With a sum volume of cultivation imports reaching
$117 billion annually, a US marketplace is any exporters’ dream market.
However, extreme foe and technical mandate are hurdles to be
overcome for any impending exporters coming this market.
Vietnam’s rural zone contingency overcome steep technical barriers in sequence to entrance a US market
The pleasant $117 billion market
According to David Lennarz, emissary authority of a US-backed
Registrar Corporation, that specialises in consulting for businesses
exporting to a US, in 2015, a world’s largest economy imported
$116.7 billion in rural products.
Of this figure, seafood
accounted for $17.2 billion, fruit and cold fruit extract $9.9 billion,
vegetables $9.9 billion, and beef products done adult $11.9 billion.
The market’s vast scale and diversified placement systems, from
giant supermarkets to tiny shops, together with 317 million consumers,
and farrago in both ambience and income levels, has held a attention
of Vietnam’s exporters of rural produce.
Over new years, a US has turn a vital marketplace for Vietnamese
agricultural exports, with 30-40 per cent of pivotal products exported
Stateside.
Nguyen Duy Khien, conduct of a American Market Department underneath the
Ministry of Industry and Trade offering this assessment, “Vietnam exports
many high-value rural products to a US, such as coffee,
pepper, cashews, seafood, honey, and fruit. And now we’re saying both
volume and income rising. The infancy of exports are extra to
the US’ internal products, including rice, catfish, and sugar, while usually a
few are substitutes. In a time to come, if a Trans-Pacific
Partnership comes into effect, rural trade between a two
countries will positively see clever growth”.
The trade of Vietnamese rural products to a US has
witnessed thespian expansion over a past dual decades.
Despite a decline
in exports in 2015, this is still one of Vietnam’s many important
markets, with a sum of $30.8 billion exported final year.
“In 2016, a Ministry of Agriculture and Rural Development (MARD)
will continue to foster a trade of products that accommodate quality
requirements and have high added-value, such as seafood, wood, cashew
nuts, pepper, and tea,” endorsed Le Van Banh, conduct of a Department of
Processing and Trade for Agro-Forestry-Fisheries Products and Salt under
MARD.
According to MARD, in 2015, exports to a US significantly decreased
against 2014 (except for wood, cashew nuts, pepper, and rattan sedge
and mats).
For instance, seafood fell 23.4 per cent, coffee fell 13.3
per cent, rubber was down 7.5 per cent, rice forsaken 21.7 per cent, and
tea also dipped 18.3 per cent.
The diminution was a outcome of several contributing factors including
more heated competition, some-more formidable technical barriers, as well
as impacts from banking devaluations by other countries, which made
Vietnamese products comparatively some-more expensive.
Le Van Quang, authority of a Minh Phu Seafood Corporation, pronounced that
due to other exporting countries’ devaluation of their domestic
currencies, a cost of shrimp exports to a US became really cheap,
effectively undercutting Vietnamese products.
Also, a anti-dumping
duty that a US levied on Vietnamese shrimp was a factor.
Diverse foe and technical barriers
With over 20 years of knowledge exporting sugarine to a US market,
Dinh Quyet Tam, authority of a Vietnam Beekeepers Association, noted
that 40 tonnes of Vietnamese sugarine entered a US marketplace for a first
time in 1992.
Since then, a volume has fast increasing to rise at
47,000 tonnes in 2014, that is value $132 million.
This 1175-fold
increase over a 20 year duration done Vietnam a largest exporter of
honey to a US, accounting for 35.6 per cent of sum import volume.
However, final year saw a pointy tumble in Vietnamese sugarine exports to
the US, down to usually 37,000 tonnes, homogeneous to $93 million.
“The foe is cut-throat. Besides a categorical competitors, India
and Argentina, there are also rising exporting countries such as
Thailand and Myanmar.
Due to healthy conditions, Vietnamese sugarine is
somewhat darker in colour in comparison with some other countries’
products, that creates a brands reduction competitive.
Despite a efforts
to change a colour by earthy or chemical methods, this process
remains really difficult.
Another reason for a dump in exports is the
importer’s chapter that a turn of Carbenazim (a casting worm
control agent) contingency be during 0 per cent.
This despotic requirement is a
technical barrier,” pronounced Tam.
Tam hopes that a Vietnamese supervision will negotiate with a US
government to palliate a Carbendazim turn requirement.
If a situation
is not remedied, this year’s trade of sugarine could diminution by 60 per
cent in volume.
