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The Mississippi-Mekong Catfish Wars |
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By Shalmali Guttal |
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“Much
more is at stake here than trade in strange-looking fish with whiskers.”
On 28 June, 2002, the Catfish Farmers’ Association (CFA) of the United States of America (USA) and eight seafood production companies lodged an application with the US International Trade Committee (ITC) to sue the Vietnamese Association of Seafood Exporters and Processors (VASEP) for dumping catfish products in the U.S. They claimed that since the catfish produced by them counts for 85.7 percent of the total U.S. market, they were in effect acting on behalf of all catfish farmers in the U.S. The defendants named in the case are 56 seafood processors in Vietnam, although some of the named firms have nothing to do with the varieties of catfish produced for export in Vietnam. The dumping charges have shocked the VASEP, Vietnamese Government and practically all those familiar with the catfish industry in Vietnam, including the US Embassy and a number of US businesses based in Vietnam. There are clearly no acceptable, rational reasons for such a case. Vietnam has been in transition from a centrally planned to a market economy since 1986 and for all practical purposes, is now a market economy. It is under an IMF-World Bank structural adjustment regime and has dismantled whatever meagre subsidies it was able to provide in the past to its agriculture producers and fishers. In fact, proof of Vietnam’s status as a market economy was one of the preconditions of the US-Vietnam bilateral trade agreement that was signed by the two countries in 2001. And in any case, compared with the US, Vietnam is a poor country, and simply does not have the resources to provide its productive sectors with the levels of subsidies and supports that the US provides to its own producers.
The Vietnamese Government has hired an U.S. law firm--White and Case Law
Corporation--to contest the antidumping charges. On 15 July a Vietnamese
delegation went to the U.S. to negotiate an informal resolution to the
dispute. On 19 July, the ITC conducted a hearing in Washington DC on the
case in which, Vietnam’s Ministry of Trade presented evidence that
showed that Vietnamese exports of Basa and Tra fish (the varieties exported
to the U.S.) function according to market principles (the arguments presented
by the Vietnamese can be found on the website http://www.vietnamembassy-usa.org/news/.
But the ITC was not convinced and on 24 July, the Department of Commerce
(DoC) issued a notice that it was officially initiating an antidumping
duty investigation on the case. In the week of Sept. 16, delegates from
the ITC will begin their official investigations on the dumping charges
against Vietnam. The Mississippi Connection The antidumping case brought by the CFA consortium is the grand finale in a series of tricks and melodramas that the US catfish lobby has initiated over the past eighteen months. Initiated by commercial fish producers and agribusiness, and led by US Congressional members in the six Southern states of the U.S., the catfish lobby has persistently attempted to ban the imports of catfish products from Vietnam and expand its own share of the fish market. First, the catfish lobby charged that catfish produced in Vietnam was raised in unhygienic conditions and not fit for U.S. consumption. Senator Marion Berry even alleged that catfish raised in the Mekong basin was poisonous because of the huge amounts of Agent Orange that was dumped into the Mekong River by US Airforce pilots. These claims were refuted by the US Embassy in Vietnam, which undertook an examination of production conditions and concluded that the quality of Vietnamese catfish farming in the Mekong basin was beyond reproach. Next, in late 2001, a group of U.S. lawmakers led by Senator Jesse Helms claimed that Vietnamese catfish was scientifically not catfish at all and must not be sold in the US labeled as catfish. The group introduced language in the US Agriculture Appropriations Bill that required the U.S. Food and Drug Administration (FDA) to process only certain types of fish raised in North America—specifically those that grow in the six southern U.S. states—as catfish. The language also sought to impose a ban on the import of Vietnamese catfish on grounds of health and labeling. Several well positioned U.S. policy and lawmakers were aware of the interests guiding the Mississippi catfish mafia’s almost hysterical obsession with Vietnamese catfish. U.S. Senators McCain, Gramm and Kerry strongly opposed the catfish lobby’s moves and pointed out that Southern agribusiness interests had embarked on a campaign of misinformation and fear-mongering in an effort to unfairly gain monopoly of the U.S. catfish market, and to shut out any legitimate national and international competition. In their rebuttal, they brought as evidence the assessment of U.S. agriculture and industry officials at