Fishy import plan risks trade war

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By Ben Evans ASSOCIATED PRESS

a cheap variety that's usurping the humble catfish's place on Americans' tables and threatening their livelihoods.

After years of arguing that the Vietnamese fish isn't catfish - and winning a federal law saying as much - the U.S. farmers are now trying to have it both ways. Under their latest lobbying strategy, they want the Vietnamese imports considered as catfish so that they will be covered by a new inspections regime the farmers pushed through Congress last year.

The move - an example of how influential industries work their will on Congress - could block imports of the Vietnamese fish for years and risks a broader trade war.

If the Obama administration signs off on the plan, the fish that's long been a staple of Southern cooking could unravel years of improving relations between the U.S. and its former enemy.

The inspections feud is the latest in a long-running battle between a $400 million domestic farm sector that raises catfish in ponds across the Mississippi Delta and a burgeoning industry in Vietnam, where fish are raised in ponds and cages along the Mekong River.

The U.S. industry - mostly located in Mississippi, Alabama and Arkansas - has had a string of successes on Capitol Hill and in Southern legislatures.

Along with winning frequent federal aid, it pushed a labeling law through Congress in 2002 that forced the Vietnamese fish to be sold in the United States under unfamiliar names such as pangasius, basa or tra. A year later, it won an antidumping case authorizing tariffs of up to 64 percent on the Vietnamese fish. The Southern states where most catfish farming is done now require restaurants to disclose where their fish were raised.

Despite that, the value of Vietnamese imports jumped from $13 million in 1999 to $77 million last year, according to the Commerce Department. Over the same period, U.S. production fell from $488 million to $410 million.

The inspections requirement could be the U.S. producers' silver bullet, stopping imports in their tracks. Applying to all catfish sold in the U.S., it would require Vietnam to establish a complicated inspection system and demonstrate that it is equivalent to U.S. inspections, a process that could take years.

Last year, the industry persuaded catfish-state lawmakers led by Sen. Thad Cochran, Mississippi Republican, to slip the inspection requirement into the massive farm bill.

Seafood typically is regulated by the Food and Drug Administration, which administers spot inspections that are relatively easy for foreign countries to participate in. Mr. Cochran's provision singles out catfish as the only seafood to be regulated by the Agriculture Department, which traditionally oversees only beef, pork and poultry products.

The law leaves it up to Agriculture Secretary Tom Vilsack to define which species would fall under the "catfish" definition, and that has triggered a furious lobbying campaign. Mr. Vilsack's decision is expected soon, but a draft recommendation obtained by the Associated Press calls for the Vietnamese pangasius to be covered.

Vietnamese officials say such a move would add insult to injury. Their "catfish" industry employs an estimated 1 million people and accounts for more than 2 percent of the country's economy. Calling the inspections a backdoor tariff, the government is hinting at consequences for U.S exports to Vietnam.

"For the U.S. to now reverse itself to prevent Vietnamese product from entering the market appears to developing nations hypocritical," Vietnam's ambassador to the U.S., Le Cong Phung, wrote in a letter to U.S. lawmakers. Such a decision, he wrote, could "significantly impact the bilateral relations between Vietnam and the United States."

Others such as Senate Finance Committee Chairman Max Baucus, Montana Democrat, are getting involved out of concern that their states' interests might get caught in the crossfire. Vietnam is now the third-largest export market for U.S. beef.

The Catfish Farmers of America, the industry's leading trade group, declined to discuss the inspections, saying they didn't want to speak publicly as Mr. Vilsack weighs his decision.