Likewise, a seafood zone also faces many difficulties. In 2015,
exports fell to $1.3 billion from a prior year’s turn of $1.7
billion.
However, a US marketplace still accounted for 20 per cent of
seafood exports, with shrimp, Pangasius/catfish, tuna, and crab making
up a majority.
According to many exporting firms, a US marketplace is one of the
largest markets for Vietnamese seafood, while also containing a most
technical barriers.
Vietnamese shrimp and pangasius/catfish will
continue to face such barriers, including, many notably, anti-dumping
duties.
Most recently, in Mar 2016, a US Department of Commerce (DOC)
released a proxy end over a anti-dumping avocation on Vietnamese
shrimp alien between Feb 1, 2014 and Jan 31, 2015.
Accordingly, a aloft avocation turn has been imposed on voluntary
respondents during a 10th executive examination (POR 10).
The anti-dumping avocation on intentional respondents was determined at
3.56 per cent, scarcely 4 times aloft than a central 0.91 per cent
set in POR9.
The tariff on other Vietnamese firms, those exporters not
examined as imperative or intentional respondents in POR10, stays at
25.76 per cent.
This will positively have an inauspicious impact on Vietnamese
shrimp exporters, generally as a taxation rate that Thai enterprises –
Vietnam’s categorical aspirant – have to compensate is usually 1.35 per cent.
Also in Mar 2016, a DOC announced their final preference on
Vietnamese solidified fish fillets (between Aug 2013 and Jul 31, 2014),
again commanding a aloft turn of anti-dumping avocation opposite a last
review.
Moreover, given Mar 2016, a US Farm Bill 2014 has come into
force, posing many other pressures in terms of technical barriers for
the importation of pangasius to a market.
Commenting on a issue, MARD’s Banh said, “The interest of this market
must be supposed in tandem with extreme foe from China,
Thailand, and Indonesia – countries that have identical trade structures
for their goods. The technical barriers are also substantial challenges
to Vietnamese firms”.
He also pronounced that in a time ahead, MARD will continue to support
exports in terms of accelerating negotiations to tackle a reasons
leading to a dump of pangasius exports to a US market.
At a same
time, MARD will organize campaigns to bond a business village and
pave a approach for tea products to enter a marketplace in a second quarter
of 2016.
Another plea to Vietnamese products is a devaluation of
exporting countries’ currencies. As a consequence, a cost of
Vietnamese products became comparatively some-more dear in 2015.
Importance of an cultivation trade solicitor in a US
The US supervision has instituted many investigations and lawsuits
against Vietnam’s goods, for instance anti-dumping and countervailing
cases.
However, MARD does not have any rural solicitor in the
US, that creates this onslaught quite difficult.
Vietnam’s trade solicitor in a US, Dao Tran Nhan, pronounced “We [trade
counsellors] are spending many of a time traffic with
agriculture-related issues in a US market, notwithstanding a fact that we
are not specialists in agriculture. As such, we introduce that MARD
appoints a solicitor formed in a US really soon.”
Regarding a US Farm Bill, nonetheless a US Department of Agriculture
assessed progressing that a act would not impact trade of Vietnamese
pangasius, Vietnam still has to be on warning given this is a form of
protection measure.
In fact, pangasius exports from Vietnam to a US
fell significantly in 2015.
It is really dear for a farmers and
exporters to accommodate a set mandate underneath a bill.
To tackle technical barriers set by markets like a US, experts in
this margin have suggested that Vietnam should build identical barriers to
the US’ products.
“It is two-way trade. Both countries are markets for exports.
Recently, a import volumes of US duck thighs and wings rose
dramatically. In a nearby future, pig imports might also boost with
the doing of a Trans-Pacific Partnership. Production cost in
the US is equal to one third of that in Vietnam, while a Vietnamese
market also binds good intensity with a race of 93 million
consuming pork,” Nhan said.
However, rather than manufacture technical hurdles, a many important
solution is to raise a peculiarity of Vietnamese exports to a US
market, and to serve accelerate sequence productions.
“The obstacle of Vietnam’s cultivation prolongation is a tiny scale
and peculiarity relations to general standards. This prevents products
from assembly US technical requirements,” pronounced Nguyen Duy Khien.
Khien pronounced that Vietnamese firms need to solve a problem so that their cultivation exports can be stimulated.
VIR
Article source: http://english.vietnamnet.vn/fms/business/157332/clearing-us-technical-trade-hurdles.html