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Cablegate: Vietnamese Fish Industry Courts Codel Boswell

VZCZCXRO5872
OO RUEHDT RUEHPB
DE RUEHHM #1096/01 3641040
ZNR UUUUU ZZH
O P 291040Z DEC 08
FM AMCONSUL HO CHI MINH CITY
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5254
INFO RUEHHI/AMEMBASSY HANOI PRIORITY 3497
RUEHHM/AMCONSUL HO CHI MINH CITY PRIORITY 5484
RUCNARF/ASEAN REGIONAL FORUM COLLECTIVE
RUCPDOC/USDOC WASHDC PRIORITY 0101
RUEHRC/DEPT OF AGRICULTURE USD FAS WASHINGTON DC

UNCLAS SECTION 01 OF 02 HO CHI MINH CITY 001096

SENSITIVE
SIPDIS

STATE FOR EAP/MLS, USAID/ANE, EEB/TPP/BTA/ANA, OES/STC
USDOC FOR 4431/MAC/AP/OPB/VLC/HPPHO
USTR FOR BISBEE
TREASURY FOR CHUN

E.O. 12958: N/A
TAGS: ECON EAGR ETRD EFIN SOCI PGOV PREL OTRA OVIP VM
SUBJECT: VIETNAMESE FISH INDUSTRY COURTS CODEL BOSWELL

REF: A) HCMC 1075; B) HCMC 1092

HO CHI MIN 00001096 001.2 OF 002


1. (SBU) Summary: During CODEL Boswell's visit to the Mekong
Delta on December 18, GVN officials and business executives
appealed for greater U.S.-Vietnamese cooperation on trade issues
and emphasized the concerted efforts Vietnam has made toward
improving food safety standards for its aquaculture products.
Delegation members evaluated one leading fishery's commitment to
food safety by touring its tra and basa ("catfish") processing
plant, from the arrival of fish fresh off the boat to the final
flash freezing. Overall, Members appeared impressed with
conditions in the plant, though they raised some concerns about
the plant's technical hygiene and safety standards, such as
temperature at various points in the production chain.
Vietnamese representatives noted that a significant portion of
the feed inputs, products, training, and technology used in the
aquaculture industry are from the U.S. -- further evidenced by a
visit to a Cargill feed mill -- and urged the same fair
treatment for Vietnamese products entering the United States.
End Summary.

The Case for Food Safety and Fair Treatment
-------------------------------------------
2. (SBU) Chairman of the House Subcommittee on Livestock, Dairy,
and Poultry, Leonard Boswell (D-IA), accompanied by House
Agriculture Committee colleagues Robert Goodlatte (R-VA), Henry
Cuellar (D-TX), Adrien Smith (R-NE), Steve King (R-IA), and a
USDA Food Safety Inspection Service (FSIS) representative,
Christopher Gould, visited Vietnam on December 17-19 to raise
agriculture-related issues. In light of the possible changes to
the way the United States regulates imported Vietnamese tra and
basa, CODEL members heard an emphatic endorsement of Vietnam's
aquaculture industry by GVN and business representatives at the
Huong Vung Corporation in My Tho on December 18. The Deputy
Minister for Agriculture and Rural Development (MARD), Luong Le
Phuong, along with Director of the Ministry's seafood
food-safety authority (NAFIQAD), emphasized the GVN's commitment
to food safety that extends "from the farmer to the food on the
table." Mr. Phuong said the agency has increased human
resources and developed a solid technical infrastructure to
ensure food quality, including six regional centers dedicated to
quality control and the recent completion of a state-of-the-art
national testing center. Mr. Phuong noted that the GVN's
dedication to safety has earned Vietnam valued certifications of
recognition by the European Union, Canada, and Korea.

3. (SBU) Pointing to a plate with American grapes and small,
round Vietnamese longan fruit side by side, Secretary General of
the Vietnam Association of Seafood Exporters and Processors
(VASEP), Truong Dinh Ho, offered the fruits as a symbol of the
close relationship between the United States and Vietnam that he
hopes will result in greater trade cooperation. Noting that the
European Union is still the largest destination for the
industry's 30 percent yearly expansion, Mr. Truong said he was
disappointed that Vietnamese exporters are still subject to
obstacles such as anti-dumping actions on imports into the
United States and asked CODEL members to review these measures
and consider giving Vietnamese products the same fair treatment
that U.S. products in Vietnam receive.

