A Virginia-based fish importer this week received a 63-month federal prison sentence for circumventing import tariffs on 10 million pounds of frozen fish fillets from Vietnam. Peter Xuong Lam, president of Virginia Star Seafood Corp., was also ordered to reimburse the U.S. government about USD 12 million (EUR 8.7 million) for his role in mislabeling pangasius as flounder, sole and other species. But the trade barriers Xuong and his business partners skirted, however, are rightfully coming under fire.
A Wall Street Journal-Asia editorial on Wednesday detailed what it said is a failed strategy on the part of the U.S. catfish industry to compete with Vietnamese pangasius, a fish so similar to catfish — whiskers and all — that it was once called just that. Having visited pangasius farms and processing plants in the Mekong Delta, I can attest that the look, feel and taste of the fish raised there are strikingly similar to the species that’s been farmed stateside for decades.
Because catfish and pangasius compete mainly on price, the imports hold an advantage thanks to lower production costs: Frozen pangasius fillets currently wholesale for about USD 2 (EUR 1.45) a pound while U.S. product is closer to USD 3 (EUR 2.18). This fact has never been lost on the U.S. industry, which in 2002 lobbied Washington to have the “catfish” name reserved solely for channel catfish (Ictalurus punctatus). A year later, the Catfish Farmers of America filed an antidumping petition that resulted in tariffs between 36 and 64 percent on all pangasius imports from Vietnam, duties that remain in effect.
Pangasius is policed by the U.S. Food and Drug Administration, as are all seafood imports. The Journal wrote that if the U.S. Department of Agriculture, at the urging of the U.S. catfish industry, interprets the 2008 Farm Bill to mean pangasius should, in fact, be called catfish once again, then this stunning about-face is nothing but “Keystone Protectionism.” While an official determination is yet to come, this name change could quite effectively block future pangasius imports because Vietnam lacks a USDA-equivalent inspection program essential for shipping products into the United States that are already produced here.
Politicking has bought the U.S. catfish industry several years to keep pangasius imports at bay (only about 5 percent of Vietnam’s production ends up in the United States, but producers there want more American business because those accounts pay better, sources say). Time and tariff payouts via the Byrd amendment created an opportunity for American catfish to forge a creative, long-term plan to attract new markets (organic?).
Tariff proponents can point to the dozen or so convictions made in the Virginia Star scheme as evidence for why such trade barriers are necessary. But the U.S. pangasius market continues to grow despite the barriers, and you have to wonder if the shrinking number of American catfish farmers can tolerate another quick fix.
Thank you,
James Wright
Associate Editor
SeaFood Business
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