The export of catfish: too many difficulties

The anti-dumping tax announced by the US Department of Commerce (DOC) has made Vietnamese catfish enterprises worry because it is difficult to export to the market,  strongly affecting the Vietnam’s catfish industry.

Processing catfish for exports

Incorrect tax rates

The US Department of Commerce (DOC) has released the final results for the 13th review period for export shipments from August 1, 2015 to July 31, 2016. Under this decision, the tax rate of $US 3.87/kg is applied to Godaco Seafood JSC – the company was selected for dossier consideration. Also due is one selected company for reviewing, the DOC also applies this tax rate to the rest of the companies. Compared to the tax rate of $US 0.69/ kg in the 12th review period (POR12), the current tax rate is 5.61 times higher. This is a record high tax rate and is also higher than the national tax rate of $US 2.39/kg that the DOC applied to the companies who do not enjoy a separate tax rate in the anti-dumping case of Vietnam catfish.

After the US announced the tax rate above, the Ministry of Industry and Trade, Vietnam Association of Seafood Exporters and Producers (VASEP) and catfish export enterprises think that the tariff is unreasonable and have some initial reactions. According to catfish enterprises, with the high tax rate above, it is unable to export Vietnam’s catfish to the US market. Mr. Duong Nghia Quoc, Chairman of Vietnam Catfish Association said that the imposition of the anti-dumping tax on Vietnam’s catfish is unreasonable as the US uses the data for tax calculation without scientific basis. The DOC has based on the available data to calculate the tariffs for Vietnam’s catfish. This shows that the over-production protection of the US is to prohibit Vietnam’s catfish exports in the market.

Vietnam’s catfish exporters said that this is the highest tax rate for Vietnamese catfish exported to the US. With this tax, Vietnam catfish is unable to export to the US, because the export price of catfish to this market is at $US 4-5/ kg. Mr. Nguyen Truong Giang, General Director of Co May Import - Export LTD Co., Dong Thap said that with the newly announced tax rate for catfish, the export of catfish to the US market is difficult because of high prices. In the United States market, only enterprises with good tax rates are able to export there, those with a high tax rate, it is difficult to export. This unreasonable calculation by DOC makes it very difficult for Vietnamese businesses to export fillets to the United States in the near future because they cannot meet the excessive margin requirement. According to Mr. Nguyen Van Dao, General Director of Godaco, with this high tax rate, it is considered that Vietnam’s catfish is unable to be exported to the US. The tax rate of nearly $US 4/ kg is equal to the export price of catfish to the US, the tax rate of nearly $US 8/ kg is more than double the export price.

Take consideration for complaint

With the imposition of unreasonable tax rates for Vietnamese enterprises, the VSAEP and catfish companies are considering to prepare the necessary legal procedures to file a complaint to the United States Court of International Trade as soon as possible.

According to Mr. Truong Dinh Hoe, Secretary-General of VASEP, the final result of the 13th review period shows the unfairness, not in accordance with the usual anti-dumping regulations and unreasonable for Vietnamese businesses. This is unprecedented, reflecting the subjective imposition and lack of discipline of the DOC.

According to the VASEP, in September 2017, the DOC released the preliminary results of the 13th anti-dumping duty on frozen catfish fillets imported from Vietnam at a rate of $US 2.39 per kilogram, equal to the national tax, making Vietnam’s export turnover of catfish to the United States continuously decline. Specifically, the export turnover of catfish to the US in 2017 decreased by 11% compared to 2016. But so far, the DOC has announced the final results of the 13th review period applying to Vietnam’s export shipments from August 1, 2015 to July 31, 2016 with unreasonably high tariffs. In addition, the DOC has made adjustments which lacks legal basis when applying the tax rate calculated on the unfavorable available factors to become the average tax rate for companies with separate rates who it is not selected to review, ignoring the usual rules when making a decision in the final result.

In fact, Vietnamese businesses do not dump catfish and that the export of Vietnamese catfish to the US does not hurt the US catfish industry, but also creates jobs for Vietnam catfish business in the United States, as well as a stable source of whitefish for US consumers with good quality at a reasonable price.

The United States is a strategic partner of Vietnam, the relationship between the two countries has made remarkable progress in recent years to promote free trade between the two countries. The VASEP said that the DOC's decision goes against the free trade process and affects US-Vietnam bilateral trade. The US market is considered as the main market for Vietnam’s catfish export, and although in recent years exporting to the US market has decreased due to many technical barriers, this is still a potential market. If we lose this market, it will affect significantly our catfish industry.