http://vibforum.vcci.com.vn/the_news.asp?idnews=80
JULY,17,2004

Vietnamese Shrimp in Search of New Markets

On July 7, 2004, the US Department of Commerce (DOC) announced a preliminary ruling on tax rates regarding Vietnamese and Chinese shrimp. It is an unfair ruling on Vietnamese shrimp. What will happen to Vietnamese shrimp exports to the US and what should Vietnamese managers and enterprises do?

Unjust tax rates

According to the DOC ruling, the tax rates levied on Vietnamese shrimp exporters will range from 12.11 - 93,13 per cent. Vietnam's Aquaproducts Processing and Export Association (VASEP) has discussed with lawyers ways to formulate their views and protest against the heavy and discriminate tax rates on Vietnamese shrimp. VASEP is also preparing to receive the second DOC inspection team to clarify their position on the lawsuit. The final decision of DOC will be made on November 24, 2004 and the tax rates will be applied after the judgement of ITC. VASEP is consequently preparing a presentation for ITC on whether or not Vietnamese shrimp threaten or harm the interests of the American shrimp sector.

Fierce competition in the American marketVASEP Deputy Secretary General Truong Dinh Hoe said that although the average tax rate imposed on China is higher than Vietnam, it bears no relevance to competition between the two suppliers, as China only exports The shrimp while Vietnam exports prawn to the American market. There will therefore be no competition with China. Bangladesh and India with their different kinds of products are also not competitors to Vietnam. The real competitor of Vietnamese prawn is Thailand, but the tax rates imposed on Thailand are still unknown (to be announced on July 28, 2004). If the tax rate is under 10 per cent, it will be difficult for Vietnam to compete with Thailand in the American market. As the price of Thai shrimp is higher than that of Vietnam by 5-20 cents a pound, the application of new tax rates would obviously undo this advantage.

Seeking new markets

The US remains the main market for Vietnamese shrimp. This is precisely the problem for Vietnamese enterprises and the reason that DOC has applied unjust tax rates. Mr Vo Hue Tran, director of the Coastal Economic Development Company (Cofidex- HCMC) protested, saying, "the tax rates imposed on Vietnamese shrimp by the DOC are utterly unjust. Not only for my company, which has been subjected to the highest tax rate, but even to enterprises with a tax rate of 16.11 per cent can no longer export shrimp to the American market. Last year, Cofidex exported some 47 per cent of its total export to the American market. Faced with this new situation, we shall have to turn our exports towards the Japanese market." Mr Nguyen Tin Nguong, the deputy director of Ca Mau Aquaproduct Processing and Import-Export Company (Camimex) said, "We are looking for new markets in Europe and Asia. Exports to the American market will be reduced from 40 per cent to 30 per cent, whereas exports to Asia (mainly Japan) will increase from 30 per cent to 40 per cent. The company is also seeking new markets in Asia to ensure stable production of the Ca Mau farmers."

It remains a problem for managers and enterprises to expand their markets. It requires more promotional activities to create more opportunities for enterprises to contact clients and secure a stable foothold for Vietnamese shrimp in the world market.

