Abstract

The “Vietnam Catfish war” was a famous yet controversial case in recent trade disputes. The U.S. Anti-dumping law protects American industries from supposedly unfair import competitions (Lindsey, 1999, p.2). On June 28, 2002, the coalition Catfish Farmers of America (CFA) and eight individual fish processors filed an anti-dumping petition against imports of “certain frozen fish fillets from Vietnam” under the US. Anti-Dumping Law to the Department of Commerce (DOC) and the International Trade Commission (ITC) (Le, 2004, p.1). Over one year after the original investigation conducted by the US. DOC, the case was finally concluded with the imposition of anti-dumping duties on imports of fish fillets from Vietnam. The range of the duties is between 37 and 64 percent on value of imports (Reynolds & Su, 2005, p. 40). This is what the US. Government said, is it true that the Vietnamese government subsidizes Vietnamese firms in Mekong Delta to unfairly gain a better market share in the U.S.? Or is it just the result of domestic political lobby in the U.S.? This paper will try to discuss related issues surrounding the story of that catfish war.

The paper will go through the steps used in the class: issue, rules, analysis, and conclusion (I.R.A.C).

Introduction the ISSUE

Raising catfish is an important source of income for households residing in the Mekong Delta in Southern Vietnam for more than 50 years (Nguyen, Nguyen & Phillips, 2004, p.20). Catfish is also produced in the Southern United States where it is a major source of income for fish farmers in Mississippi, Arkansas, Alabama and Louisiana (Hanson, 2005, p.1). In 2002, aquatic products represented 12 percent of total exports from Vietnam, and export value frozen fillets (mostly catfish) is 18 percent of the total value of aquatic exports (VASEP website). The increase participation of cheaper Vietnamese catfish in the U.S forced the Catfish Farmers of America (CFA) to lead a move to halt catfish imports. First, Vietnamese products were forced to be labeled as “Tra” and “Basa” instead of “Catfish”. Second, on the ground that Vietnamese government subsidized Vietnamese catfish farmers, in January 2003, the U.S. Department of Commerce ruled in favor of the antidumping claim and established duties ranging from 37 to 64 percent on imports of frozen catfish from Vietnam (Reynolds & Su, 2005, p. 40). In July 2003, the U.S. International Trade Commission ratified the ruling. As a result, Vietnamese exports of catfish to the U.S. plummeted, almost being shut down completely.

Other facts

According to the U.S. International Trade Commission, the catfish industry is the largest farm-raised fishing sector in the U.S. In 1999, it accounted for 80 and 64 percent of aquaculture production in volume and value, generating 440 million U.S. dollars (Hanson, 2005, p.1).

The delta of the Mekong river, in South Vietnam, also provides a good habitat for catfish. Known as Basa and Tra, Vietnamese catfish raised in ponds and cages that are placed in the river itself. In 1996, two years after the trade embargo of US. against Vietnam was lifted, Vietnam started exporting frozen fillets of Basa and Tra to the U.S. with sales of a few hundred tons and initially marketed as “Chinese sole”. West Coast Chinese restaurants responded allowing Basa to take one percent of the US. catfish market (Nguyen, Nguyen & Phillips, 2004, p. 22). The level of exports increased significantly in the early 2000s, reaching a market share in U.S. consumption of catfish of 8.4 percent in 2000 and 19.6 percent in 2002 (Hanson, 2005, p. 4). Also between 2000 and 2002, Vietnamese production capacity expanded by 100 percent, and approximately 50 percent of Vietnamese Tra and Basa was sold in the U.S. market.

The increasing popularity of Vietnamese catfish raised the concern of the Association of Catfish Farmers of America (CFA), and the CFA took action. At fist, by forcing Vietnamese catfish to change names from “Catfish” to “Basa” and “Tra” by the new labeling law being instituted in January 2002 (Reynolds & Su, 2005, p. 37). The trade description legislation was used to restrict the name of “catfish” solely to Ictalurids grown in the USA, while “Basa” and “Tra” are also freshwater fish of same family. “Basa” (Pangasius Bocourti) and “Tra” (Pangasius Hypophthalmus) are among 35 other types classified by the name in English “Catfish” (Nguyen & Doan, 2004, p.21).