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The hard lot of ‘tra’ and ‘basa’
Vietnam’s tra and basa (catfish) exporters have been steadily increasing their sales in the American market, and not surprisingly, American catfish producers keep up strong political pressure demanding ‘protection.’ Those pressures may not amount to anything in the end, however.
Tra and basa, members of the catfish family that are ‘farmed’ in Vietnam’s Mekong Delta, seem to face many difficulties and meet many barriers when penetrating export markets. In short, although the WTO limits the most blatant forms of protectionism, local producers in importing countries are still able to put up roadblocks.
For example, right after the US Bilateral Trade Agreement (BTA) took effect in 2001, a US regulation forbid Vietnam’s exporters to market ca tra and ca basa as ‘catfish’ in the US. The two species are in fact members of the same fish family and taste very much like American catfish. Vietnamese perceived this as a blatant effort to hinder penetration of the US market.
Vietnamese producers then also had to spend a lot of money and effort to popularize its do the marketing for its fish products under the new names and persuade US consumers that ‘tra’ and ‘basa’ from Vietnam have high quality, delicious taste and competitive prices.
With a lot of efforts, Vietnam’s tra and basa industry overcame this obstacle. Then another difficulty appeared: an anti-dumping suit was filed by representatives of the US catfish industry. They charged that Vietnamese exporters were selling fish products on the US market for less than their fair cost of production..
Thus, Vietnamese enterprises and farmers had to show to the US agencies that they do not dump in the US market, trying to explain that Vietnam’s fish products have competitive prices in the US market because Vietnam has advantageous geographical conditions and cheap labour cost. By and large, they have been successful. The ‘anti-dumping duty’ was reduced to zero by the US government.
Yet more difficulties have appeared this year. First, a Farm Bill has been enacted which requires strict regulation of catfish products. The new law was enacted one year after a controversy over excessive antibiotics and chemicals found in catfish imports from China.
Now, ironically, the US Department of Agriculture has proposed to update its regulations to include Vietnam’s tra and basa in its list of ‘catfish’ subject to rigorous inspection procedures. The US position essentially reversed a lot of theoretical points trotted out several years ago to prove the opposite thing – that Vietnam’s tra and basa could not be considered as ‘catfish’.
Furthermore, rather than let the anti-dumping case of Vietnam’s tra and basa exports ‘die,’ the Congress has bowed to pressure from the American producers and extended the case for another five years. Thus the Department of Commerce will have to make another ‘anti-dumping’ determination. It seems unlikely, however, that Vietnam will be found to be selling basa and tra below their cost of production.
In addition, to meet the requirements of the new inspection law, the US and Vietnam will have to agree to procedures for US Agriculture Department experts to inspect Vietnamese processing plants from time to time.
Vietnam Association of Seafood Exporters and Producers (VASEP) statistics show that in the first quarter of 2009 alone, Vietnam exported $22 million worth of tra and basa to the US, an increase of 93.4 percent in comparison with the same period of 2008.
Ngo Van Thoan, Vietnam’s senior trade official in the US, called the notion of redefining Vietnam’s tra and basa as ‘catfish’ for regulatory purposes in the US “unreasonable.” “this is unfair for Vietnam . . . and US consumers may suffer.”
Vietnamese Ambassador to the US Le Cong Phung has recently sent a letter to 140 US congressmen, requesting they reconsider if the draft regulations of the US Department of Agriculture on listing Vietnam’s tra and basa as ‘catfish’ are really necessary in the context, when the two way trade exchange has been developing well
Pham Chi Lan, independent expert, who has deep knowledge about the trade relations in the world, said that Vietnam can think of negotiating with the US Government. Lan said that if even the negotiations cannot help settle the problem, and that if realizing that the change in the naming can cause big difficulties for Vietnam’s fish exports, Vietnam can use its WTO membership status to settle disputes.
Of course, Lan said, the most ideal solution to the problem is to seek a common view through negotiations, because dispute settlement through WTO will take big efforts and time of the two sides.
Tra and basa exports have helped create jobs for Mekong River Delta’s farmers. The exports to the US now account for five percent of the total tra and basa exports. They are also exported to Japan and Europe.
VietNamNet, TT, DNCT
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