Pain, Quiznos and even McDonald’s locations in New England.
Better packaging and faster freight services allowed American and Canadian exporters to expand into Europe and Asia. Exporters found a promising new market in China, where newly affluent diners were eagerly adopting Western luxury products like wine, caviar and lobster as a marker of taste and distinction.
Gidney Fisheries sought to tap into that market, with the help of Duan Zeng, Mr. MacDonald’s colleague. Ms. Zeng, who has a master’s degree in fish biology, does much of her work on WeChat, a Chinese mobile app, where she sells its wares. Last December, the company teamed up with Alibaba, the Chinese e-commerce company, to sell premium lobsters online.
Gidney Fisheries’ largest market by far is still the United States, where the company supplies restaurants and hotel chains with Nova Scotia lobsters. But given the changing dynamics of trade pacts, Europe could soon be its fastest-growing market, much to the chagrin of American lobstermen, who were hopeful the United States would sign its own agreement with the European Union.
The Trump administration has not said whether it will continue trade talks with Europe. But other trade pacts under discussion, including Nafta, have shown little progress. In mid-October, Jyrki Katainen, a high-ranking European Union official, said Europe was “negotiating with all Nafta countries, and with all TPP countries, except one” — a not-so-veiled reference to America.
John Weekes, Canada’s Nafta negotiator in the 1990s, said he initially believed Canadian companies might have just a narrow window of advantage over their American competitors. Now, that window looks quite a bit larger.
“It does open up a number of opportunities for Canadians that clearly aren’t going to be available to Americans in the foreseeable future,” Mr. Weekes said.