 |
| Surcharge: After import tariffs,
American consumers have to pay extra for this
fish. |
| Courtesy VASEP |
The United States Commerce Department (DoC) in
a heavily contested decision marred by mathematical
– and as the Vietnamese side contends, methodological
– errors decided to impose import duties on
Vietnam’s aquaculture exports to its biggest
market.
Whatever the legal and technical merits of the trade
action, the U.S. assault on Vietnamese catfish has
shown effects. In mid-February, the biggest catfish
exporter, Agifish, halted sales to the United States,
Vietnam’s most important market. At the time,
the DoC had slapped tariffs as high as 64% on frozen
catfish fillet, although the agency had to admit to
a simple mathematical error and alter its calculations.
Vietnamese farmers insist they can beat U.S. prices
based on fair and square market principles –
lower labor costs and better natural conditions for
raising catfish. Moreover, Vietnam is a poor country
and could not afford the kind of subsidies or market
distortions the United States routinely pays its farmers.
Equally importantly, the change of heart of U.S. legislators
on the promise of free trade hits the poorest Vietnamese
hardest. The provinces with the top fish and shrimp
export numbers are also among the lowest income areas
in Vietnam: Ca Mau ($340 million exported), Soc Trang
($230 million) and Can Tho ($198 million).
This is no coincidence. Aquaculture has been considered
a means of poverty reduction for a long time, both
by the Vietnamese government and international aid
and donor agencies, like the U.N. Development Program.
As a consequence, aquaculture projects are primarily
initiated in poverty-stricken areas.
Dr. Nguyen Huu Dung, the general secretary of the
Vietnam Association of Seafood Exporters and Producers
(VASEP) explains that both in the United States and
Vietnam, catfish started out as “poor-people
food.” Aquaculture, he says, has a very long
tradition, mostly in poor areas where the soil is
saline or where regular floods or droughts make the
land less suitable for intensive crop cultivation.
“In the past, in the dry season, people wanted
to keep some fish in cages or ponds to get over the
bad times, so aquaculture developed. A photo from
1921 shows a commercial fish cage in the Mekong.”
The inland fishing industry, including aquaculture,
has historically played a key role in food security
in the region. Approximately two million tons of aquatic
animals are harvested in the Lower Mekong Basin, an
area that includes Cambodia and Laos, the Mekong Delta
and northeastern Thailand. This harvest accounts for
up to 75% of total protein intake of the population
in the region on average, and more than that in poor
rural areas.
Some 40,000 families in the Mekong region are affected
by the U.S. decision, says Dung. Many of these families
are indebted through the loans they needed to start
a fish farming business. Although extremely reasonable
by Western standards, in a country where the average
income hovers around $440 annually, and in the countryside
can be significantly lower, even a loan of a few thousand
dollars is devastating if the business falters. Moreover,
many of these fish farmers have sold or mortgaged
their land in the hope for a good, new market with
catfish.
“All this,” says Ngo Phuoc Hau, general
director of Agifish and vice president of VASEP, “to
benefit seven U.S. catfish producers.” Agifish
is Vietnam’s top exporter of catfish fillet to
the United States, but had to cease shipments when
the 64% tariff went into effect.
“The burden of this will be on the farmers,”
Hau says. “They had to borrow money, invest money
in the operation.”
Agifish and other exporters are trying to ease the
blow by increasing prices for top quality fish in
the hope that they will be able to re-enter the U.S.
market or to attract new customers. The positive side
effect of this issue is that due to international
reporting on this protectionist U.S. trade action,
Vietnamese catfish became well known around the world.
“Basa is now well known world-wide,” says
VASEP’s Dung. But shifting markets does not work
overnight, “marketing takes time.”
The solution to all this, says Dung, is working together
for both sides’ mutual benefit. “You can
produce Boeing [aircraft in the United States],”
he says, “but you cannot produce catfish very
well at home. You should invest in Vietnam. You can
earn money here. Our farmers earn money, and our processors
earn money, we need technology and capital, so you
can make money here, too.” |
