It used to be, a man could sit fishing ditch-side on a five-gallon bucket, yank a slimy, bewhiskered bottom-feeder out of the muck, claim capture of a catfish, and no one would look at him sideways. No longer.
With the passage of the new farm law came a unique method of addressing growing Vietnamese catfish sales. Congress, with the prodding of the U.S. catfish industry, has legislated what can be imported and sold inside U.S. borders as catfish.
The word “catfish” is a common English word, an umbrella word for hundreds of types of fish. For the record, Webster's definition of catfish is “any of numerous scaleless, chiefly freshwater fishes of the order Siluriformes, with whiskerlike barbells near the mouth.”
With that in mind, the short, colloquial version of the new law is this: for marketing purposes, if it isn't a channel catfish like those grown in Delta ponds, then it isn't a catfish. And on top of not being able to call your no-scale, whiskered fish a catfish no matter how much it looks like one, if it's from outside U.S. borders, it must be labeled as such.
While, at first glance, this approach to the law seems clever and novel, some U.S. trade officials claim the implications of this new law could mean problems between the United States and other countries.
Vigorously disputing that notion is the catfish industry, lead by Catfish Farmers of America. “There are attempts to portray our actions as protectionist. Those claims are simply an attempt to divert attention from the fact that our chief complaints are dishonest trade and labeling,” says Hugh Warren, CFA president.
However, once Congress legislated that Vietnamese catfish were no longer catfish, U.S. trade reps were put in an awkward position. The USTR (the agency that negotiates U.S. trade agreements) said if a country did this to a U.S. product, the U.S. industry affected would be unhappy. For example, a South American nation has brought a case against the European Union (EU) because the EU claims only sardines produced by EU nations are actually sardines, says one U.S. trade representative (who, because of continuing negotiations with the Vietnamese, didn't want his name divulged).
Until recently, the USTR was set to write a third-party brief saying the EU was wrong to claim sardines only come from EU nets, says the trade representative.
When the catfish flap was set to boil, the USTR found itself in a sticky situation. It couldn't talk out both sides of its mouth. On one hand, it couldn't claim the EU was wrong for its sardine stance and then stand by while Congress did the same thing with catfish. So it went quiet on both, says the representative, who works out of Washington, D.C.
Warren rejects any connection between the EU's sardine stance and that of catfish farmers. “These EU situations are dealing with like species or species within the same family. Those examples aren't anything near to what we've been seeing. With U.S. catfish and Vietnamese basa we're talking about species in different families. It's a far stretch to tie that example to our situation.”
It's the money…
Putting aside laws and taxonomy, the driving force behind the dispute is money. Delta and Southeast catfish farming generates between $400 million and $500 million annually. When catfish prices began to dip a few years ago, farmers began looking to improperly labeled Vietnamese imports as the root cause. As with most trade disputes, there are varying claims over how much Vietnamese fish is displacing Delta catfish.
In terms of import numbers, U.S. farmers have a point. According to the USDA, imports of Vietnamese catfish — now known as basa, tra and several other names — leapt from 130,000 pounds in 1996 to 12.5 million pounds in 2001 and typically sold for less than U.S.-raised fillets. Vietnamese officials point out that at the same time their countrymen exported more, U.S. catfish farmers' production rose from 497 million pounds in 1996 to 597 million in 2001.
“I think it's a legitimate question about whether the market was just saturated or if the Vietnamese fish really did make that big of an impact,” says Virginia Foote, president of the U.S.-Vietnam Trade Council based in Washington, D.C.
It isn't likely to raise much sympathy stateside, but Vietnamese officials claim the poor in their country are suffering due to the new laws.
“We began exporting catfish to the West some years ago. If you look at the numbers, the marketshare we've gotten is very small — but it's very important to our catfish farmers,” says Doan Do, first secretary of economics at the Vietnamese Embassy in Washington, D.C.
“100,000 catfish farmers are living only on raising the fish. This is related to the lifestyle and history in the Mekong Delta. These people are living in difficulty and harsh conditions in the hope that raising catfish will be a way out of hardship to a better life.”
A look at the fish
The debate over the word “catfish” and the implications of the new farm laws have held Carol Engle's attention for the past few months. Neither basa nor tra — the common names for the fish raised in Vietnam — are the same species raised in North America.