One Industry Leader's Experience, First-Hand
--------------------------------------------
4. (SBU) To further the point about fair treatment, Hung Vuong
President Duong Ngoc Minh noted that half of the million metric
tons of soybean meal (SBM) that Hung Vuong company uses for fish
feed comes from U.S. producers. Although the company currently
purchases most SBM through intermediaries in Singapore and
Thailand, he said they would like to import directly from U.S.
companies. (Note: In a separate prior meeting, Mr. Minh told
ConGenOff that Hung Vuong's whole factory is based on American
standards, most of the technology for its cold chain is from the
United States and he intends to purchase another $20 million of
American equipment.) Hung Vuong Corporation, which became a
joint stock company in 2007, is a leading producer and exporter
of tra and basa products and also has interests in animal feed
production, cold storage, and real estate, among others.

5. (SBU) Chairman Boswell told representatives that he was
impressed by Vietnam's leading world position in aquaculture
exports and commended the steps the GVN and producers have taken
to improve food safety. To get a first-hand look at some of
those efforts, CODEL toured the Hung Vuong fish processing
plant. Each member donned protective gear, underwent
disinfection, and walked through each stage of the
labor-intensive fish production line. Afterwards, one

HO CHI MIN 00001096 002.2 OF 002


delegation member noted a few potential concerns, such as the
increased food safety risk posed by so many different people
handling the fish, questions about cross-contamination of waste
disposal and whether the temperatures were sufficiently cold.
In contrast, however, another member stated that if the Hung
Vuong plant is representative of all fish processing plants in
the region, then Vietnam could probably hold its own in a U.S.
Department of Agriculture equivalency review. (Note: Hung Vuong
was chosen because of its convenient location. Many other fish
processing plants that ConGenOffs have visited exceed the
hygiene/safety standards of the Huong Vung plant.)

Road signs for the Two Way Street
---------------------------------
6. (SBU) At the Cargill feed mill, CODEL Boswell observed how
the 100 percent U.S.-invested company has established a strong
presence in the Delta region as a leading supplier for fish
feed, as well as training farmers. With a distribution chain
that reaches far and wide, Cargill said its products are used in
more than 10 million farms. Interestingly, although the feed
mill imports more than fifty percent of its inputs and has
utilized 1,000 tons of U.S. soybean meal since its opening,
U.S.-imported SMB currently represent only a small portion of
Cargill's total imports for fish feed since it is relatively
expensive compared to Argentine and Indian SBM. Nevertheless,
soy meal is one of the fast growing categories of U.S. exports
to Vietnam, growing 491 percent in the first three quarters of
2008 (over the same period last year) to reach $55 million,
excluding the indirect shipments mentioned earlier.

7. (SBU) In addition to the roundtable dialogue and tour at Hung
Vuong Corporation and the visit to the Cargill feed mill, CODEL
toured a rice processing plant and observed some floating fish
farms in the Mekong River. The prior day, delegation members
met with the Vice Chairman of the Ho Chi Minh City People's
Council and with members from the American Chamber of Commerce,
where they learned more about the economic progress that Vietnam
has made and the challenges that remain.

Comment:
-------
8. (SBU) Municipal and provincial officials have now raised U.S.
"catfish" safety regulations with StaffDel Nelson (ref A), CoDel
Baucus (ref B) and CoDel Boswell, the three congressional and
staff delegations to visit the HCMC in the last two weeks. The
GVN is particularly sensitive about fish and seafood processing
because the industry employs two million workers (according to
industry estimates), many in poor areas. With exports falling
due to weak demand in Western Europe, Russia and Japan, Vietnam
is trying to head off potential issues that could further
depress exports. This also explains their great concern over
the potential switch of U.S. food-safety oversight for tra and
basa from FDA to what is widely accepted to be the more
restrictive USDA/FSIS regime. One GVN strategy has been to
emphasize the extent to which rapidly growing U.S. agriculture
exports -- expected to reach $1 billion for the first time this
year, up from $113 million just five years ago -- depend on
Vietnam's access to U.S. markets. End comment.

9. (U) This cable was coordinated with Embassy Hanoi. CODEL
Boswell did not have an opportunity to clear this message before
departure from Post.
FAIRFAX

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