EFFECTS OF GREEN BARRIERS ON EXPORTING AGRICULTURE PRODUCTS AND SEAFOOD FROM VIETNAM TO THE US MARKET

MINISTRY OF EDUCATION AND TRAINING FOREIGN TRADE UNIVERSITY ---***--- DISSERTATION Effects of green barriers on exporting agriculture products and seafood from vietnam to the us mar

MINISTRY OF EDUCATION AND TRAINING

FOREIGN TRADE UNIVERSITY

MINISTRY OF EDUCATION AND TRAINING

FOREIGN TRADE UNIVERSITY

-*** -

DISSERTATION

Effects of green barriers on exporting agriculture products and

seafood from vietnam to the us market

Major: Master Programme of International Trade Policy and Law

Full Name: Nguyen Thi Bich SUPERVISOR: Dr Dinh Thi Thanh Binh

Ha Noi - 2017

ACKNOWLEDGEMENT

During the essay time, I have received many supports from my lecturers, family and all of my friends in terms of the knowledge, experience and the moral supports I would like to thank all teachers in Postgraduate Faculty especially Dr Dinh Thi Thanh Binh sincerely and gratefully for her guidance and advice during the dissertation time It can be sure that this study cannot be done without her help

I also want to send thankfulness to my family and my friends, my colleges who always besides to support and give me the inspiration for studying, encourage

me in the process of doing this thesis

Since my knowledge, practical experience during my work time and research is limited, so my essay contains inevitably flaws, I would like to receive the sympathy and comments from the teachers, colleagues and readers to help me to complete my essay better

Ha Noi, December 4 th 2016

Nguyễn Thi Bich

TABLE OF CONTENT ABSTRACT 

ACKNOWLEDGEMENT 

LIST OF TABLES, CHARTS AND MAP 

LIST OF ABBRIVIATIONS 

INTRODUCTION 1 

CHAPTER 1: THEORITICAL AND PRACTICAL BACKGROUND OF GREEN TRADE BARRIERS 6 

1.1 Overview about Green Trade Barriers 6 

1.1.1 Definitionof Green Trade Barrier 6 

1.1.2 Type of Green Trade Barriers 11 

1.1.3 Functions and influences of Green Barriers on trade 13 

1.1.3.1 Functions of Green Trade Barrier 13 

1.1.3.2 Influences of Green Trade Barriers on trade 14 

1.2 Green trade barriers in the US 15 

1.2.1 The US environmental relateted technical regulations 15 

1.2.2 Qualifications for imported products 16 

1.2.2 Some notices on importing goods of the US 22 

1.3 Experiences to improve exported products of some countries 23 

1.3.1 China’s experiences 23 

1.3.2 The US’s experiences 24 

CHAPTER 2: EFFECTS OF GREEN TRADE BARRIERS IN EXPORTING AGRICULTURE PRODUCTS AND SEAFOOD FROM VIETNAM INTO THE US MARKET 26 

2.1 Exporting agriculture products and seafood from Vietnam into the US market 26 

2.1.1 Introduction about the US market 26 

2.1.2 The trade relationship between Vietnam and the US 27 

2.1.3 Overview of agriculture products exporting of Vietnam into the US market 30 

2.1.3.1 Exporting agriculture products of Vietnam in general 30 

2.1.3.2 Exporting agriculture products of Vietnam into the US market 34 

2.1.4 Overview of seafood exporting of Vietnam into the US market 37 

2.1.4.1 Exporting seafood of Vietnam in general 37 

2.1.4.2 Exporting seafood of Vietnam into the US market 39 

2.1.5 Analysis advantages and disadvantages of Vietnam’s agriculture and seafood production that can affect the export of Vietnam to the US market 46  2.1.5.1 Achievements 46 

