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Duties on catfish exports to U.S. extended

Released at: 09:50, 25/11/2014

Duties on catfish exports to U.S. extended

Government and industry express displeasure with latest ruling.

by Do Huong

The Ministry of Foreign Affairs (MoFA) has objected to the U.S. International Trade Commission (USITC)'s extension of anti-dumping tariffs on Vietnamese catfish products for another five years.

MoFA spokesman Le Hai Binh told the media that Vietnamese tra and basa catfish exporters are not dumping frozen tra and basa fillets in the U.S. market, as the U.S. Department of Commerce (DOC) has concluded. The USITC passed the tariff extension after the DOC determined that revoking them could lead to the continuation or recurrence of underselling by up to 63.88 per cent in the U.S. market. The DOC re-calculates the duties imposed on affected Vietnamese exporters every year.

Mr. Binh called the decision unfair and a violation of the spirit of free trade as well as the fine economic and trade relations between the two nations, in particular the US-Vietnam Comprehensive Partnership. "We think that trade activities between the two countries must be reviewed in a fair and objective way that balances the interests of Vietnamese tra and basa farmers, processors and exporters, against those of US consumers, importers and distributors," he told the media.

After the 10th preliminary results of administrative review (POR10), 24 local catfish exporters will enjoy a tax cut for shipments to the U.S. from August 1, 2012 to July 31, 2013, DOC said. The exporters will receive a refund on any taxes paid in that period above the new tax line. Besides Vinh Hoan Co, in the Mekong Delta province of Dong Thap, which already enjoys an anti-dumping tax exemption, 23 others will see their tax rate cut in half from $1.2 per kilogram in POR9 to $0.58 per kilogram.

Among these companies are the Hung Vuong Group, the Asia Commerce Fisheries Joint Stock Co., the Binh An Seafood Joint Stock Co., the Cadovimex II Seafood Import-Export and Processing Joint Stock Co., the Can Tho Import-Export Joint Stock Co., C.P. Vietnam Corp., the Cuu Long Fish Joint Stock Co., the Dai Thanh Seafoods Co., and the Fatifish Co.

During the review period, however, the DOC also decided to increase tax rates on all other Vietnamese exporters not on this list, from $2.11 per kilogram to $2.39 per kilogram. The same rate will apply to Anvifish Co., as it failed to meet the deadline in submitting dossiers for a tax cut to the DOC.

The DOC previously released the final results of the ninth Period of Administrative Review (POR 9), with anti-dumping tariffs imposed on Vietnamese tra fish to increase 2.8-times from the rates determined in September 2013. Compulsory defendant Vinh Hoan Corp. enjoys a zero tariff while the rate for voluntary defendants is $1.2 per kilogram compared to $0.42, which DOC announced last September. There are 25 enterprises subject to the tariff of $1.20 per kilogram, including Hung Vuong, while the other exporters must pay $2.11. Under the DOC's preliminary determination last September, compulsory defendants had to pay anti-dumping tariffs of $0.42 and $2.15 per kilogram while voluntary defendants must pay $0.99.

The tax rate levied on Vietnamese companies is unreasonable, according to the Vietnam Association of Seafood Exporters and Producers (VASEP), as the DOC continued to use Indonesia as a country of reference for the calculation of anti-dumping margins.

In March last year, after POR9, the DOC cut the tax rates imposed on Vietnamese catfish exporters under POR8 in 2012. VASEP expressed its discontent as the DOC suddenly changed the country of reference, thereby making the anti-dumping duty imposed on Vietnam catfish skyrocket.

In the previous administrative review, the DOC had repeatedly protested the choice of Indonesia as the third country for reference to calculate the input costs of catfish production because the country does not have adequate data on prices and lacks basic financial parameters, according to VASEP. Moreover, Indonesia is a net importer of frozen catfish fillets, mainly from Vietnam, and exports no catfish to world markets.

DOC had previously selected Bangladesh as the country of reference for eight consecutive years in calculating input costs in Vietnam's catfish industry.

In February this year local experts warned that exports of Vietnamese catfish to the U.S. would face major difficulties after the U.S. Congress passed the Farm Bill, which contains provisions directly affecting the Vietnamese industry. The terms that directly affect the exports of foreign products are new regulations that meat, fish, and eggs imported into the U.S. must have country of origin labels confirming that the foreign farming and processing environment is compatible with that of America.

Congress also approved the transfer of the function of monitoring catfish, including from Vietnam, to the U.S. Department of Agriculture (USDA) from the U.S. Food and Drug Administration (FDA). Mr. Dao Tran Nhan, Minister Counselor for Trade in the U.S., said that Vietnam would need five to seven years to upgrade farming and processing standards to levels that meet the cultivation, production, and processing benchmarks in the U.S. before they could resume exports to the country, based on the provisions of the new Farm Bill. "In other words, there are fewer chances for Vietnamese seafood to enter the U.S. market after the law was passed," he said.

Vietnam shipped $240 million worth of frozen tra and basa fillets to the US, Vietnam's second-largest import market after Europe, during the first nine months of this year, official figures show. This represented a 17 per cent decline in value compared to the same period last year.

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