Vietnam's tra fish exports to the US seem likely to face yet another trade barrier in the country.
Stability was one of not too many positives to come from Vietnam’s tra fish exports in 2013, which increased just 1 per cent against 2012. Short of funds for production, processing and export, farmers and enterprises were forced to shrink production. Seizing on this apparent weakness, many of their partners sought and were given lower export prices. In the US, meanwhile, the country’s largest market, substantial increases to anti-dumping duties also caused a great many difficulties for exporters. And there’s no real end in sight, with the Farm Bill 2008 having been approved by the US Senate on February 4 after three years of debate, where subsidies of around $956 billion will go to US farmers.
The US Department of Agriculture (USDA) will check the production, in particular product quality and food hygiene and safety, as well as the packaging and exporting of Vietnam’s tra fish enterprises. If all standards meet the requirements imposed on US producers, Vietnamese enterprises will be certified and permitted to export to the US. Tax rates on catfish, which include tra fish, that have been exported by several Vietnamese companies to the US over the last one or two years may also increase under the Farm Bill. Vietnamese companies and the country’s government agencies have four months to consider whether to protest against the bill.
Mr Truong Dinh Hoe, General Secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP), said that USDA will introduce specific provisions within 60 days. Of these, the programme inspecting catfish will have the greatest impact on Vietnam. “If the situation continues like this we must fight,” he said. As the programme is a protective programme, he added, approaching the WTO may be Vietnam’s only recourse. If the programme is different from those announced previously by the US, the two countries could cooperate to ensure fairness.
Judging by the inspection programme, it is believed that the move in inspecting catfish from the Food and Drug Administration to USDA was initiated by special interest groups in the US catfish industry with the aim of creating unofficial trade barriers on imported goods. In its inspection programme the US requires Vietnam apply a chain in production, processing, storage and exports similar to meat products of enterprises in the US. “The bill isn’t practical because the US catfish industry itself is unable to meet such requirements,” said a representative from a tra fish export company in the Mekong Delta. “But they ask Vietnam’s tra fish industry to comply with these requirements before being permitted to export. They have virtually shut the door to our exports.”
Need for monitoring
According to Mr Nguyen Van Kich, Vice President of the Vietnam Tra Fish Association and General Director of Cafatex Fisheries, it is unreasonable to expect Vietnam’s tra fish exports to the US to meet the same production and packaging standards as meat in the US. “The FDA previously had the function of supervising seafood imported into the US, including Vietnam’s tra fish,” he said. “This function has now been moved to USDA, and our tra fish are being managed like meat, which obviously causes us difficulties.” Vietnam must stay calm, he continued, monitor whether tra fish standards are applied differently to meat and wait for further guidance from USDA. “If they treat it the same as meat, it can be very risky for Vietnam,” he said. “We don’t yet know how specific it will be, but it may cause confusion if we comment because this is a major industry and has stable production.”
Vietnam’s tra fish is now exported to 149 countries and territories, compared to 140 in 2012. The country currently accounts for over 90 per cent of all tra fish in the world, of which the US and the EU are its two biggest import markets, making up 44.3 per cent of tra fish exports. If the USDA actually manages catfish, including tra fish imported from Vietnam, in accordance with the Farm Bill, the country’s exports to the US are almost certain to decline. As it seems quite clear that it’s a protection issue, Vietnam’s seafood industry may have to resolve it at the WTO.