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Stink Over Vietnamese Food Exports

by Ellen Hardy
13 December 2007, at 12:00am

VIET NAM - Vietnam's accession earlier this year to the World Trade Organization (WTO) was widely expected to open new and lucrative market opportunities to the country's many ambitious exporters.

But since joining the global trade club, many Vietnamese businesses now find that they are actually losing rather than gaining access to certain markets due to growing safety concerns about their products.

That's been particularly true for Vietnam's food businesses, which contribute 55 per cent of exports and around 50 per cent of total national income. In less than two decades, Vietnam has transformed itsonce centrally planned and backward agriculture sector into a major engine of export growth, in recent years surging at annual growth rates of over 20 per cent. Vietnam is currently the world's biggest pepper and cashew nut exporter, the second largest exporter of coffee, rice and seafood and among the world's leading exporters of tea, fish sauce, soy sauce, and instant noodles.

The agricultural sector still employs the majority of Vietnam's labor force, with around 11 million Vietnamese small-scale farm owners and businesses, most of whom have land holdings of less than one hectare and who operate as their own farmers and managers. As a small latecomer to several global food markets - including Japan, China, the United States, the European Union and even countries in the 10-country Association of Southeast Asian Nations (ASEAN) - Vietnamese producers are being saddled by new trade and non-tariff barriers, which are blocking the market opportunities many had banked on for their future profits and growth.

Seafood tariffs

To be sure, that was frequently the case even before Vietnam joined the WTO, particularly for seafood producers. In January 2005, the US Department of Commerce determined that Vietnamese shrimp exporters were guilty of dumping, or selling at prices below production cost which resulted in material injury to US shrimp producers. The department imposed an average 25 per cent punitive tariff rate against a number of Vietnamese shrimp producers.

Several of those sanctioned producers rebounded from the US's market-closing measures, as they were able to find new global outlets for their products, primarily in Japan and the EU.

Source: Asian Times

Ellen Hardy