the U.S. Embassy in Vietnam, who had investigated the Vietnamese catfish industry in depth. According to the U.S. Embassy, “In the case of catfish, the embassy has found little or no evidence that the U.S. industry or health of the consuming public is facing a threat from Vietnam’s emerging catfish export industry…Nor does there appear to be substance to claims that that catfish raised in Vietnam are less healthy than [those raised] in other countries.” (Quoted by Senator John McCain in a statement on 18 December, 2001). The US Embassy reported that: a) according to their experts the Vietnamese Government provides no direct subsidies to the catfish industry; b) the embassy was unable to find any evidence that Vietnamese catfish are of questionable quality and may pose health risks, and that the quality standards of catfish production in Vietnam had been confirmed by US FDA officials; c) they found no evidence that Vietnam is deliberately directing catfish exports to the US to establish market share, and ; d) the Vietnamese had already reached an agreement with the US FDA on a labeling scheme to differentiate Vietnamese catfish from American catfish in US retail markets. In a statement issued on 18 December, 2001, Senator McCain also strongly objected to the xenophobic nature of the US catfish lobby’s advertising campaign to promote the claim that catfish raised in the Mississippi mud are the only fish with whiskers safe to eat. He slammed an advertisement that ran in the national trade weekly Supermarket News that read: “Never trust a catfish with a foreign accent…They’ve grown up flapping around in Third World Rivers and dining on whatever they can get their fins on…Those other guys probably couldn’t spell U.S. even if they tried.” Despite their attempts, Senators McCain, Gramm and Kerry were unable to muster enough support to defeat the U.S. catfish lobby. The Mississippi connection proved stronger than U.S. Congress’s interest in doing right by a fish with a foreign accent. With little review and no debate about the fallaciousness of the catfish lobby’s claims, in December 2001, U.S. Congress passed an amendment banning the use of the term “catfish” to describe a fish product, unless it originated in the U.S., thus shutting out of U.S. markets catfish raised in Vietnam or any other country. Since then, Vietnamese catfish exported to the US are labeled only as Basa and Tra without the suffix “catfish.” But even this did not mollify the southern catfish lobby. Vietnamese catfish—even if not called catfish anymore in the U.S.—is popular in North America not only because of its price, but more importantly, because of its taste. According to North American seafood importers, catfish from Vietnam has a special flavour and colouring, and is lean. The strong flow of the Mekong River makes the fish significantly fresher, cleaner and tastier than fish that are raised in stable still ponds. Unable to withstand the competition from a good-quality, well-priced product, the U.S. catfish lobby started to prepare its case against Vietnamese seafood exporters for dumping and on 28 June, it struck. What’s at Stake? Catfish farming has been a traditional means of livelihood for farmers in Vietnam’s Mekong Delta for generations. Not only is fish the primary source of protein for residents in the delta and other parts of the Mekong basin, but also, fish and fish products are important sources of income for most rural families in the Mekong Delta. Fish farming for the most part has been small-scale and artisanal, and in recent years, Vietnam has also started to export catfish. The main markets that Vietnamese catfish is exported to are the U.S., the European Union (EU), Japan and Hong Kong. At present, Vietnam supplies about two percent of the U.S. market, priced at about US $ 500 million. Recent research conducted by a team supported by Actionaid Vietnam -- a Non-Governmental Organisation operating in Vietnam -- shows that raising Basa and Tra catfish is the sole occupation for most of the fishers in the Mekong Delta. If catfish trade declines because of a change in trade agreements or a huge increase in tariffs, fishers will not be able to switch to a new occupation with ease. Most fishers do not have sufficient land, or the required skills and experience for alternative agricultural production, nor do they have the options of other occupations by which to earn income. And since much of the fish raising is artisanal, most fishers do not have sufficient reserves of capital or assets that can tide them through rough times. In addition, the Tra and Basa processing and export sectors employ over 10,000 workers across the Delta in a range of activities from directly raising catfish to selling fish feed, providing small-scale finance, credit and veterinary services. These include labour from local communities as well as migrants from neighboring districts and provinces. Incomes range from approximately US $ 36 to US $ 79 per month, depending on the activity and volume of work. For many workers, these wages are the sole source