2.1.5.2 SWOT analysis 48 

2.2 Effects of US green trade barriers in exporting agriculture products and seafood from Vietnam into the US market 55 

2.2.1 Effects of US green trade barriers on agriculture products 56 

2.2.2.  Effects of US green trade barriers on seafood 59 

2.2.3 Cases involed in Green trade barriers between Vietnam and the US 66 

2.2.3.1 In Agriculture Products 66 

2.2.3.2 In Seafood (catfish) 67 

CHAPTER 3: SUGGESTED COUNTERMEASURES TO IMPROVE VIETNAM’S EXPORT INTO THE US MARKET 69 

3.1 Current regulations on Agriculture products and Seafood of Vietnam 69 

3.1.1 For Domestic production 69 

3.1.2 For Imported products 72 

3.2 Potential of Vietnam in exporting agricultural products and seafood into the US market 73 

3.3 Suggested solutions to improve Vietnam’s export capacity 74 

3.3.1 From the Vietnam’s authorities 74 

3.3.1.1 Ministry of Agriculture and Rural Development 74 

3.3.1.2 Ministry of Industry and Trade 77 

3.3.1.3 Ministry of Science and Technology 79 

3.3.2 From Business Associations 80 

3.3.3 From Individuals 83 

CONCLUSION 84 

REFERENCES 85 

LIST OF TABLES, CHARTS AND MAP

Table 1: Some Green Trade Barriers were used by the US

Table 2: Banned substances in growing and producing

Table 3: Approved drugs in growing and producing

Table 4: Export – Import situation between Vietnam and the US from 2006 to

4 months of 2016

Table 5: 10 Key exported Products of Vietnam

Table 6: Some main markets of Vietnam’s agriculture products

Table 7: Some key agriculture products of Vietnam exported into the US

market Table 8: Importing seafood of the US from Jan to May of 2016

Table 9: Value of exported Catfish by market

Table 10: The most 5 Shrimp suppliers for US market, Jan-May/2016

Table 11: The biggest importer of canned tuna of VN in 2015 and 2016

Table 12: Catagories of Vietnam’s population in age

Table 13: Number of enterprises exporting rice and containers be returned Table 14: The number of Vietnam’s shrimp and seafood shipments was returned

by US and reasons Table 15 45 Vietnamese companies having right to process seafood and export

into US market

Chart 1: Trade turnover Vietnam- US in period 1994 – 2015

Chart 2: Vietnam’s exported products into the US market in 2015

Chart 3: Export – Import turnover of Vietnam into the US market from 2006 to 4

months of 2016 Chart 4: Value of exporting agriculture products from 2010 to 2015

Chart 5: Export turnover of Coffee, Rice and Rubber from 2009 to 2016 of

Vietnam

Chart 6: Value of Vietnam’s agriculture products exported into the US market

from 2010 to 2015 Chart 7: Exporting seafood of Vietnam from 2000 to 2015

Chart 8: Importing Pangasius and Catfish from Vietnam of US

Chart 9: Importing Catfish of US in 5 months of 2016

Chart 10: Importing Frosen Pangasius from Vietnam

Chart 11: Vietnam tuna exports in 2015-2016

Chart 12: Value of exporting agriculture products of Vietnam into the US from

2003 to 2005

Chart 13: Value of pangasius exported from Vietnam into the US from 2013 to

2015

Map 1 : Trade Barrier System

Map 2 : Cooperating among Ministries

LIST OF ABBRIVIATIONS

APEC Asia-Pacific Economic Cooperation

APHIS Animal and Health Inspection Services

ASC Aquaculture Stepwardship Council

ASEA

N Association of Southeast Asian Nations

BAP Business Application program

COOL Country of Origin Labeling

CPD The Center for Policy Dialogue

CPSC The United States Consumer Product Safety Commission DOC Department of Commerce

EPA Environmental Protection Agency

ERTM The environment-related trade measures

FDA The Food and Drug Administration

FSIS Food Safety and Inspection Services

FSMA FDA Food Safety Modernization Act

GAC General Administration of Customs

GATT The General Agreement on Tariffs and Trade

GDP Gross Domestic Product

GOC General of Custom of Vietnam

GSO General Statistics Office Of Vietnam

HACC

P Hazard Analysis and Critical Control Points

HHS Department of Health and Human Services

ISO International Organization for Standardization

ITC United State International Trade Comission

MARD The Ministry of Agriculture and Rural Development MOIT The Ministry of Industry and Trade

