(Tiểu luận) research paper u s technical barriers to trade and vietnamese seafood exports

Trang 1 FOREIGN TRADE UNIVERSITY FACULTY OF ENGLISH FOR INTERNATIONAL BUSINESS ---***--- RESEARCH PAPER U.S TECHNICAL BARRIERS TO TRADE AND VIETNAMESE SEAFOOD EXPORTS Topic: Internation

FOREIGN TRADE UNIVERSITY FACULTY OF ENGLISH FOR INTERNATIONAL BUSINESS

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RESEARCH PAPER U.S TECHNICAL BARRIERS TO TRADE AND VIETNAMESE SEAFOOD EXPORTS

Topic: International Trade Class: TAN432/He2023.1 Instructor: M.A Phan Kim Thoa Group: Group 5

2 Quách Linh Chi 2014110038

3 Nguyễn Diễm Quỳnh 2014110206

4 Phạm Thị Thủy Tiên 2011120010

5 Nguyễn Thị Lan Hương 2014110113

Hanoi, July 28 th , 2023

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2 Quách Linh Chi 2014110038 Recommendations for

Enhancing Vietnamese Aquacultural Export

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6 Lê Thanh Nga 2014410103 Abstract

Introduction Synthetic

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U.S technical barriers to trade and Vietnamese

seafood exports

My H Phung, Chi L Quach, Quynh D Nguyen, Tien T.T Pham,

Huong T.L Nguyen, Nga T Le School of Economics and International Business, Foreign Trade

University TAN432: English for Specific Purpose 3 M.A Phan Kim Thoa

Abstract

Trade barriers of a technical nature (TBTs) are a common occurrence in various industries, but they are particularly prevalent when it comes to the international trade of primary and processed agricultural as well as aquaculture goods In recent times, a notable number of Vietnamese seafood products have encountered rejection at U.S ports due to their failure to meet the environmental and food safety regulations imposed by the United States Consequently, this has led to significant losses for Vietnamese producers and exporters This essay explores the TBTs that have been imposed on Vietnam's seafood products, acting as a means of restricting imports Additionally, it assesses the impact of these technical barriers on Vietnamese seafood exports to the U.S market Finding a resolution to this issue would prove beneficial for the Vietnamese business community, facilitating their trade expansion with the U.S and enabling them to establish a solid presence in this crucial market

Keywords: International trade, technical barriers, seafood exports, U.S., Vietnam

Introduction

The United States holds a significant position as a key market for Vietnam's import and export commodities due to its densely populated nature, diverse preferences, and substantial annual demand for seafood In recent years, it has consistently maintained its status as Vietnam's primary import destination, constituting approximately 20% of the total export value for this category Despite this, various obstacles continue to impede the expansion of Vietnamese exports into this market

Trade barriers are a universal concern, particularly in developed countries like the U.S., where stringent technical trade standards are established, often influenced by the country's political and economic conditions While international negotiations and multilateral trade agreements have successfully removed some traditional barriers to international trade, the U.S faces the challenge of increased imports from developing nations, including Vietnam, offering goods with lower prices, labor standards, and technology compared to American products In response, the U.S has implemented restrictive requirements that pose difficulties for exporters, particularly those from developing countries, in meeting compliance

Technical trade barriers are prevalent across various industries, with particular significance in the international trade of primary and processed agricultural products The regulatory landscape for agricultural goods is predicted to become more complex, despite ongoing reform initiatives in many countries aimed at reducing the number and rigidity of regulations faced by the private sector

In this report, we used qualitative methods to analyze the topic “U.S Technical Barriers

to Trade and Vietnamese Seafood Exports”

This paper will show that Vietnam is far from enjoying bilateral trade with the U.S in

a genuinely free environment The paper will also contain some discussion on how U.S TBTs have been applied to Vietnam’s aquacultural products as means of import restriction Besides discussing U.S technical trade barriers, the paper will explain some terms that may be useful in the study of trade barriers in agricultural markets and examine why technical barriers are becoming an increasing focus of public policy debate It will then evaluate the effects of technical trade barriers on the Vietnamese business community to expand the volume

of its trade with the U.S

The research paper is organized as follows:

SECTION 1: THEORETICAL FRAMEWORK

SECTION 2: ANALYSIS AND FINDINGS

During the process of making this research paper, due to the limited amount of time as well as some certain limits in understanding and data collecting, despite all the efforts, the report may hardly avoid mistakes We are always willing to receive your comments so that our group

