US embassy cable - 03HOCHIMINHCITY635

UNCLAS SECTION 01 OF 02 HO CHI MINH CITY 000635 
 
SIPDIS 
 
State pass to USTR for Bryan 
USDOC for 3132/OIO/EAP/Kelleher 
USDOC also for 1431/MAC/AP/HPPho 
USDOC also for ITA/IA/5120/4230/2130 
 
 
E. O. 12958: N/A 
TAGS: ETRD, EFIS, EAGR, ECON, VM, BTA 
SUBJECT: VIETNAM'S CATFISH FARMERS PETITION CONSULATE GENERAL, 
DEPT OF COMMERCE AND ITC FOR RELIEF 
 
 
Introduction and Summary 
------------------------ 
1.  On July 9, three fish farmers representing the Fisheries 
Association of An Giang, the province in the Mekong Delta where 
most of Vietnam's tra and basa fish are raised and processed, met 
with CG and Econoff at the Consulate General.  Indicating they 
represent about 40,000 farmers and family members involved in fish 
farming, they delivered a petition signed by more than 200 fish 
farmers protesting the anti-dumping margins set by the U.S. 
Department of Commerce on frozen basa and tra fillets and asked 
that the margins be reconsidered or delayed.  The petition itself 
was addressed to the Chairman of the ITC, the Secretary of 
Commerce, and the U.S. Consul General.  Hard copies of the 
petition and signatures will be forwarded to the ITC and the 
Department of Commerce. 
 
2.  The petitioners were represented by three fish farmers, all of 
relatively modest means.  Although large fish raising operations 
do exist in the Delta, most fish farmers work on houseboats that 
sit atop large fish cages floating in the Mekong River.  Farmers 
typically live in these boats with their families.  Two of the 
farmers who presented the petition owned one cage each, and one 
farmer, who spoke a bit of English, owned four cages.  All of the 
men were extremely polite, and made their points energetically, 
but with courtesy. 
 
June 17 Final Determination Brings Hard Times 
--------------------------------------------- 
3.  The fish farmers stated they were representing about 40,000 
farmers and family members who have been affected by the anti- 
dumping margins.  They stated that although they believed 
Vietnamese fish processors would still continue to make money, the 
brunt of the anti-dumping measures had fallen squarely on the 
shoulders of the fish farmers.  They pointed out that since the 
June 17 final determination had been issued, fish prices had 
fallen from about 10,000 -12,000 VND (65 -77 US cents) per kilo to 
about 8,500 VND (55 cents) per kilo currently.  They had been 
higher earlier in the year.  To break even, the farmers estimated 
they had to clear about 10,000 VND per kilo.  The men were very 
concerned that they would be unable to sell their current fish 
stocks without incurring substantial losses.  Even as prices 
remained low, they noted, they still had to feed the fish.  They 
were also worried the fish were growing larger than the size 
preferred by the processors, which would further depress the 
price. 
 
4.  When asked if they would be able to convert to raising other 
varieties of fish, they said that they would try to start raising 
roughy or tilapia, but they still had to unload their current 
stocks of tra and basa fish, which would push them into (further) 
debt.. 
 
We Can't Afford to Be "Dumping" 
------------------------------- 
5.  The fish farmers also argued that they had not been "dumping" 
their product on the U.S. market.  Although prices had fluctuated 
even before the anti-dumping case, the farmers could not afford to 
go without profits.  They pointed out that many fish farmers had 
to borrow against the value of their boats to secure funding and 
that they did not have enough capital to sustain losses.  Thus 
their current problem of disposing of their current stocks of tra 
and basa was extremely troubling.  They also pointed out that they 
buy their fish food and sell their fish at market prices - not at 
prices set or guided by any government authority.  Prices were low 
relative to the U.S., they noted, because of An Giang's natural 
environment, which is conducive to raising fish, low labor costs, 
and the fact that much of the labor was from family hands. 
 
6.  The three fish farmers asked the CG to pass along their views 
and for the USG to lower the margin rates or at least delay their 
imposition until current stocks could be sold. 
 
"You Mean We Came All This Way for Nothing?" 
-------------------------------------------- 
7.  CG Yamauchi thanked the farmers for their visit and assured 
them that she would pass along their views.  CG and Econoff then 
briefly outlined the process of an anti-dumping investigation and 
determinations.  The CG noted the process was quasi-judicial and 
allowed for public comment.  Anti-dumping cases are allowed under 
the Bilateral Trade Agreement and the U.S. mechanism is in line 
with WTO guidelines.  During the anti-dumping case, both the GVN 
and the Vietnamese industry had availed themselves of the 
opportunity to supply additional information and comment.   If 
Vietnam were a WTO member, she noted, Vietnam would have the right 
to take the decision to the WTO. She also noted that by law the 
U.S. Consulate had no role in the investigation or in the 
determination.  Econoff also clarified that at this point in the 
process, the margins had been already set and that the ITC 
decision, coming at the end of this month, is based on a 
determination of whether the U.S. catfish industry is actually 
suffering or facing the threat of material injury.  The ITC could 
not revise the margin rate, nor do they have the authority to 
delay imposition of the margins.  The farmers seemed surprised to 
learn this, and one of the farmers stated: "So you mean that after 
coming here we have to go back to An Giang with nothing?" 
 
8.  Comment:  It is difficult not to feel sympathetic toward these 
fish farmers, who went to considerable effort to travel the 6 
hours by car from An Giang Province to Ho Chi Minh City to state 
their case.  Each has been farming for at least 10 years, one for 
more than 20 years.  Their dark tans and calloused hands testify 
to their hard work.  They have earned a reasonable living, and by 
rural Vietnamese standards are relatively well-off.  Just the 
same, however, most of their assets are tied up in the boats they 
live on and the fish inside the floating cages underneath.  In at 
least the short term they will face substantial losses.   In time, 
according to these farmers, it is likely many farmers will be able 
to switch to other varieties of fish.  If enough do so, and demand 
for tra and basa continue to expand in non-US markets, prices will 
once again rise.  The farmers' biggest worry now is whether or not 
they can sell their stocks without losing so much money that they 
go out of business before they even get a second chance at raising 
different fish. 
 
 
YAMAUCHI