MOST The Ministry of Science and Technology

A North American Free Trade Agreement

NMFS National Marine Fisharies Services

SPS The Agreement on the Application of Sanitary and Phytosanitary

Measures

TBT Technical Barrier to Trade Agreement

TPP the Trans-Pacific Partnership Agreement

TREM The trade – related – environment measures

TRIPS The Agreement on Trade-Related Aspects of Intellectual Property Rights

US CS United State Custom Service

US TR United State Trade Representative

USDA U.S Department of Agriculture

USITC United State International Trade Commission

VASEP Association of Seafood Export and Vietnam

WTO World Trade Organization

Vietnam is an agriculture countries with high percentage of agriculture sector

in total Gross domestic product (GDP), Therefore, Vietnam’s agriculture products have been affected strongly when taking part in international relationship with other countries In reality, Vietnam’s export agriculture products faced a lot of difficulties

in satisfying requirement of importers, some Vietnam’s cargoes were under- standard level when being checked by authorities, causing damages for Vietnam’s economy in general and export enterprises and producers in particular Therefore, the study of green barriers and green barriers effects on agricultural products to exports of Vietnam is a necessity, as Vietnam is in the process of international economic integration Then, helping Vietnam’s agricultural products to cope up

2 with and overcome these barriers and build up image and reputation of Vietnam's agricultural products on world markets

Regarding main markets for Vietnam’s agriculture products, the US has been long- lasting and potential one, however, USA created a wide and strict system of green barriers to imported products These influenced much on Vietnam economy That is reason why I have chosen the topic: “Effects of Green Trade Barriers in exporting agriculture products and seafood from Vietnam into the US market” for

my graduating thesis

2 Literature review

Due to the strong popularity of Green barriers in international trade, so the issue has attracted the attention of almost authorities, sectors, scientists domestically and abroad There were many essays and research articles, books at different grades mentioned this issue can be listed as follow:

From foreign writers : Up to now, there have been three typical foreign

researchers and organizations had studied on green trade barriers, including : the first one is working paper title “Unilateralism Europe - Environmental Trade Barriers and threats to the prosperity of commerce are increasing” by APEC Study Centre (Australia) which published in 2003 The topic has received high attention

of Pi C & E companies when they compiled and released book: “Handbook of

“Green barrier” in the WTO” in 2007 In addition, in 2009, the group of authors from the Centre for Policy Dialogue Bangladesh (CPD)had paper entitled

“Environmental Barriers and WTO” Professor David Hanson of the University of Duquesne US published the book: “The barriers to free trade: the non-tariff barriers

in the European Union, Japan, the United States” in 2010 Lastly, in 2014, author Emilija Miteva Kacarski had paper in the journalapplied science and business economics titled “Non-tariff Barriers in some developing countries (the case of the

US, EU, Japan)” However, there is no specific paper or research mentioning about green trade barrier system in the US and effects of these barriers on Vietnam’s export activities

3

From domestic writer : In domestic, the number of research studying on green

barrier were big However, most of them did not mention directly on green barriers, they only discussed aboutenvironmental regulations in trade and similar thing Including : In 2005, Bui Huu Dao has writed a article titile“Improving the abilitty to meet the regulations and international standards on environment for some export commodities of Vietnam” publishing on the trade magazine No 19 or Nguyen Huu Khai has talked about the same topic in book:“Eco-labels for goods for export and domestic consumption” Afterward, in 2006, authors Le Hoang Lan had writen an article in Tia Sang magazine: “Environment threatsand opportunities when joining WTO” In 2007, Group of authors including: Nguyen Huu Khai, Vu Thi Hien,Dao Ngoc Tien compiled and published the book “Managing the import operation: Mechanism, policies and measures” In 2008, author Dao Thi Thu Giang published the book “The measures exceed Non-tariff barriers for exports of Vietnam” In

2012, a group of authors including: Lawyer Hoai Nam, PhD Bui Huu Director, Dr Hoang Thanh Tung compiled and published the book: “Environmental Challenges

in International Trade” In the same year, when mentioning about solutions to improve environmental problem in trade, reseacher Dinh Van published in the Journal his research projects of state level called: “Assessment current situation and the proposal construction of non-tariff measures in trade in order protect the environment” And an essay title “Vietnamin the fight against international trade barriers” published on Journal of the Communist Party of Doan Cong Khanh - Director of Center for Business and the Environment Lastly, in 2014, Doctor Nguyen Thi Tuong Anhwrote in the Journal of Finance: “Building Non - Tariffs barriersin some countries in the world”

