OPPORTUNITES AND THREATS FOR VIETNAMESE
SEAFOOD EXPORT TO AMERICA
Overview
It is clear that Vietnam is still an agricultural country, in which planting and farming play
an important role in the life of Vietnamese people. Although in recent years, there has been
changes in structure of economy such as the fall in the share of agriculture and the rise of
other sectors, agricultural production also provides jobs for about 60% of Vietnamese
population as well as key export commodities. However, Vietnam is not only famous as the
biggest supplier of rice but also popular with many kinds of fisheries produce like
Pangasius fillets, shrimps, cuttlefish, etc.
In line with Thailand and Indonesia, Vietnam has long been a country of strong seafood
production and export. And this continues to develop in recent years despite some unstable
conditions of international market and countless hurdles. Viet Nam is currently supplying
seafood to 156 nations and territories, with the top 10 destinations constitute 85 percent of
the total export value. In 2013, while the export value of many agricultural products
decreased sharply, that of fisheries experienced a significant increase, reaching
approximately 7 billion USD with the growth rate of about 10.7%. Also in this year, export
of Vietnamese shrimp hit the record, ranking third in the global market with over 6 million
ton and it was the first time the white-legged shrimp surpassed black tiger prawn in terms
of export quantity and value. In contrast, 2013 was considered as a dark year of Pangasius
export as the price of this product continually went down. This mainly results from the
drastic competition between Vietnamese and the US producers as CFA (the association of
American catfish producers) blamed Vietnamese enterprises for dumping.
This essay seeks to provide general research into the opportunities and threats that
Vietnamese seafood faces during recent periods. Afterwards, solutions are drawn from such
research.
Opportunities for Vietnamese seafood Export market to America:
VN’s recovery from EMS
EMS stands for early mortality syndrome of shrimps which is very dangerous disease due
to its high level of contagion. The outbreak of EMS in Asia began in 2009 with the first
case spotted in China and since then had spread to almost all shrimp exporting countries in
the continent.
Vietnam was affected by the EMS early at the beginning of 2010. During the rise of the
disease in 2009, Vietnam along with Malaysia and few other countries were hit first and
have been recovering since. However, there are two notable points here: up to 2013,
Vietnam has shown few signs of further infection and the quality of our export has been
consistent as well. Secondly, other countries are suffering greatly from EMS. As can be
seen from the two pie charts, over the period of 2008 – 2013, countries with low export
quantity lost their entire market share in America. Surprisingly, the same pattern was
applied to China. For countries such as Thailand and India, it is reported that they have just
been hit very recently. This leads to VN being able to maintain and expand our market
share in America. Ecuador, on the other hand, is bound to China large demand and
therefore has there competitiveness decreased. Indonesia, due to suspicion of EMS, have
decided to close down production in the beginning of the year 2014.
VN rising export coupled with a large increase in price because of pressing US demand
also means a huge increase in profit for us.
Nh p kh u tôm vào M b y tháng đ u năm 2013ậ ẩ ỹ ả ầ
Nh p kh u tôm vào M cu i 2013ậ ẩ ỹ ố
Vietnamese shrimps won the antidumping case
In 2004, Vietnamese shrimp officially was obliged to United States anti-dumping duty of
4.57% tax rate for the participating enterprises consider administrative 1st (16/7/2004 -
01/31/2006). From 2004 to date, over 7 review periods, along with sustained effort of the
participating enterprises to pursue litigation, DOC finally had to admit the fact that
exporters were not dumping and decided a 0% tax rate for all businesses Vietnam shrimp
exporters who participated in antidumping duty administrative review. Right after that, at
the end of 9/2013 shrimp exports to the U.S. witnessed a record increase of 138.7%
compared to the same period in 2012 and continue to keep growth above 3 numbers in the
next 2 months. Vietnam shrimp exports to this market in October & November rose by
132.5% and 111.3% over the same period in 2012.
As of 11/2013 the U.S. became the largest market for Vietnam's shrimp whose export value
to the U.S accounted for over 748.5 million, an increase of 75.7% over the same period in
2012 and accounted for 26, 7% of the total shrimp exports of Vietnam.
Xu t kh u th y s n Vi t Nam tháng 7-10/2013ấ ẩ ủ ả ệ
a) TPP prospects
Now Vietnam and the United States have been taking part in the Negotiation of The Trans-
Pacific Partnership (TPP), which is currently being held between 12 countries. The vision
of TPP is to create a new free trade area with greater trade liberalization than even WTO
and other FTAs.
Once TPP is achieved, Vietnam will be able to export to the US with a more preferential
tariff duty (could be reduced to 0%). However, import duty imposed by the U.S on Vietnam
seafood imported into the market has been relatively low already. The duty rate on live fish
is 0.3% and 4.7 % for processed seafood. Thus, there is not much benefits from TPP
agreement for Vietnam seafood exporters to the U.S. Besides, TPP regulations will support
Vietnam enterprises in importing raw seafood materials from other members. Why does
Vietnam, a seafood exporting country have to import materials from others? In recent
years, due to the instability of domestic raw fish supply, Vietnam seafood enterprises must
import raw material from foreigners to produce for re-exporting. However, a high import
duty is charged for importers in such these cases with approximately 15% for live fish and
30% for processed seafood. When TPP takes into effect, the task is much easier since
Vietnam seafood importers have to pay lower import duty to import raw material for
processing and re-exporting. Therefore, Vietnam seafood enterprises are capable of
maintaining a stable amount of exports to the US.