TPP: Not all doom and gloom for Vietnam’s beef industry

They say this result comes about because the US already has free trade agreements with Canada, Mexico, Australia, Peru, Chile and Singapore, and import duties on US beef are already zero in New Zealand and Malaysia,

Vietnam is currently a relatively small but promising market for US beef they say, citing US official statistics that show in 2014 US beef exports to the Southeast Asian nation totalled just 2,869 metric tons valued at US$22.1 million.

For comparison purposes, those same statistics reveal shipments to Japan, the leading market for US beef and beef variety meat exports in 2014 totaled 241,129 metric tons valued at US$1.6 billion.

The pace of US consignments to Vietnam has picked up momentum in the eight months leading up to September with the cumulative year-to-date totals reaching 2,444 metric tons valued at US$19.8 million.

Vietnam’s current duty rate for frozen muscle cuts is 20% and its rate for offal (organ meats) is 15%. Under the TPP, Vietnam’s tariffs will be phased out over a three to eight year period.

But the experts say it is important to note that through a regional free trade agreement, Australia and New Zealand already have reduced tariffs for beef entering Vietnam, with duties on muscle cuts and offal set for elimination by 2018 and 2019, respectively.

No one really thinks that Vietnamese beef ranchers could compete in a post TPP world with US or Australian raised beef in the short-term and it would be pure folly to suggest that they could.

Both American and Australian beef benefit tremendously from decades of genetic technologies and selective breeding the experts say, concepts barely heard of in Vietnam, much less practiced.

“The Vietnam beef industry will face a vast number of challenges should the TPP be ratified,” said Minister Cao Duc Phat of the Ministry of Agriculture and Rural Development at a recent meeting in Hanoi discussing the trade accord’s potential impact.

Minister Phat said the strategy to develop the beef industry must undergo a thorough overhaul in order to be able to survive the competitive challenges stemming from the pact.

But it certainly doesn’t follow that the TPP spells the death knell for beef industry by any stretch of the imagination say leading US experts— as smallholders in the US market compete quite effectively with their larger counterparts.

The fundamental problem the Vietnam beef industry faces is an emphasis on – quality –  which can be improved by implementing the same technologies currently employed by US and Australian ranchers.

Hoang Anh Gia Lai (HAGL) Joint Stock Company is a prime example of doing just this.  Earlier this year HAGL marked a turning point in the beef industry in Vietnam with the establishment of a ranch in Gia Lai Province following Australian ranching methods.

Company officials have also announced plans to import breeding stock from the US to supplement their Australian stock for their ranches and expect to have the first feeder cattle hitting the market in 2017.