Each of above researches has studied a corner of Green trade barrier such us: Some tools in Green trade barriers – ecolable (Nguyen Huu Khai, 2005); effects of Green trade barriers – Environment barriers to international trade in general (APEC study center – 2003); how to adapt to and overcome environmental barriers (Bui Huu Dao, 2005; Dao Thi Thu Giang, 2008…) However, there is no research, book mentioning all aspects of issue and give official definition about green trade barrier

4

3 Research question

This thesis will answer a question: “How some green trade barriers affect on exporting agriculture products and seafood from Vietnam into the US market?” To

solve this question, the study will:

Fistly, find and analyze some green trade barriers of the US

Secondly, examine effects of these barriers on exporting agriculture products and seafoods of Vietnam into the US market

Lastly, give some countermeasures for authorities, enterprises and local to satisfy not requirements of of the US market and other countries in the world

4 Objective and scope of research

4.1 Objective of research

The research focus on how green trade barriers or environment barriers of the

US effect on Vietnam’s export activity of agriculture and seafood production and solutions to improve Vietnam current export situation

4.2 Scope of research

Scopes of the research include: the US green trade barriers were applied for agriculture products and seafood; Export activity of agriculture sector of Vietnam and effects of barriers on Vietnam’s agriculture commodities in the past

5 Methodology of research

- Statistical discription: The topic uses statistics from the General Department

of Statistics and some information source trusted With the support of the data processing software to be able to assess systematically, reliable enough to serve the purpose of the research study

- Analyzing; comparing datas: Analytical methods help find specific points,

details of green barrier Comparative approach helps see the differences between the effects of green barriers of the US to agricultural export situation in Vietnam The results of analysis, evaluation and synthesis of obtained information are resultsof the study metting the objectives and tasks of the topic

- Chapter 1: Theoretical and practical background of Green Trade barriers

- Chapter 2: Effects of green trade barriers in exporting agriculture products and seafood from Vietnam into the US market

- Chapter 3: Suggested countermeasures to improve Vietnam’s export activities into the US in particular and other markets

6

CHAPTER 1: THEORITICAL AND PRACTICAL BACKGROUND OF

GREEN TRADE BARRIERS

1.1 Overview about Green Trade Barriers

1.1.1 Definitionof Green Trade Barrier

In recent years, international trade between countries has been heavily increasing with diversify of products When taking part in an international trade relationship, each country has opportunities to show up its strengths as well as has

to face difficulties brought by partners, especially in relations between developing countries and developed ones Therefore, it is necessary for countries to set up their own barriers in trade to protect themself

Trade barriers are measures that governments or public authorities of a country impose to all kinds of imported products to make imported goods or services less competitive than locally produced goods and services However, not everything preventing or restricting trade can be characterised as a trade barrier There are two types of trade barriers popularly used in international trade : Tariff barriers – tax on imports and exports; Non – tariff barriers -barriers that restrict import or export of goods or services through instruments : Import/export licenses; quotas; subsidiaries; embargo…

Nowadays, the global economy has been more and more developing; countries begin to take much care about environmental problems and health of mankind Therefore, besides applying Taiff barriers in trade with foreigners, countries also used non – tariff barriers not only to restraint imports, protect domestic producers but also to protect environment, human’s health

Throughout 1992 to 1996, there were a number of multilateral environmental agreements discussing about international frameworks, however, they could not get consistency and coherence And, the most important issue was controlling environmental problem in applying green trade barriers Although debates and controviersies exited, they got agreement of imposing green trade barriers as a non- tariff barrier Day by day, all countries become familiar to green trade barriers as a

7 method of non – tariff barrier, they are trade barriers restricting imports and exports

of good through forms of import quota; licences; embargo; origin of goods…

Up to now, there have been a number of writers and researchers had studied

on Green trade barrier A lot of articles, newspapers were published, however, there

is no official definition of Green barrier in trade Some authors mentioned Green barrier in trade as followed:

According to the Ministry of Natural resources and Environment - Mai Ai Truc’s speech in Sai Gon Liberation newspaper about main content of Green

barrier: “Strictly safe standards for food and products which directly serve people’s live such as household appliances, textile products, footwear, plastics ”

