High antidumping duties have Vietnam's pangasius vendors foresaking US market

Published on
March 21, 2018

Vietnam’s seafood trade group and several Vietnamese seafood trading companies are considering filing a complaint with the U.S. Court of International Trade after the U.S. Department of Commerce announced unprecedented antidumping rates against Vietnamese pangasius exporters.

In a statement released Tuesday, 20 March, the Vietnam Association of Seafood Exporters and Producers (VASEP) said it opposed the DOC’s decision, which it termed as “punitive, unfair, and unlawful.” The Vietnamese side will bring the case to the Court of International Trade as soon as possible “to protect Vietnamese enterprises’ interest,” according to the statement.

“We request the DOC to thoroughly review data and records provided by Vietnamese enterprises as a basis for calculating accurate and reasonable tax rates for those participating in the POR 13 [13th administrative review],” VASEP said.

Vietnam’s Ministry of Industry and Trade also called on the U.S. side to review the decision to make sure it is fair for Vietnamese companies. The ministry said it is working with VASEP and other relevant agencies “on measures to ensure the legitimate rights and interests of the local exporters.”

On 20 March, the DOC issued the final results of the POR 13 of antidumping duties on frozen pangasius fillets from Vietnam for the period from 1 August, 2015 to 31 July, 2016. Under the decision, the United States will impose rates of between USD 2.29 and 7.74 (EUR 1.86 and 6.31) per kilogram on most Vietnamese exporters that shipped to the country during the review. These are the highest rates ever issued by the department.

The decision and the subsequent threats of legal action by Vietnam are the latest moves in a dispute between the two countries over seafood trade issues that has grown in intensity under U.S. President Donald Trump’s protectionist policies. 

Earlier this month, the DOC announced that the calculated rate for the 12th administrative review of its antidumping order on frozen warm-water shrimp from Vietnam from 1 February, 2016, to 31 January, 2017 for Sao Ta Seafoods Joint Stock Company (FIMEX VN) will be 25.39 percent. That rate will now be imposed on other shrimp exporters from Vietnam, as FIMEX was the only mandatory respondent in the proceeding. VASEP said DOC had made a “mistake” in the review.

And in February, Vietnam filed an official complaint with the World Trade Organization against the United States, claiming the U.S. Department of Agriculture program targeting catfish inspections imposes illegal barriers to trade. The Southeast Asian nation is also seeking bilateral talks to resolve the issue.

Pangasius exporters mull suspending shipments to US

If they face the expected duty rate of USD 3.87 (EUR 3.16) per kilogram, Vietnamese pangasius exporters will have to sell their fish at prices as high as USD 8.00 (EUR 6.52) per kilo to earn a profit, Nguyen Van Kich, general manager of Cafatex Seafood JSC, told the state-run Vietnam News Agency on 20 March. 

The prices are not competitive in the U.S. market, as similar domestic products in the United States are priced at more than USD 4.00 (EUR 3.26) per kilo. Therefore, many Vietnamese exporters will have to suspend shipments to the United States and look for other alternative markets, Kich said.

VASEP said in January, while 62 companies were registered to export pangasius to the United States, only 10 were actually shipping products and just three of those businesses had “considerable export volume.”

Godaco Seafood Joint Stock Company, the sole mandatory respondent for the POR 13, was levied USD 3.87 (EUR 3.16) per kilo. The rate will now be imposed on many other exporters and is more than five times higher than the USD 0.69 (EUR 0.56) per kilo that the DOC set in POR 12.

Godaco has provided the DOC with all necessary documents and timely responses its questions, but the DOC did not fully consider the provided information and applied adverse factors available that led to the high tax rates, Godaco General Manager Nguyen Van Dao told the Vietnam News Agency.

The high rate is forcing Godaco to consider suspending shipments to the United States and instead focus more on exporting to the European Union and China, Dao said.

Ha Van Tinh, general director of Dai Thanh Seafoods Company Limited, which received the same rate as Godaco, said the new tax rate has discouraged his company from any plan to export pangasius to the United States. He said exporters are likely to see losses even at the antidumping rate of as low as USD 1.00 (EUR 0.82) per kilo.

While pangasius shipments from Vietnam to the U.S. are likely to continue to decline as a result of the new rate, shipments to Japan and the E.U. are growing. Moreover, the current domestic shortage of pangasius raw material has resulted in higher production costs and a lack of supply, Tinh said, adding that there is no need for exporters to try to do business “in the difficult place like the U.S.”

Vietnam shipped pangasius to 137 markets last year. Its total pangasius exports in 2017 were worth USD 1.78 billion (EUR 1.45 billion), up 4.3 percent from 2016. 

Of that total, the export value of Vietnam’s pangasius products to China rose 34.8 percent year-on-year to USD 411 million (EUR 335.2 million) in 2017. The U.S. was Vietnam’s second-largest market for pangasius, with USD 344 million (EUR 280.6 million) in sales, down 11.1 percent year-on- year. Sales to the E.U., hitting USD 203 million (EUR 165.6 million), were down 22.2 percent from 2016 , according to VASEP.

In spite of the difficulties in trading with the United States, Vietnam still aims to reach USD 2.2 billion (EUR 1.79 billion) in pangasius exports in 2018, which would be a  23.6 percent year-on- year increase, VASEP said.

Contributing Editor reporting from Hanoi, Vietnam

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