Exporters face nasty barbs in their search for markets

“They have recognised that Vietnam’s regulations are in line with the international practice”

Vietnam’s seafood exporters are facing large obstacles to penetrate into foreign markets.

Recently, the United States’ Department of Commerce (DOC) made a preliminary decision on imposing anti-dumping tariffs on tra fish imported from Vietnam to the US.

Under this decision, from early next year some Vietnamese tra exporters will be subject to duty rates of over 100 per cent. Specifically, some Vietnamese businesses will have to pay a high tax sum of $4.22 per kilogramme, while the current selling price of tra on the US market is much lower, ranging from $2.0-$2.4 per kilogramme.

The decision was made based on that the US used raw material inputs from the Philippines and other countries different from Vietnam as a foundation to calculate dumping rates. For example, the Philippines is home to an under-developed tra industry.

According to the Vietnam Association of Seafood Exporters and Producers (VASEP), the decision is groundless, because per capita income in the Philippines is double that of Vietnam. VASEP also said that this country had small-scale production of tra fish, with only 12 tonnes produced annually, while Vietnam produces 1.2 million tonnes of the fish. Moreover, according to VASEP, raw material inputs in the Philippines are quite different from Vietnam, and therefore, choosing the Philippines as a model for calculation basis of the decision is definitely impractical.

To cope with the situation, VASEP is now combining with relevant agencies and businesses to ask the DOC to reconsider its anti-dumping taxes on tra fish imported from Vietnam.

However, up to March, 2011, the DOC will trumpet its final decision on this issue. If this new tax level remains, Vietnam’s tra exports into the US will be seriously affected, because this market now accounts for over 10 per cent of Vietnam’s total tra export turnover.

Local seafood exporters are also facing with challenges related to the European Union’s Illegal, Unreported and Unregulated Fishing (IUU) regulation, which took effect from January 1, 2010. This regulation is applied to all foreign imported aquatic products, in order to halt the import of IUU aquatic products into this market.

Under this regulation, seafood imported into the EU market must have certificates of origin and the fishing vessel’s registration.

The EU currently accounts for one-third of Vietnam’s seafood exports. Vietnam will face many difficulties in applying the IUU rule as the fishing industry is not yet developed on a large scale, according to the Ministry of Agriculture and Rural Development (MARD).

VASEP said Vietnam was home to about 130,000 fishing boats of different sizes and poor equipment, with fishermen having limited knowledge. As a result, it would be very difficult for exporters to obtain certificates of each aquatic batch.

In fact, in 2010’s first half, Vietnam’s seafood exports to the EU reached $133 million, down 11 per cent against the same period last year. The reduction was attributed by VASEP to many causes, but largely the IUU regulation.

Another problem worrying local exporters is that the MARD has recently applied a regulation that foreign countries home to seafood material suppliers to Vietnam are required to send the list of these suppliers to Vietnam’s authorities. The move aims to check problems about food hygiene and safety.

However, the number of countries meeting the MARD’s requirement remains limited, and this will badly impact many seafood processing companies in Vietnam, which annually import a great deal of raw materials from foreign countries, according to the MARD’s National Agro-Forestry-Fisheries Quality Assurance Department (NAFIQUAD).

NAFIQUAD’s vice head Phung Huu Hao said that up to early September, 2010, only 10 countries registered with Vietnam’s authorities.

“The countries registering and accepting Vietnam’s new regulations are those with a considerable raw material export turnover to Vietnam like Canada, Australia, Denmark and Japan. They have recognised that Vietnam’s regulations are in line with the international practice,” Hao said. – VIR

Tags: Vietnam Seafood, Vietnam seafood exports