The Biden administration not too long ago issued a truth sheet saying advances in U.S.-Vietnam commerce relations. One of many gadgets included within the announcement was Vietnam’s “optimistic consideration” of a U.S. proposal to remove or cut back Most Favored Nation (MFN) import duties on pork, corn and wheat merchandise.
The U.S. Meat Export Federation (USMEF) is awaiting additional particulars on the standing of this proposal, however the announcement underscores the truth that tariff aid for U.S. pork is much-needed within the price-sensitive Vietnamese market.
Even earlier than African swine fever (ASF) was confirmed in Vietnam in early 2019, the U.S. pork business noticed sturdy progress potential on this rising market. Although largely self-sufficient in pork manufacturing, Vietnam’s rising center class and quickly rising foodservice and retail sectors offered intriguing alternatives for U.S. pork. The U.S. pork business was poised to learn from vital market entry features in Vietnam by means of the Trans-Pacific Partnership (TPP) earlier than the US withdrew from TPP in 2017.
“Though Japan was the TPP member that drew a lot of the media consideration when discussing entry for U.S. crimson meat, we additionally noticed improved entry to Vietnam as a significant win,” stated USMEF President and CEO Dan Halstrom. “As soon as the U.S. withdrew from TPP, a bilateral settlement with Japan understandably turned the highest precedence for U.S. agriculture, and fortunately the U.S.-Japan Commerce Settlement largely replicated the features in pork market entry that had been included in TPP. However that isn’t the case in Vietnam, the place the successor settlement to TPP (the Complete and Progressive Settlement for Trans-Pacific Partnership, or CPTPP) and Vietnam’s free commerce settlement with the European Union have put U.S. pork at a extreme drawback.”
Vietnam’s MFN obligation fee for imported frozen pork is 15%. The 2021 fee for imports from Canada and different CPTPP members is 7.5%, whereas pork imported from the EU is tariffed at 11.3%. The MFN fee for pork selection meat is 8%, whereas the charges for Canadian and EU selection meats are 2% and 6.4%, respectively. Vietnam can be a major vacation spot for Russian pork, which additionally advantages from favorable tariff therapy.
In July 2020, with ASF having dealt a critical blow to its home pork manufacturing, Vietnam diminished the MFN fee on frozen imported pork from 15% to 10% in an effort to bolster pork provides and stabilize costs. This tariff discount offered a lift for U.S. exports to Vietnam, which totaled practically 17,000 metric tons (mt) within the second half of 2020 – a rise of greater than 60% year-over-year and greater than double the amount exported within the first half of the yr. However the MFN fee returned to fifteen% on Jan. 1, 2021, which widened U.S. pork’s tariff drawback in Vietnam in comparison with main rivals.
Because the non permanent MFN fee discount expired, U.S. exports to Vietnam have been in decline regardless of the nation’s continued sturdy demand for imported pork. Within the first half of 2021, pork and pork selection meat exports to Vietnam from main suppliers primarily doubled from a yr in the past, reaching 185,000 mt. Conversely, first-half exports from the US had been down 41% from a yr in the past, dropping beneath 5,000 mt. In July, U.S. exports sank by 94% to only 169 mt. Amongst rivals, Vietnam an particularly engaging goal for exporters from Germany and Poland as a result of these nations wouldn’t have entry to China, Japan and lots of different main export markets as a result of ASF-related restrictions. Russian exporters are in an identical place, as Vietnam has taken greater than half of Russia’s complete exports this yr. Many of the remaining quantity was shipped to Ukraine, Belarus, Kazakhstan, Mongolia and Hong Kong.
Whereas Vietnam’s pork manufacturing has recovered to a point from ASF and COVID lockdowns and different restrictive countermeasures have not too long ago slowed financial exercise, Halstrom says the market nonetheless holds vital alternatives for imported pork.
“Sadly U.S. pork has been largely relegated to the sidelines, with our tariff drawback being a major impediment,” Halstrom defined. “USMEF is happy that market entry for U.S. pork is a excessive precedence within the Biden administration’s commerce discussions with Vietnam, and we’re anxious to see these talks progress.”
Sources: U.S. Meat Export Federation, who’s solely chargeable for the knowledge offered, and wholly personal the knowledge. Informa Enterprise Media and all its subsidiaries usually are not chargeable for any of the content material contained on this info asset.