According to Le Hoang Lan wrote on Tia Sang magazine, she has considered

Green barriers as Environmental measures: “Environmental measure is a system of environmental regulations in production, from use of raw material to level of technology in producing; from waste disposal to recovery and recycling; from adoption of measures to reduce emissions to the implementation of environmental management”(Le Hoang Lan, 2006)

From above definitions, it can be seen that Green Barriers are measures including provisions relating directly or indirectly to environment such as animal and plant quarantine and safety food These regulations relate to environmental protection and public health purposes And, Environmental Barrier is an environmental regulation with functions to protect environment and people health

To some extend, Green Barriers can be understood widely as Environmental Barriers

When talking about environmental regulations in trade In some aspect, the concepts trade – related – environment measures (TREM)s or environment- related – trade measues are preferred The Economic Committee of APEC give definitions

of two terms as:“The term trade-related-environment measures (TREMs) or environment-related trade measures (ERTMs) are also used to refer green trade barrier“ In one survey on the reality of TREMs and ERTMs in APEC, for

instance, the Economic Committee of APEC defines these two measures as:

8

“Trade-related environment measures have a relatively wide coverage They refer

to environmental measures with significant trade effects, including laws, regulations, and administrative measures as well as regional and multilateral agreements that are formulated and implemented or signed by APEC member economies Environment-related trade measures refer to national trade laws, regulations as well as administrative measures enacted to achieve a specific environmental goal or for environmental purposes, including trade-related measures adopted by individual economies pursuant to the multilateral environmental agreements Examples of ERTMs include bans, restrictions, or permit requirements in respect of imports or exports”

“The rade-related-environment measures (TREMs) are increasingly used as

an important measure of technical barrier system Developing countries and developed ones have used them popularly and efficienly to control the imports of environment – related products and to protect domestic - related industries” (Le

Hoang Lan, 2006)

In World Trade Orgnization (WTO), there is no Agreement on Green Trade Barrier, however, in some Agreement; Green Trade Barrier is also mentioned in some Agreements as followed:

Article XX of The General Agreement on Tariffs and Trade (GATT 1994):

“Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade, nothing in this Agreement shall be construed to prevent the adoption or enforcement by any contracting party of measures: (b) necessary to protect human, animal or plant life or health”

It means that, although members countries have to grant the equal treatments

to all members in WTO and give no discrimination to any country, they have right

to appy necessary measures which are not comformity with regulation of GATT with purposes of protection for human and animal health However, members can

9 not take advantages of this Article to create discrimination and disguised restriction

to other countries’ products

In article 2.2 ofTechnical Barrier to Trade Agreement (TBT):“Members shall ensure that technical regulations are not prepared, adopted or applied with a view

to or with the effect of creating unnecessary obstacles to international trade For this purpose, technical regulations shall not be more trade-restrictive than necessary to fulfil a legitimate objective, taking account of the risks non-fulfilment would create Such legitimate objectives are, inter alia: national security requirements; the prevention of deceptive practices; protection of human health or safety, animal or plant life or health, or the environment In assessing such risks, relevant elements of consideration are, inter alia: available scientific and technical information, related processing technology intended end-uses of products”, The TBT

Agreement require members not to apply regalation creating obstacle to internatinal trade, however, it notices that when achieving purposed of keeping human healthy and safe or protecion of environment, members can adoptthese measures

In article 27 of Section 5 of Intellectual property rights and the TRIPS

Agreement (TRIPS) mentioned Provisions Relevant to green trade barrier:“2

Members may exclude from patentability inventions, the prevention within their territories of the commercial exploitation of which is necessary to protect ordre public or morality, including to protect human, animal or plant life or health or to avoid serious prejudice to the environment, provided that such exclusion is not made merely because the exploitation is prohibited by their law.3 Members may also exclude from patentability:(a) diagnostic, therapeutic and surgical methods for the treatment of humans or animals;(b) plants and animals other than micro-organisms, and essentially biological processes for the production

of plants or animals other than non-biological and microbiological processes However, Members shall provide for the protection of plant varieties either by patents or by an effective sui generis system or by any combination thereof The provisions of this subparagraph shall be reviewed four years after the date of entry

into force of the WTO Agreement.”

