More than 1,700 fishing boats raced out of Nova Scotia ports before first light Tuesday morning on what is known as Dumping Day – the opening of Canada’s biggest and most lucrative lobster fishery.

It also signals the start of when their U.S. rivals in Maine and Massachusetts will begin to feel the sting of the 8 percent tariff differential created when Canada signed a new trade deal with Europe, leaving American lobstermen to wonder just how much of that valuable market they are about to lose.

During their last six-month season, the two inshore fishing territories off the southwestern coast of Nova Scotia, labeled No. 33 and 34 out of Canada’s 45 lobster zones, landed about 33,500 metric tons of lobster that raked in about $493 million in Canadian dollars. To get a sense of scope, the 1,500-boat fleet between Halifax and Digby caught as much lobster during its half-year run as Maine fishermen did in all of 2016.

The two zones off Nova Scotia were closed in September when Canada inked a new trade deal with Europe allowing its exporters to sell tariff-free lobsters to the 28-member European Union, which is the world’s largest importer of North American lobster despite stiff competition from the lobster-obsessed Chinese. That gives Canadian lobstermen a huge price advantage over their American counterparts, who must charge EU buyers an 8 percent tariff.

“We know the trade deal is going to hurt, but we don’t know how bad,” said Annie Tselikis, the executive director of the Maine Lobster Dealers’ Association and the head of marketing for Maine Coast, a York lobster wholesaler. “We haven’t lost Europe. There are still a lot of relationships at play. Maine companies have been selling lobster to our European friends for years. But there’s no way around it, the tariff is going to hurt.”

But the sting hasn’t been felt yet. The trade deal has been in effect for three months, but at the time, the only Canadian lobsters available for sale to Europe were hard-shells that had been in storage. They are pricier than the softer shelled lobsters that U.S. fishermen land in summer and fall, even with a tariff in place. Now that molting season is over and Maine fishermen are catching lobster as hard-shelled as Nova Scotia’s, Canada is poised to cash in on the benefits of its trade deal.

MILLIONS OF DOLLARS AT STAKE

While the Maritimes region reveled in the tradition known as Dumping Day – when the 5,200 fishermen who haul lobsters in No. 33 and 34 race out of their ports on the first day of the fishing season to “dump” all their traps overboard and lay claim to the best fishing grounds for the rest of the season – Canadian officials don’t yet know how much Canada stands to gain from its new trade deal.

“It is too early to determine its impact on Canada’s lobster exports to Europe,” said Carole Saindon of the Canadian Department of Fisheries and Oceans. “That said, this agreement allows for Canadian fish and seafood exports to gain increased access through reduced tariffs.”

However, it’s clear that there is a lot of money to be made. In 2016, the EU imported almost $300 million worth of lobsters from North America, with a little more than half of the imports coming from the U.S., according to United Nations trade statistics. The southwest Nova Scotia fishery is opening up just in time to exploit Christmas sales, the EU’s busiest lobster season. Last December, the U.S. sold $28.3 million in live lobster to Europe, more than twice as much as any other month.

American dealers are still filling airplane cargo holds bound for London, Paris and Madrid with lobster they are buying from both American and Canadian fishermen, Tselikis said. That is something that many outsiders forget, she said – the Canadian and U.S. lobster markets are closely intertwined, not just by the species of lobster hauled from shared waters, but by a complex network of cross-border sales and shipping.

‘IT IS … GOING TO HAVE AN IMPACT’

Despite that price differential, Canada alone could never fill the global demand for lobster, especially around a busy time like Christmas, when everybody wants to buy lobster over the same two-week period, she said. The demand for lobster to fill sales orders around Chinese New Year also requires the combined harvest of both of the national lobster fleets, and the logistical networks of their dealer networks, Tselikis said.

The impact of the trade deal will be felt beyond the European market, Tselikis said. American lobster dealers who might be losing ground in Europe will likely seek to sell into the Asian market, increasing the supply of American lobsters there and possibly influencing prices – even in a market where American lobsters don’t face any extra trade hurdles, she said. But even there, the weak Canadian dollar makes it tough for U.S. sellers to compete. On Tuesday, $1 Canadian was worth 78 cents U.S.

Dealers like Tselikis are loath to speculate about how a new wrinkle in something as complicated as the international lobster market may play out. With so many variables to factor in, including weather, the size of the U.S. and Canadian harvest and international events that can drive consumer taste for what is still a celebratory meal, it can be really hard for anyone to calculate the impact of the Comprehensive Economic and Trade Agreement, or CETA.

“It is definitely going to have an impact on the supply chain, but how that will manifest itself is hard to say,” Tselikis said. “But I know we are only just now going to feel it.”

Penelop Overton can be contacted at 791-6463 or at:

poverton@pressherald.com

Twitter: PLOvertonPPH