US firms oppose Viet Nam shrimptax decision

Monday, Aug 19, 2013 16:46

The US is the second largest market for Vietnamese shrimp after Japan. Photo

HA NOI (Biz Hub) — Many US enterprises had rejected the levy of anti-subsidy duties on Vietnamese frozen shrimp approved by the US Department of Commerce last week, according to Voice of Vietnam Radio.

Due to the DOC's decision, Minh Quy Co. - a subsidiary of Minh Phu Seafood Corp. - will be taxed 7.88 per cent on frozen shrimp exports, Nha Trang Seaproduct Co. will pay 1.15 per cent, while others will be taxed at around 4.52 per cent. The decision was made following an investigation into recent petitions from shrimp producers and packagers under the US-based Coalition of Gulf Shrimp Industries (COGSI).

However, Viet Nam will not actually be levied on its shrimp products unless the US International Trade Commission (ITC) confirms that US enterprises are suffering losses due to government-subsidies for foreign exporters, including Viet Nam.

In the event the ITC decided that US enterprises do not suffer losses, the lawsuit would be stopped and the duties lifted.

The ITC's decision is expected on October 3.

In the final hearing before the DOC last week, a representative of the plaintiff - US-based Coalition of Gulf Shrimp Industries - claimed the government-subsidy creates unfair competition between farm-raised and natural shrimp, causing big losses for the US shrimp industry.

The plaintiff said the duties on anti-subsidy would be a necessary mechanism to protect the interest of domestic producers, processors and consumers. However, this view was opposed by US importers and distributors, as well as economists.

Fishery Manager of Sysco group, one of the biggest shrimp suppliers in the US, Eric Buckner said his group clearly defined imported farm-raised shrimp, natural shrimp and their origins.

Buckner insisted that farm-raised and natural shrimp were different types of products for different customers, implying they cannot be deemed to be competing with each other.

Echoing Buckner's view, the Fishery Manager of Publix Super Markets - one of the top 10 supermarket chains in the US - Guy Pizzuti said he had never considered farm-raised and natural shrimp to be direct competitors. His company had different marketing and distribution strategies for each product, while their suppliers of the two products had not competed with each other, he added.

Jeff Stern, Vice President of the Censea Fishery Company, said his company had bought very little from American shrimp suppliers as they could not guarantee the required volume and quality.

He said the ultimate task was to guarantee stable supply, quality and quantity a task he deemed beyond domestic enterprises' current capacity.

James Dougan, an expert from Economic Consulting Services claimed statistics showed over the last three years that the US market share of the shrimp industry and output had remained stable, while US customers' consumption rate had not decreased.

Almost all US enterprises' shrimp prices had increased, as had the numbers of workers, working hours and wages – from between 3.5 to 10 per cent – Dougan added. In addition, domestic enterprises had also received compensation of more than US$100 million after the 2010 BP oil spill, he said.

On its website, the US National Fisheries Institute stated the US shrimp industry needed to seek long-term measures to maintain its competitiveness, rather than appealing to the government to impose anti-dumping or anti-subsidy tariffs on imported products.

The DOC's decision also levied duties on Malaysia, China, Ecuador and India, ranging from 10.54 to 54.5 per cent. — VNS

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