“The channels belong to a family, Ictaluridae. The fish from Vietnam are from a family called the Pangasiidae,” says Engle, director of the Aquaculture-Fisheries Center at the University of Arkansas at Pine Bluff.
It's true that both basa and tra don't have scales, have barbells or whiskers, and exhibit characteristics that could lead one to assume they're a type of catfish, says Engle. But there are many types of fish with similar looks that aren't considered catfish. Bullheads — trash fish commonly caught throughout the South — are scaleless and possess whiskers. But they aren't considered a catfish and a bullhead is actually closer in relation to channel cats than either basa or tra.
This whole argument isn't a scientific one, says Engle. “Really, it's an argument over a common name. As my expertise is economics and marketing, I find it worth noting that the Vietnamese first attempted to sell these fish as basa in this country. It didn't work very well. They then changed the name to catfish and sales went up.”
As those sales numbers climbed, Engle says, problems inevitably arose. “When U.S. consumers go to local buffets and pick up catfish fillets, they think they're getting farm-raised channel catfish. You know, grown and raised in some Delta pond. But often that's not the case.”
Is there anything really different about basa and channel cats?
“They have a different shape. Anyone who has seen a channel cat would look twice at basa. Those fish do have a similar look, but they have a different body configuration,” says Engle.
There's an interesting parallel here. There are European fish that have no scales and carry whiskers. In Germany, for example, there's a prized fish called wels. It looks different from the channel cat, too.
But when the United States recently began exporting channel catfish to Germany, it didn't try to sell its product as wels. It sold it as “American catfish.”
“They didn't try and promote the fish as something it wasn't. They didn't try to hide that this was a different product from the wels fish the Germans were familiar with.
“The Vietnamese did the opposite — they switched from basa to catfish and the U.S. consumers didn't know any difference,” says Engle.
Forced to play hardball
Warren says emphatically that the U.S. catfish industry was forced to take action when government agencies wouldn't enforce laws already on the books. “We're sorry we have to take these steps, but there's been such reluctance by the government — particularly on the part of the Food and Drug Administration (FDA) — that we're left with no other recourse. If they'd taken care of this early on, we wouldn't be in the situation we are now.
“There are laws regarding economic fraud that have been around for years. It's illegal to substitute a lesser species for a more expensive one — something we've claimed has been happening from the beginning.”
There are other issues, but CFA claims several key, egregious practices on the part of the Vietnamese and U.S. importers.
First, the inferior fish brought into this country were improperly labeled as “farm-raised catfish” and sold to unsuspecting consumers as an American product.
Second, the Vietnamese fish piggybacked atop a hard-won and expensive ad campaign (paid for with American fish farmers' money) to increase domestic consumption.
Meanwhile, over the last five years, the United States and Vietnam have been negotiating a bilateral trade agreement. That agreement seeks to re-establish normal trade relations between the two nations suspended since the end of the war. The trade agreement is an elaborate document of requirements that Vietnam must adhere to, including an upgrade of its commercial codes and procedures to allow U.S. companies fair trade.
In hopes of joining the World Trade Organization (WTO) and to foster this trade agreement, Vietnam has been changing its codes.
Last fall, Congress passed legislation restricting the use of the word catfish. After negotiations, Vietnamese officials agreed to start calling their product “basa.” The law was to be in effect for just one year and trade officials say the Vietnamese — still not savvy to the U.S. political process — thought they could breathe easy for a few months.
“They thought it was unfair, but they figured — incorrectly, it turns out — that the law was just for one year and it would revert after that. They thought they'd buy some time, regroup and fight it out later,” says the trade representative.
But while the Vietnamese licked their wounds, Southern congressmen and the CFA were still at work — this time on a new farm bill that would be in effect through 2008. By the time Vietnamese officials were alerted to the possibilities and started making a push to get the language changed, it was too late.
“We were very pleased with the effectiveness of the Delta senators and representatives. We aren't lobbyists in the strictest sense — we have no PAC funds, haven't hired a lobbying organization or anything of that sort. As a non-profit trade association, we simply provided information to the politicians. It worked out well for our farmers and I'm really happy about that,” says Warren.
Do says the experience was educational and a bit disconcerting. American politics, he says, “is a game and we must learn to play.”