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Theoretical framework Overview of non-tariff barriers (NTBs) and technical barriers to trade (TBTs)

Definition of Non-tariff barriers (NTBs)

According to a recent OECD survey, many developed countries have introduced tariff barriers to replace increasingly low tariffs under WTO NTBs now make up a very large category The full range of NTBs may be listed as follows (OECD Business Survey, 2003):

non-• Technical measures

• Internal taxes or charges

• Customs rules and procedures

• Competition-related restrictions on market access

• Quantitative import restrictions

• Procedures and administration (general)

• Public procurement practices

• Subsidies and related government supports

• Investment restrictions or requirements

• Transport regulations or costs

• Restrictions of services (general)

• Restrictions on the mobility of business people or labor

• Defensive trade instruments (antidumping, countervailing duty, safeguards)

• Local marketing regulations

To date, there are various “weapons” for the purpose of trade protection For instance, U.S non-tariff barriers shut the door against many categories of products including toys, lighters, and traditional Chinese medicine (TCM) The State of California, in particular, insists that over 110 TCMs originating in China contain excessive heavy metals by the standards of drinking water in California and requests all these medicines be labeled “poisonous” (Financial Times, 2003)

Due to limited space, this research seeks to examine only what are technical barriers to trade and how the U.S uses these barriers against imported seafood, particularly aquacultural products from Vietnam

Technical Barriers to Trade (TBTs)

Among non-tariff barriers, technical barriers to trade are least clearly identified Technical barriers refer to product standards that may differ from country to country (Kristina Kloiber, 2001) These standards can also have the effect of restricting trade Such standards can include specifications of characteristics of any type of product and may be established by

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the market may still penalize those who do not comply Technical standards may require that products meet certain requirements before they are placed on the market These specifications may act as barriers to trade especially when they differ from country to country Conforming to these specifications can be so difficult and costly that it becomes economically impossible to comply with them and still remain competitive in the foreign market

Technical barriers to trade can be grouped into three main categories (John Skorburg, 1998):

1 Sanitary and phytosanitary: these regulations are implemented by countries to protect human, animal, and plant life or health

2 Consumer measures: they regulate food safety and quality including labeling,

packaging, pesticide residues, nutritional content, and contamination These regulations can allow a country to use barriers that may keep even safe commodities out for no real reason

3 Trade measures: these are implemented to prevent commercial fraud including shipping and financial documents, standards of identity, and standards of measurement The emergence of invisible TBTs has created an overall negative trading environment While some TBTs are based on sound science, others are not and have increasingly been used to unduly inhibit trade On the other hand, the U.S has considerably increased its import inspection at the port of entry over the last few years leading to an expansion of targeted surveillance sampling of imported products

U.S Institutions and Regulations for imported seafood

U.S Institutions for overseeing imported seafood products

The Food and Drug Administration (FDA) is part of the Department of Health and Human Services (DHHS) and the Public Health Service (PHS) All food products must be designed and produced in compliance with relevant FDA standards FDA is the scientific regulatory agency responsible for the safety of all foods (except meat, poultry, frozen and dried eggs and the labeling of alcoholic beverages and tobacco, cosmetics, drugs, biologics, medical devices, and radiological products) The task of the FDA is to ensure that food products are safe, clean, and wholesome and their labeling is honest and informative FDA also initiates food safety programs In 2020, FDA proposed regulations that would establish the Hazard Analysis Critical Control Points (HACCP) system for the seafood industry FDA issued its final rule on HACCP for seafood in December 2021 HACCP has been endorsed by the National Academy

of Sciences, the Codex Alimentations Commission (an international food standard-setting

U.S Customs Service is an agency of the U.S Department of Treasury responsible for the assessment and collection of import duties and taxes and the control of carriers, persons, and articles entering or departing the U.S

National Marine Fisheries Service (NMFS) is an agency belonging to the National Oceanic and Atmospheric Administration, U.S Department of Commerce Marine product imports are subject to the requirements of this agency and the FDA NMFS oversees fisheries management in the U.S and, through the Agricultural Marketing Act, provides a voluntary inspection service to the industry The NMFS Fishery Products Inspection Program offers a variety of professional inspection services that assure compliance with all applicable food regulations In addition, product quality evaluation, grading, and certification services on a product lot basis are also provided

U.S regulations on imported seafood:

