Vietnam Shrimp Industry Faces Continued Hurdles

On 7 January, Vietnam asked a WTO panel to rule on its second “zeroing” challenge launched last March concerning anti-dumping duties collected by the US on certain imports of frozen warm-water shrimp (DS429).

Vietnam already successfully challenged zeroing in two administrative reviews for warm-water shrimp in 2011 (DS404). Hanoi, however, alleges that the US failed to meet the 2 July 2012 implementation deadline, prompting the Southeast Asian nation to bring this second complaint. The US makes up a major part of the Vietnamese shrimp market, taking in over 20 percent of the latter’s shrimp exports.

The challenged methodology, in which products sold above market standard are not counted when calculating dumping margins - they are hence “counted as zero” - has been repeatedly and consistently ruled WTO-illegal by the global trade arbiter’s Appellate Body. While the US abandoned using zeroing in original dumping investigations from 2007 onward, they still employ the methodology in their “administrative reviews” of existing dumping cases. A panel ruling could be issued before year’s end.

Further tension could loom in the face of a recent anti-subsidy petition by US shrimp producers, putting pressure on Washington to implement further trade remedies against Hanoi and six other trading partners.

The Vietnam Association of Seafood Exporters and Producers (VASEP) has publicly repudiated the petition, claiming to have sufficient evidence to counter it. In its statement, VASEP also pointed to WTO rules that inform both the extent to which agricultural subsidies are permissible, and the rules which a country must adhere to in countervailing - or “anti-subsidy” - duty investigations.