VietNamNet Bridge – When the US Congress passed the Agricultural Act of 2014 earlier this year, it included a new inspection programme that was designed to protect the US catfish industry from competition from Vietnamese imports.

AmCham in Vietnam recently wrote to many US Congress leaders to express the chamber’s concern that the new catfish inspection programme will interfere with Vietnam’s catfish exports. VIR talks with Sesto Vecchi, a member of the AmCham Board of Governors and managing lawyer of Russin & Vecchi.

Why are Vietnamese catfish exporters upset with the new US inspection procedures?

Before this new inspection programme was put in place, the US Food & Drug Administration (FDA) had always had the responsibility to inspect seafood imports into the US. The FDA is a very efficient agency.

The FDA has smoothly processed millions of tonnes of Vietnamese catfish imports over the past two decades, with a remarkable track record for safety. An average of only two catfish-related illnesses are reported out of the 1.8 billion FDA-inspected catfish consumed by US citizens each year.

US politicians from catfish-producing states have been very unhappy with the growing competition the US industry faces from Vietnamese imports. Some members of the US Congress have looked for ways to protect the US catfish industry.

The US Congress, in a highly unusual move, has recently transferred jurisdiction over catfish inspections from the FDA to the US Department of Agriculture (USDA). Several congressional backers of the new USDA Catfish Inspection Program have publically expressed the hope that this change will help the US catfish industry. Since the FDA has a stellar track record in assuring the safety of imported catfish, it seems that this move is motivated by protectionism rather than genuine health concerns.

How exactly will USDA inspections pose more problems for Vietnamese catfish exporters?

Until now, the USDA has been responsible for inspecting meat from land animals - such as beef, poultry, and pork - while the FDA has been responsible for seafood.

Domesticated animals generally pose a greater communicable disease risk for humans than do seafood or fish. Consequently, the USDA has a far stricter and intrusive inspection process than the FDA. Its process is keyed to the higher risk of disease in meat products. We believe that the new USDA rules will be far more burdensome on catfish importers than the FDA rules were.

Another problem is that the USDA has no experience or expertise in seafood inspections. This could cause significant disruptions for catfish imports.

If the USDA inspects land animals, while the FDA inspects seafood, how does the Congress justify placing catfish under the jurisdiction of the USDA?

The official reason given for this change is that foreign catfish farms overuse antibiotics and antifungals, and that the FDA has not been rigorous enough in testing for banned antibiotics.

AmCham notes, however, that producers of shellfish and salmon and other types of farmed seafood also rely on antibiotics, yet the Congress singled out only catfish for placement under the USDA’s jurisdiction. AmCham also notes there are many ways to deal with the issue besides the very drastic and disruptive step of transferring inspections to a different agency.

Is there anything Vietnamese catfish exporters can do at this point to protect their businesses?

Vietnam has several ways it can challenge this new USDA inspection programme. For example, it can use diplomatic channels to work with the US in minimising disruption to the industry. We have heard that Vietnam has raised concerns about the programme in the TPP negotiations.

Perhaps the more promising avenue, however, would be to work with US regulators who are tasked with implementing the Catfish Inspection Programme. Since the programme is unfortunately now enshrined in law, the next step is to attempt to minimise the damage caused by the Catfish Inspection Programme. Engaging in a dialogue with regulators as they draft the implementing rules is a key way to go about this.

Sometime in the near future, US regulators will release preliminary draft rules concerning the new USDA Catfish Inspection Programme and invite the public to comment.

Regulators then will draft a final version of the rules that takes into account public feedback. This process will provide Vietnamese catfish exporters with an opportunity to be heard.

Federal regulators may prove quite open to Vietnamese catfish exporters’ arguments. Although the programme’s creators conceived of it as a vehicle for protectionism, the regulators who will implement the programme do not necessarily share this goal. The regulators may be receptive to suggestions from importers on how to minimise disruptions from the new programme.

Vietnam’s catfish industry, however, will need to become clearly engaged in order to take advantage of the regulatory comment period.

VIR/VNN