Vietnam in danger of losing valuable US pangasius market
Implementation of the provisions of the U.S. Department of Agriculture (USDA)’s 2014 Farm Bill early next year could spell the end of exports of Vietnamese pangasius to the USA.
Vo Hung Dung, deputy chairman and general secretary of the Vietnam Pangasius Association, said the legislation may cause Vietnamese companies to lose the US pangasius market which accounts for 20 per cent of the country’s pangasius export value.
In March 2016, inspection of all catfish, whether farmed domestically or imported, will come under the jurisdiction of the USDA’s Food Safety and Inspection Service (FSIS) rather than the U.S. Food and Drug Administration (FDA) as it is at present. (Pangasius is now recognized as a catfish species by the FDA despite it controversially ruling at one time that the species wasn’t a catfish.)
From that date, assuming there are no setbacks in the US legislative process, FSIS will control all aspects of the rearing and processing of the Vietnamese fish from selecting seed to final product. This was according to the Vietnamese Association of Seafood Exporters and Producers (VASEP)’s general secretary, Truong Dinh Hoe, speaking at a VASEP meeting on 12 December.
Effectively this will mean that pangasius will have to be farmed in Vietnam under the same conditions and using the same measures as catfish farmed in southern US states.
It will be virtually impossible for Vietnamese farmers to replicate these conditions and therefore, as cynical observers believe has been its long time goal, the US catfish industry will have the huge US market for catfish species to itself.
It is not only Vietnamese and third country observers who take the view that this is US protectionism. John Connelly, president of the US National Fisheries Institute, said on Vietnamese Television (VTV) that this was an attempt to prevent the export of catfish from Vietnam and other markets to the USA.
The challenge for Vietnamese pangasius businesses will be large, he said, as Vietnam might take years to meet the new requirements as the FSIS regulation was very different from what the FDA required.
The most important action Vietnamese companies can take now, he added, is to work together with the Vietnamese government to send the message that it is unfair when the US government applies these regulations for Vietnamese products.
Meanwhile Hoe said the new American legislation will be contrary to World Trade Organisation (WTO) principles.
“The USDA’s final rule is contrary to WTO principles,” he told the VASEP meeting on 12 December. “American importers and customers will not be entitled to select the product they want, following the final rule.”
According to Hoe, Vietnam must now provide a list of establishments that currently export, as well as written documentation of their regulatory authority and compliance with existing FDA import requirements, before March, 2016.
Ironically the point has been made that Vietnamese pangasius farmers are now mostly Global GAP and ASC certified, whereas US catfish farmers are not certified by internationally recognized organisations. “So who grows the better fish?” one industry insider asked.
Meanwhile, two American senators have introduced a Resolution of Disapproval under the Congressional Review Act to nullify the USDA’s final rules establishing the catfish inspection program. Senators John McCain and Kelly Ayotte introduced the resolution on 8 December.
Under the Congressional Review Act, Congress can overturn actions by a federal agency, such as the USDA, after a rule is formally published and submitted to Congress.
If the resolution becomes law, it will nullify the new catfish inspection rules, which were published in the Federal Register on 2 December, including any portions of the regulations that have already gone into effect.
“We are proud to continue the fight to repeal the USDA catfish inspection office, which is an egregious waste of taxpayer dollars and a classic example of anti-free market protectionism,” McCain and Ayotte said on their website. “Over the past several years, we’ve sponsored legislation to eliminate this program and we urge our colleagues to join us in sending a message that we won’t stand for this wasteful catfish inspection office.”
The USA is currently the second largest export market for Vietnamese pangasius and the value of the country’s pangasius exports there reached USD 1.02 billion (EUR 0.93 billion) in the first eight months of this year.