Carrying a big stick
The Vietnamese don't have to worry only about printing up some new labels. Rumors have circulated for months that CFA is preparing to file an anti-dumping case against Vietnam. If such a case is brought and Vietnam loses, it could be forced to pay major penalties.
Because Vietnam is classified as a non-market economy, most experts say such a case would be much more difficult for the country to win. Experts even say settling such a case would be difficult.
One trade official claims that over the last few months, the Vietnamese have become more and more aghast at the way American government works. “They say, ‘Congress says we can't export or sell our catfish as catfish. So basa is what we'll call it.’ But in an anti-dumping case, what they call their fish doesn't matter. If the Commerce Department determines the product is a ‘like’ product, the case can go forward.”
So, even though the Vietnamese stopped using “catfish,” are going with “basa” and are starting from scratch in marketing it, because the products are “like,” Vietnam is vulnerable to an anti-dumping suit.
Right now, the Vietnamese mindset is on the verge of panic, say trade officials. An anti-dumping case could cost the nation a lot of money.
Delta Farm Press is told that if a case is solid enough to bring, the chance of Vietnam prevailing is, at best, 50/50.
“We've had a Washington law firm (Akin Gump) working for us for many months now. They're looking into the economic values of Vietnamese fish in our market and what effect those fish have had in relationship to the U.S. catfish price plunge. They've done a substantial amount of research that is being continually evaluated by the CFA's Vietnamese Strategy and Planning Committee. We'll have a decision on whether to proceed with a lawsuit by the end of the year,” says Warren.
Other commodity groups are paying attention to what CFA has accomplished. Warren says he wouldn't be surprised if Vietnam is hit with new claims soon. “I think the Vietnamese are probably surprised that something of this nature could be taken as far as it has. They also are opening themselves up to possible actions from other commodity industries.”
Unlike the U.S. catfish industry — with a lot of money and a well-run CFA to help — the Vietnamese industry is comprised mostly of mom-and-pop farms. Where the money will come to fight an anti-dumping case is unknown.
“There is a fish farmer organization like CFA in Vietnam. But it hasn't the money that CFA has. Vietnam is small and the U.S. is a superpower. Farmers in America are smart businessmen also. Our catfish farmers are only farmers, not businessmen — they are living strictly from raising catfish,” says Do.
Will Vietnam retaliate against U.S. goods? “Vietnamese retaliation against U.S. products is always an option. But as Vietnam isn't a member of the WTO, it is the perfect country to go after. In truth, it has very little international recourse. The ball is very much in the United States' court,” says Foote.
Do admits the Vietnamese have considered retaliation. But in practice, he says, it would be very difficult. “We haven't the money or resources of the U.S. We hope that the two parties will reinforce their commitment to free trade. We must find a solution that both countries are happy with. Perhaps American fish farmers and Vietnamese fish farmers can meet and they will understand each other better.
“In the field of international trade, what's important is coming to a common solution. That's much better than each party resorting to unilateral action such as this one. We need confidence in each other. We're concerned because we thought one thing would happen and another does. We have no idea what will happen next and we're very worried. We will comply with the U.S. laws, but the consequences could be very bad for our people.”
Not content to rely on importers' promises and Vietnamese goodwill, CFA's Warren admits the organization is in contact with detective agencies. Warren won't answer any direct questions about the agencies or their activities.
“I'd rather not say if we've hired any private investigators yet for strategic reasons. We don't want to let the fox know we're sitting in the henhouse.”
Again, Warren says, the need for detectives arose because U.S. government agencies — under the new farm law or ones that have been in effect for years — refuse to enforce regulations. And, at least for the new law, there's no enforcement money provided to the FDA. As a result, the catfish priority is low on FDA's to-do list. CFA promises to pick up any slack.
“At this point, we know the U.S. regulatory agencies are reluctant to deal with this. In fact, officials within those agencies have been quoted as such. With that viewpoint, we don't have much choice but to try and protect the industry with our own investigative resources,” says Warren.
Potential areas investigators might have under surveillance are ports of entry and packaging houses. Any evidence of illegal labeling or shipping will be turned over to the FDA for prosecution.
Whatever happens now, Warren is confident. “You know what? We have the law now. They can argue about scientific labels and technical points all they want to. We now have a law that clearly spells out what's legal and what isn't. That's what we wanted, that's what we needed and the catfish farmers in this country got it.”
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