Catfish exports to US face shutdown in 2017
VOV.VN - Vietnam catfish exports to the US market face being shut down this coming September 2, after efforts to abolish a program shifting regulation of catfish producers to the US Department of Agriculture (USDA) fails.
The US Congress considered repealing the program shifting the responsibly for regulating imported and domestic catfish operations from the Food and Drug Administration (FDA) to the USDA.
The FDA has traditionally regulated seafood, while the USDA regulates meat. The new program essentially redefines the definition of meat to include fish, subject to much more stringent USDA regulation.
In May 2016, the Senate had voted to eliminate the change. However, in December 2016 the US House of Representatives leadership declared they would not bring the matter to the floor and allow for a vote.
When Congress adjourned in December 2016, this essentially killed any chance of eliminating the program through congressional legislative action— meaning that the new catfish program is here to stay for a while, say the experts.
Though many leading critics of the program have declared it – ‘wasteful,’ ‘protectionist’ and a ‘blatant trade barrier’ – specifically aimed at helping the US farm raised catfish industry, there does not appear to be any reasonable possibility of it changing in the foreseeable future.
The USDA transition period for the change ends on September 1, 2017.
This means that Vietnam as an exporting country of Siluriformes – the scientific name for pangasius and other catfish – needs to apply for a grant of equivalence to the USDA by August 31, 2017.
A grant of equivalence by USDA means that the US government deems Vietnam’s food safety system its equal, the experts underline.
At any time after the submission of the application by the Vietnam government, the USDA could either say they would work with the government to suggest changes to their system that would make them USDA equivalent or they could terminate all exports in their entirety.
There is no reason not to believe the USDA would not work with the Vietnam government to bring its system into compliance with the new USDA standards. It is also important to note that no one is suggesting that the catfish industry standards in Vietnam are in any way inadequate.
The problem is that achieving USDA equivalence requires changing laws and regulations that were designed by the Vietnam government to meet FDA standards, which now must be changed to comply with the USDA standards.
This is by any measure a huge undertaking, note the experts.
Getting equivalence to the USDA could be a time consuming and difficult process requiring a lot of political will, said Sang Phan, president of the US arm of Vinh Hoan, one of the largest pangasius producers in Vietnam.
With the time frame and deadline date of September 1, it will be an extremely tough challenge for the Vietnam government to get its USDA equivalency grant, Phan added.
Pertinent parties within Vietnam have been taking a variety of actions, such as working with USDA representatives on implementing self-reporting tools, which is a major piece in the equivalency review, noted Phan.
Much has been accomplished, but more need be done and we are hopeful for a favourable ruling by the USDA by the deadline, he said. The risk for both sides of an end to trade is considerable.
In 2016, the US imported 322,000 metric tons of pangasius catfish from Vietnam, in whole fish equivalent, according to official US data. That is around 26% of the total production of Vietnam, which was 1.22 million metric tons through October, according to the data.
Even if approval wasn’t obtained by the deadline, Phan said US customers could stock up on inventories in the run up to the deadline date to buy a little extra time to get the USDA equivalency approval.
In the time leading up to September, with proper planning, Vietnamese sellers could work with US customers to make sure their need is met, he said, noting it’s possible to shuffle supplies from other countries to the US market.
In other words, the situation Phan is referring to is that if Vietnam’s approval was on track for November 1, that would mean there would be a 2-month export ban (September 1 – November 1).
He is suggesting that US customers could purchase sufficient inventories to cover the 2-month period prior to imposition of the export ban of September 2.
Alternatively, said Phan, the Vietnam government and businesses in the industry are hopeful that other markets could pick up the slack, if the worst-case scenario that imports into the US are terminated, if only temporarily, were to become a reality.