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Viet Nam Rejects US Claims of Shrimp Industry Subsidy

04 February 2013

VIET NAM - Vietnamese seafood producers are prepared to embark on a long battle against a US Department of Commerce anti-subsidy investigation to see whether the country and six others have been engaged in unfair trade practices.

The Vietnamese Association of Seafood Exporters and Producers (VASEP) says the petition by a coalition of shrimp producers in the US is "groundless" and could harm exporters as well as American importers and consumers, reports VietNamNews.

VASEP afirms that Viet Nam's shrimp industry is not subsidised by the government, saying that farmers, producers and exporters all operate in a free market. Moreover, the country, as a member of the World Trade Organisation (WTO), complies with regulations on subsidies for agriculture, and has evidence to prove its compliance, Truong Dinh Hoe, VASEP secretary-general, told Viet Nam News.

Tran Van Linh, vice-chairman of VASEP, who is also general director of Thuan Phuoc Trade and Seafood Joint-Stock Company, said farmers had not received government subsidies and were in fact struggling to survive during the prolonged economic downturn. Linh said they also did not receive refunds on value-added tax (VAT) for their purchases of raw materials, which have increased in price due to high inflation.

In recent years, the shrimp industry has had to face major challenges, including high interest rates on bank loans, and disease outbreaks that have led to massive shrimp deaths. Last year, about 30 per cent of shrimp businesses in Viet Nam went bankrupt; 30 per cent suspended operations; and the remainder cut back on production.

"I think this petition is no doubt an excuse and a bid to compete with shrimp imports. If the US goes ahead with this, then it is the US that subsidises its shrimp industry," Linh told Viet Nam News.

In consultation with lawyers, VASEP has prepared a legal response, but the Government will play the most important role by proving that the industry receives no subsidies, according to Linh. Vo Van Phuc, general director of Vina Cleanfood Joint-Stock Co. based in southern Soc Trang Province, said that farmers did not receive government subsidies and that most of them have had difficulty accessing loans at preferential interest rates, particularly in the last few years.

"The price of everything has rocketed, especially materials for shrimp breeding. The loans we received from commercial banks had an annual interest rate of 20 per cent. Subsidies? It's just laughable to say we're subsided by the government," he said.

VASEP said that such an anti-subsidy duty would affect the livelihoods of more than 600,000 Vietnamese shrimp farmers and processors.

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