Free Trade with US. VIR-news
Shrimp industry hit hard by US

American consumers, shrimp distributors and Vietnamese farmers and processors can all expect to lose from the US Department of Commerce (DoC) decision to levy punitive “anti-dumping” taxes on Vietnamese shrimp imports.
The DoC last week announced a preliminary finding that Vietnamese and Chinese exporters had sold frozen and canned warmwater shrimp on the US market at less than fair value and imposed tariffs ranging from 12.11 per cent to 93.12 per cent for imports from Vietnam.
According to the American Seafood Distributors Association (ASDA), these duties would take effect in approximately one week but the department refused the US shrimpers’ demands that these duties be applied retroactively to Vietnam.
Vietnamese processors could find allies in the US who protested the DoC’s preliminary decision, claiming the proposed tariffs of up to 93 per cent would dampen demand for Vietnamese shrimp and lead to higher prices for American consumers.
The American Chamber of Commerce (AmCham) in Hanoi said the preliminary decision was very troubling and a needless tax on American consumers.
“It is not only American consumers who stand to lose from this shrimp decision. US and Vietnamese workers and businesses will also lose if these extremely high tariffs are allowed to stand,” said AmCham chairman Terence Anderson.
Wally Stevens, chairman of the Shrimp Task Force, established by the Consumer Industries Trade Action Coalition (CITAC) and ASDA to fight anti-dumping taxes on shrimp imports, asserted his group would continue fighting against dumping duties on imported shrimp.
Stevens claimed the preliminary calculation of dumping rates is unjustified and troubling in that it needlessly penalises both American consumers and workers in the shrimp consuming industry across the country.
“Imposing duties of any size on shrimp imports from any country is unwarranted and simply wrong,” he said, claiming the duties would hurt US consumers, restaurants, grocery stores and other industries.
The Shrimp Task Force recently released analyses that found that antifood taxes imposed on shrimp imports would cause prices for all shrimp sold in the US to soar by as much as 44 per cent, leading to a one-third fall in consumption.
VASEP, an organisation that represents Vietnamese seafood exporters and producers, said the DoC’s decision was unfair and would have adverse consequences on millions of shrimp farmers in coastal areas and thousands of workers in shrimp processing factories in Vietnam.
VASEP asserted that its members did not undercut shrimp prices in the US and the DoC had ignored the competitive advantages of shrimp farming in Vietnam brought about by the application of modern technologies, low labour cost and a favourable natural environment.
“The absurdly high dumping margins in the DoC decision is a protectionist measure, going against liberalised trade and the spirit of fair competition,” it said in a statement.
VASEP general secretary Nguyen Huu Dung said there was no reason for Vietnamese businesses to suffer from higher tariff levels. The 12.11 per cent to 19.6 per cent ranges are to be applied to four companies, including Minh Phu Seafood Corporation, Kim Anh Co, Minh Hai Joint Stock Seafood Processing Co and Camau Frozen Seafood processing Import-Export Corporation.
A separate rate of 16.01 per cent was assigned to 17 companies while a Vietnam-wide rate of 93.13 per cent was applied to other companies.
“This is just a tactic to create infighting between the Vietnamese shrimp business circle,” Dung said.
Do Ngoc Quy, general director of Kim Anh, the biggest private seafood exporter in Vietnam with annual revenue of more than $100 million, said the tariffs would cut the company’s competitiveness in the US even though it suffered the lowest tariff level of 12.11 per cent.
“A DoC delegation will come to Vietnam in the future and we will give evidence and ask them to abolish this absurd tax,” said Quy.
However, what Vietnamese producers are more concerned about now is the tariff levels the DoC would determine on shrimp imports from four other countries: Brazil, Ecuador, India and Thailand. The DoC is due to issue determinations on shrimp imports from those countries on July 29. Dung said the high tariff imposition on any countries would create advantages for the remaining countries with low taxes.
VASEP said its members would continue fighting against the imposition of the “anti-dumping taxes” before the DoC and US International Trade Commission (ITC).
The DoC is due to issue final determinations on dumping margins in November after considering comment from interested parties on its preliminary decision. If it makes affirmative determinations, the ITC is scheduled to make its final injury determination on January 2005.

By Ngoc Son

whats wrong with that. we americans dont believe in free trade

Thank god my uncle in Vietnam stop cultivating shrimp already.

Vietnam has a tendency to overproduce. A few years ago, I saw lots of people cutting off everything and planting fruit trees when I visited VN. Now everyone is raising catfish and shrimps. Overproduction just drives the prices down.

yah, we call it "theo phong trào" 2 2 we're all copycats

Believe me that Vietnam will find a way out of this. Shrimp export isnt that much of the national economy anyway (even the whole chan nuoi trong trot industries).

It will only make Vietnamese to feel closer to China than to the US. What does the US have to contribute to Vietnam anyway, not much-but destruction of our soil and economy?

But we will try to be nice to them so we get stronger; then we can criticise them better

china is nasty in its own way too. Vietnam's markets are flooded by cheap and fake products from China. also, counterfeit dollar bills brought in by Chinese visitors (only a few got caught)

anyway, vn is not in a position to negotiate with anyone as long as we're still not in WTO.

We will be in more trouble if you get closer to china. China occupied our country for more than 1000 years and now you want to get closer to them. China has never been good to Vietnam. It has always have devious intention toward vietnam. Stop cozying up to China. If we play our card right, we can get lots of American and Western support because American is looking for some allies in SEA to counter China growth. The vietnamese government needs to stop being chinese little brother all the time.

We need to be a torn in China foot.

The reasons why a lot of people who have enough lands and money to do that was because it was very profitable. My uncle make around USD$200,000 after every seasons. It is production on a large scale. Therefore, the shrimp would be cheaper in the foreign market.

so what is he investing in now? Cá ba sa?

I still think it's unfair what they did.