of family income and this industry is the only one they are skilled in. The Actionaid team estimates that the total number people who depend completely on the catfish farming sector—from artisanal fishers to workers and service providers--is not less than 20,000 people. A decline in the catfish processing and export sector is likely to result in destitution for thousands of families. Fishers are expected to meet food safety and hygienic standards set by the Ministry of Fisheries and other relevant authorities before their products can be accepted by processors and exporters. The processors and exporters are also subject to food safety and hygiene rules, ISO standards and specific procedures for fisheries processing before they are permitted to export their products. Producers and business owners have to invest significant amounts to meet the required standards and also absorb the losses incurred by rejected products, and fluctuations in price and demand. Unlike their U.S. counterparts, they do not get subsidies, risk protection and other domestic supports from their government. The Actionaid research also shows that neither the fishers, nor the processors, service providers or exporters get subsidies or preferential treatment from the Vietnamese government. They finance their operations through loans from the Industrial and Commercial Bank at market interest rates, or from local moneylenders. Many fisher households borrow from local private sources at interest rates as high as three-four percent a month since they need a steady supply of cash to keep production going. Many fishers and household processing enterprises have taken large loans to expand operations and capacity, with the hope that they can increase incomes and better their standard of living. A sudden decline in fish trade will render their debts non-repayable and place severe financial and social stress on families. Families are already reporting economic pressures from the reduction in export volumes in the last quarter of 2001, when the U.S. banned the use of the catfish label on Vietnamese fish products. Why is the price of catfish produced in Vietnam lower than catfish produced in the U.S.? A number of reasons. Local fishers have accumulated generations of knowledge and skills in how to increase productivity with lower input costs. The natural conditions of the Mekong River are extremely favourable for small-scale fisheries. Because of the microclimate, fish can be raised throughout the year and the swift water currents keep the water well ventilated and help fishers to raise fish with high body weight. Also, fishing and fish processing are largely family occupations and every member of the household is involved in some aspect or the other of raising and processing fish, thus keeping labour costs down. Fishers have also started to breed new varieties that reproduce faster and can be harvested more quickly. An important finding of the Actionaid team’s research is that actual costs of raising and processing fish are not decisive factors in the pricing of exported fish products in the U.S. The U.S. importers agree to buy fish products at a certain price from the Vietnamese exporters and add their own mark-ups in the U.S. market. Benefits of competition among fish retailers in the U.S. do not go to the fishers and fish processors in Vietnam, but to U.S. importers and retailers. Big Fish Eats Small Fish The consequences of the penalties that the U.S. may impose on Vietnam if it finds that the dumping charges are substantiated will cause levels of damage among the communities of the Mekong Delta that U.S. fishers in the Mississippi basin cannot even imagine. It is doubtful that U.S fishers know that their “competition” at the other of the world consists mostly of families who live on less than US $ 300 a month. There is clearly no reasonable basis as yet for substantiating the charges of dumping on VASEP. In general, the catfish wars that the U.S. catfish lobby has waged against the Vietnamese smack of xenophobia and ignorance. Launched as the ink on the U.S.-Vietnam bilateral trade agreement was barely dry, the catfish wars show yet again what the U.S version of free and rules based trade means: free for U.S. business interests to do as they please since they get to make the rules up as they go along. For those whose livelihoods depend so completely on the catfish industry in Vietnam, the charges of dumping brought by a consortium of wealthy agribusinesses in the U.S.—a country notorious for rampant protectionism and aggressively defending its corporate economic interests—is truly a case of “big fish eats small fish,” whether or not the fish is labeled as catfish. The only dignified way forward for the U.S. is to completely dismiss the dumping charges against VASEP and to adhere to the rules that it insists others comply with. The author
kindly thanks Vachararutai Boontinand and members of the Actionaid Vietnam
team for the information and support they provided regarding this case.
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