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Tra fish anti-dumping tariff disputed   2010-09-29 - Viet Nam News

Vice President of the Viet Nam Association of Seafood Exporters and Processors Nguyen Huu Dung spoke to Viet Nam News about reactions to the United States Department of Commerce's recent increase of anti-dumping tariffs on tra fish frozen fillets imported from Viet Nam.

On September 15, the US Department of Commerce (DOC) made a preliminary decision on imposing an increase of up to 136 per cent in anti-dumping tariffs on tra fish imported from Viet Nam after its sixth review of the product in the period from August 1, 2008 to July 31, 2009. What do you think about the DOC's latest move?

 
The Viet Nam Association of Seafood Exporters and Processors (VASEP) and its members are indignant about this utterly unreasonable decision. This step goes well beyond previous reviews, and is a prohibitive tariff.

The reason for a sudden hike in the duty rates is the DOC's switch from Bangladesh to the Philippines as a surrogate market to determine the anti-dumping margins for fish imports from Viet Nam.

The DOC's use of data from the Philippines as the benchmark is extraordinarily unfair for Viet Nam, because the Philippines' tra fisheries sector is a fledging industry, with undeveloped farming and processing, which results in a production cost of US$2.38. Vietnamese tra fish by contrast costs only $0.8 per kilo to produce. Viet Nam is one of the biggest- tra exporters in the world, and the annual export of raw material totals 1.2 million tonnes a year, while the Philippines exports a mere 12.7 tonnes annually.

This is not compliant with surrogate country selection proceedings, because a surrogate country is supposed to be at a comparable level of economic development, and must also be a significant producer of comparable merchandise.

How does VASEP intend to help affected enterprises?

Just two days after the DOC's announcement, Minister of Agriculture and Rural Development Cao Duc Phat voiced our concerns to the US Ambassador to Viet Nam and the diplomat promised to have those concerns heard back in the US.

VASEP also sent representatives of the two largest tra suppliers in Viet Nam, Vinh Hoan and Hung Vuong, to the US to meet with the Vietnamese diplomat to US to begin discussions with relevant agencies there.

In addition, VASEP and lawyers are preparing necessary materials to finalise a report by October 20 that will show DOC's calculation of tax tariffs on Vietnamese tra fish products was based on an inaccurate set of data.

In the worst scenario, if Vietnamese enterprises still have to bear these unjust tax levels, it's very likely that we will take a similar action by importing foodstuffs for livestock from other markets rather than the US, despite the US having recently passed India and Argentina to become the largest foodstuffs provider to Viet Nam. Import turnover for the first half of this year already reached $800 million, an 82-per-cent surge compared to the same period last year.

If these extreme tariffs are imposed from March next year, what will be the estimated damage to Vietnamese exporters and processors?

As of now, the average price for a kilo of tra fish is $3.5-4 as Vietnamese product is enjoying the lowest tariff rate of 0.52 per cent. If the tariff exceeds 100 per cent, American customers will have to pay $7-8 per kilo, which makes Vietnamese tra fish much less competitive. If this happens, I believe many Vietnamese exporters will abandon the US market.

If Vietnamese tra fish exporters turn their back on the US, the American seafood processing industry, which is dependent on importing raw materials, will be hurt. It is estimated that the Vietnamese tra fish accounts for 10 per cent of US seafood imports.

The unreasonably high tariff will have a direct impact on American consumers first, as they have to buy tra fish at double their current price and also pose a potential threat to thousands of American workers whose work is directly related to processing imported tra fish.

Why is Viet Nam always involved in anti-dumping cases when it comes to exports? What should Vietnamese companies do to adapt to this situation?

Anti-dumping tariffs are a headache for Vietnamese businesses as several countries haven't recognised Viet Nam as a full market economy. However, the tra fish industry in Viet Nam is mainly owned by the private sector, but it is no mean feat to prove the industry is operating in accordance with market norms.

DOC argues that the Vietnamese Government still offers subsidies in terms of major production inputs including electricity and raw materials. However, that is something we as enterprises can't change. And we are afraid that not only United States but other countries also hinge on this reasoning to attack the Vietnamese tra fish industry.

In terms of more sustainable future development, we have to quickly apply Global GAP (Good Agricultural Practices) standards – a passport for agricultural products to travel globally - to wider-scale tra fish production.

And it's high time for Vietnamese enterprises to switch their focus to quality rather than quantity. Delivering high-quality products will result in higher prices. As of now, VASEP has begun ranking enterprises based on average export prices rather than the total export volume.



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