It seems the economic muscle south of Red Dragon is often overlooked. Vietnam's economic growth since 2000 is rivaled only by China - on average Vietnam is growing at 7.5 percent a year. Poverty levels have dropped significantly over the past 15 years from 50 percent to 20 percent with average per capita income at $500 which the government aims to raise to $1,000 in the next few years.
What profession has been a main breadwinner for many Vietnamese? Aquaculture.
Aquaculture is the cultivation of fish or shellfish under controlled conditions, and it has been flourishing in the Vietnamese shrimp industry over the past 20 years. More specifically, the shrimp industry in Vietnam - both aquaculture and fishing - has brought in almost $450 million due to high International and American demand. This is significant given that agriculture, forestry and fisheries make up over 27 percent of the country's GDP.
In the 1980's, the government of Vietnam instituted what is known as "Doi Moi" - economic renovation. This was the start of the shift towards a more capitalistic market structure where more free market enterprises were permitted by the governing Communist Party. Doi Moi was a crucial shift in the politics of Vietnam, where more economic and social liberties were given and thus allowed for the growth of the shrimp industry. Shrimp farming in Southeast Asia is no longer a small-scale business industry though. Thanks to Doi Moi, it is now a global industry and very crucial to the sturdiness of the economy.
Naturally, the American shrimp industry has been finding it hard to compete with this "Asian Tiger." Accusations that Vietnam is dumping low-priced shrimp into the American market and undercutting American producers have allowed the case to be seen and ruled on by the Department of Commerce. Protectionist legislation was enacted to help American business. Tariffs of up to 93 percent are placed on Vietnamese shrimp. The Vietnamese Association of Seafood Exporters and Producers (VASEP) is very indignant about the laws and insists that the tariffs "will have an adverse impact on the livelihood of millions of shrimp farmers in the coastal areas and thousands of workers in the shrimp processing factories in Vietnam."
This is not new for Vietnam. A similar case happened last year with catfish producers. With lowered American consumption due to the catfish tariffs, Vietnamese producers are buying less fish from local farmers and there is now a problem of overproduction. Vietnam accuses America of blatant protectionism, and this tariff issue could escalate into heated debate between Vietnam and America.
Aside from the economic downsides, there are also resultant environmental effects from the growth of the industry. Shrimp are farmed in brackish water ponds, which are often artificially created by cutting down mangrove forests along coastal areas. Destruction of natural habitats is certainly lamentable, and more regulations will likely come when the economy stabilizes. Pesticides and fertilizers are also used to clean the ponds, these chemicals then leak out in the surrounding water and are detrimental to the environmental stability of the riverside rainforests.
Vietnam is not the only one affected by the tariffs. The ruling that Vietnam was dumping shrimp into the American market at officially low prices was accompanied by the same accusation of China. Tariffs on China are also potentially high, with proposed duties as high as 112 percent. Similar cases have been brought against Brazil, Ecuador, India and Thailand, which all combined account for a combined 75 percent of the shrimp imported by America. There are significant risks for Vietnam, where shrimp is the third largest export. VASEP noted that almost two thirds of the shrimp exports will take a hit from the tariffs.
It seems the proposed tariffs are appetizers for the American shrimp farmers who are pushing for a 200 percent tariff. They will have to wait for their shrimp cocktail for a while though, and for now, average Americans will just continue eating at Red Lobster without a second thought.