Imports to the U.S are not only subject to the relatively transparent system of import duties but also to quality and grade standards to ensure the safety of the American food supply Trademark laws Several provisions in the U.S laws administered by various government agencies offer protection against the misuse of trademarks, trade names, copyrights, and patents The Trademark Act prohibits the importation of articles bearing marks that are confusingly similar to or the counterfeit of trademarks registered in the U.S Patent and Trademark Office The Tariff Act requires the U.S Customs Service to prohibit the importation

of foreign-made goods bearing marks that have been registered in the Patent and Trademark Office by a U.S citizen or corporation if a copy of the certificate of registration has been filed with the U.S Treasury Department U.S regulations require that a trademark or copyright owner record its mark or copyrighted work by application, which may be in the form of a letter,

to the Customs Commissioner, Washington, D.C., with a payment of applicable fees Other regulations FDA operates an oversight compliance program for Low-Acid Canned Food (LACF), which is based on the HACCP concept, and is focused on thermally processed, commercially sterile foods including seafood such as canned tuna and salmon U.S Federal Register system There are two acts that define the basic functions of the Federal Register system and provide the framework for the promulgation of U.S government regulations They are the Federal Register Act and the Administrative Procedure Act The former establishes a uniform system for handling agency regulations while the latter adds several important requirements to the Federal Register System

Labeling requirements In principle, all food products must be inspected and labeled to meet the relevant laws and regulations According to the Federal Food, Drug, and Cosmetic Act

terms that the ordinary consumer is likely to read and understand under ordinary conditions of purchase and use All food must have a label in English containing information on the ingredient, nutrition, serving size, the daily reference value of a dietary standard, country of origin, the manufacturer or importer’s name and address, and so on in the English language Food additive regulations Pre-market approval is required for food additives Before marketing a food or color additive in the U.S., a manufacturer must petition FDA for approval

A food or color additive petition must provide convincing evidence that the proposed additive performs as it is intended FDA will then determine if the additive is safe under the proposed conditions of use, based on the best scientific knowledge available

The U.S seafood import market at a glance

The U.S is the world’s largest seafood exporter as well as the second-largest country in seafood imports, after Japan It is considered one of the most attractive seafood import markets

in the world U.S citizens have high incomes and diverse food demands For these reasons, seafood prices often stay at a high level

Figure 1

U.S Value of Total Seafood Imports, 2000 2019 –

Source: U.S Department of Agriculture (2021) China, Chile, and Vietnam have proved crucial in meeting the growing demand for seafood in the United States Figure 1 reports historical data on the total value of U.S seafood

imports since 2000 Figure 1 indicates that seafood imports have largely survived the recent protectionist policies that adversely impacted other imported products and commodities

Figure 2

U.S Seafood Imports by Selected Species, 2010 2020 –

Source: U.S Department of Agriculture (2021) Figure 2 illustrates U.S seafood import volumes since 2010 for the top five most consumed species Our analysis does not allow us to distinguish imports for food consumption from other possible uses Shrimp is the most imported species by volume and that, since 2010, the volume of imported shrimp into the United States (mostly from India and Indonesia) has increased by about 33% On the other hand, tuna imports (in all forms) into the United States have changed little, with a small increase after 2015 mostly because of strong growth in canned tuna and frozen tuna filet imports

Implications of U.S TBTs on Vietnamese Seafood Exported to the U.S Market

The current state of Vietnamese seafood exports to the United States

Vietnamese seafood exports to the U.S from 2015 to 2022

Figure 3

Value of Vietnamese seafood exports to the U.S from 2015 to 2022

Source: Trademap Seafood export in 2015 faced some difficulties: electricity prices increased, social insurance increased, and lending interest rates increased; while TPP and FTA commitments make the export door open, but at the same time technical barriers increased However, the biggest difficulty to mention about seafood export in 2015 is the technical and trade barriers raised by importing countries Accordingly, the anti-dumping tax on pangasius in the US market increased, causing difficulties for fish farmers and Vietnamese pangasius exporters In 2015, the US Department of Commerce (DOC) twice introduced anti-dumping duties on frozen pangasius filets imported from Vietnam

From 2016 to 2022, the value of Vietnamese seafood exported to the US has shown signs of improvement

2016 is considered a year with many difficulties for pangasius farmers in the Mekong Delta as well as pangasius exporters Raw material prices fluctuated in a large and erratic range, causing businesses and farmers to continue to suffer heavy losses However, thanks to strong investment and technological innovation, the shrimp market remains volatile and increases with

a large export source

If in 2017, Vietnam's pangasius exports to the US market have many pessimistic