Vietnamese aquatic products, particularly shrimp, are on the cusp of capturing a larger share of the US market. Experts suggest that this expansion could become a reality if the United States recognizes Vietnam as a market economy. Such a move would dismantle existing barriers, fostering a more favorable trade environment.

Vietnam’s Strong Export Performance

Last year, Vietnam solidified its position as a major exporter to the US, achieving a turnover of USD 97 billion. This amount represents 27% of Vietnam’s total export turnover, highlighting the significance of the US market. Specifically, Vietnam’s seafood exports to the US have consistently contributed between USD 1.5 billion and USD 2 billion annually over the past decade, accounting for 18% to 23% of the country’s total seafood exports.

The US remains the largest consumer of Vietnam’s key seafood products, including shrimp. Despite being a significant market, the US produces only 10% of the shrimp it consumes, relying heavily on imports. Of these imports, 50% to 60% consist of farmed, warm/brackish water, and frozen shrimp, with Vietnam being a crucial supplier.

Challenges and Opportunities

Vietnam also imports seafood from the US, valued at USD 65 million to USD 70 million annually. This seafood, which includes salmon, herring, pollock, and flounder, is processed in Vietnam and often re-exported to the US. However, the full potential of Vietnam’s seafood industry in the US market has been hampered by long-standing tariff barriers, such as anti-dumping and anti-subsidy taxes on shrimp and other products.

The ongoing consideration by the US to recognize Vietnam as a market economy is creating optimism within the industry. Le Hang, communication director at the Vietnam Seafood Exporters and Producers (VASEP), highlighted the significance of this potential recognition. It would ease administrative reviews of anti-dumping taxes and potentially lead to the removal or relaxation of other restrictive regulations.

Administrative and Investment Benefits

The US Department of Commerce recently heard testimony regarding Vietnam’s market economy status, with a decision expected by July. Should Vietnam receive this recognition, local seafood businesses would benefit from reduced anti-dumping taxes and a more favorable trading environment. This change is also anticipated to attract more US investors to Vietnam’s seafood industry, further enhancing trade opportunities between the two nations.

According to the Ministry of Industry and Trade, recognizing Vietnam as a market economy would lower anti-dumping taxes on Vietnamese imports. This shift would restore the competitive edge of Vietnamese seafood, particularly shrimp, in the US market. It would also provide US consumers with greater access to high-quality, affordable seafood from Vietnam.