U.S. Risking Trade War with Vietnam over Catfish

By John Connelly, President of the National Fisheries Institute

Pangasius Farm in Vietnam

A Pangasius Farm in Vietnam. Farming the fish accounts for around 2% of the Vietnamese economy. Photo by Philipp Manila Sonderegger, used under a Creative Commons License.

No one questions the growing importance of Asiaimportance in trade, innovation, manufacturing, and strategic relationships.  The effectiveness of China’s “charm offensive” in Southeast Asia is regularly debated.  Perhaps the biggest difference between China and the United States in Southeast Asia, though, is that China has a clear and consistent strategy for the region while the U.S. seems to lurch back and forth.

An example is our attitude toward Vietnam.  While China uses “soft power” to build relationships with their neighbor to the south, the United States is considering whether or not to erect a trade barrier to one of Vietnam’s major exports to the U.S., pangasius — it’s a fish.

In 2008, at the urging of the domestic catfish industry and without debate, Congress shifted inspection of “catfish” from the Food and Drug Administration (FDA) to the U.S. Department of Agriculture (USDA).  FDA currently regulates all seafood.  USDA has no experience with fish.

Why would catfish farmers want the switch?  Because USDA uses a system of equivalence to determine which countries can export USDA-regulated products to the U.S.  No one really knows how long gaining equivalence takes, but most estimates put it at between 3-5 years (for the products USDA already knows, and recall that USDA has no fish experience).  In the meantime, Vietnamese fish would be blocked from coming into the U.S.  That is exactly what the catfish industry wants.

USDA’s proposal does not define catfish, leaving it to Secretary Vilsack to determine if pangasius will be included in the new regulatory scheme.  And Congress already provided him a road map.  Congress defined catfish to only include U.S. fish (and specifically not pangasius) in the 2001 Agriculture Appropriations bill, the 2002 Farm Bill, and the 2008 Farm Bill.  In what’s been called a “linguistic backflip” that would be “funny if it weren’t so serious” the catfish lobby now wants to make an exception to Congress’ definitions – just to protect themselves from Vietnamese competitors.

Pangasius is essential to the Vietnamese, representing about 2% of their economy.  So any effort to include pangasius in the USDA catfish inspection program will have an immediate negative impact on Vietnam.

What makes this an even crazier story is that the U.S. knows it is walking into a WTO violation.  And even USDA acknowledges Vietnam is a flourishing market for U.S. agricultural products, noting that it is “among the top markets for some commodities.”

So let’s recap:  The U.S. should counter China’s efforts to woo Vietnam, yet the U.S. wants to ban a fish that employs 1 million Vietnamese.  Congress has three times defined catfish, but now at the behest of a special interest lobbying effort, USDA debates if pangasius is a catfish. Vietnam is a growing market for American farmers, yet the U.S. invites the very WTO challenge that threatens retaliation.

Where is the U.S. government–wide strategic approach to the region?

Comments on the USDA proposed catfish rule are due 24 June.

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