10 The above Agreement recommends that one country can exclude patent of any inventions that affect directly or indirectly on environment, health of mankind or animal, plant in itsterritory

Article 2 of Agreement on the Application of Sanitary and Phytosanitary

Measures(SPS) “Members have the right to take sanitary and phytosanitary measures necessary for the protection of human, animal or plant life or health, provided that such measures are not inconsistent with the provisions of this Agreement.”

For the purposes of the SPS Agreement, sanitary and phytosanitary measures are defined as any measures applied:

• To protect human or animal life from risks arising from additives, contaminants, toxins or disease-causing organisms in their food;

• To protect human life from plant- or animal-carried diseases;

• To protect animal or plant life from pests, diseases, or disease-causing organisms;

• To prevent or limit other damage to a country from the entry, establishment

or spread of pests”

Until now, it has have over 140 international agreements on the environment and other international instruments in the field of environment Among them there are about 20 Agreements contain provisions relating to international trade Some TREMs are: International Organization for Standardization (ISO) 14000 (aremarkable content relating to ecolabel), ISO 9000, Hazard Analysis and Critical Control Points ( HACCP) standard systems used in developed countries (US and EU) to control toxic substances in food, mainly in meat, fishery with aims to ensure the safety and suitability of food HACCP system adopts sanitary rules to control each stage of the food processing from primary production to final consumption, allowing users to have access to the hazard and set the control system focusing on preventing rather than relying on testing the final products

So, it can be concluded that Green Trade Barrier is known as a kind of non – tariff barrier in international trade system and regarded as Environmental Barriers,

11 which consists a system of regulations each country can directly or indirectly apply

to protect human and animal’s health, environment, plants Most regulations are compulsary to goods imported in a countries, therefore, it alarms countries that, if they want to enter a domestic market of a country, they are required to know, understand fullfilly it’s own goods to satisfy destinate market

Map 1 : Trade Barrier System

Source: Self – studying

In the thesis, it will only focus on analyzing provisions relating to quality of imported products of Green trade barriers in protecting human’s health and restrainting spread of foreign producers

1.1.2 Type of Green Trade Barriers

Green Trade Barrier is a new barrier in international trade – a new field to researchers A wide range of researchers studied about this theory, each of them had their own ways to access and make comments on this Therefore, each publish had different way to classify type of Green Trade Barrier Some of them are mentioned

as followed:

According to a group of authors performing the study "European Unilateralism - Trade related environment Barriers and the gradually increase of

12 threats to the prosperity of commerce”the APEC Research Center (Australia) and Monash University, Environmental Barriers are divided into 4 groups:

•The Trade related Environment barriers

• The potential Trade related Environment barriers

• Using of environmental standards, safety, eco-label as barriers to protect domestic products, restrict imported products and technology with the reason that theseproducts and technologies do not meet the regulations on environmental protection, food safety of home country

According to research by the Center for Policy Dialogue - CPD Bangladesh (2009), environmental barriers be divided into 3 groups:

• Standards and environmental regulations are divided into two groups consisting of the standards of products and that of production process Product standards include regulations on goods quality that products must achieve are requirements on the form, the minimum nutrient content, content of toxic substances or emissions maximum Meanwhile, the standards of the production process related to the production conditions of that product

13

• Provisions on eco-label: Eco-labels must provide enough information for producers and consumers about the product's impact on the health of consumers and the environment In addition, eco-labels also provide some further information about the product quality and production conditions of the products Eco-labels can

be voluntary or mandatory

• Economic instruments such as environmental taxes and charges: That charges and taxes are calculated based on characteristics of product such as sulfur content in the crude oil or the crude oil products are also taxed The purpose of this tool is to increase budget and to orient production and consumptionbehaviors – no production and consumption of high-taxed products

Though how many ways to classify Green Trade Barriers are mentioned, all of them are recommend documents for exporting countries to apply in real situation of each country in international trade

1.1.3 Functions and influences of Green Barriers on trade

1.1.3.1 Functions of Green Trade Barrier

In reality, although the national government supportedfor trade liberalization, they have erected barriers to trade, the form may change, but the scope and extent of these barriers are increasing in order to achieve the following purposes:

• Political purposes in international trade: some countries with huge economic potentials, typically the US and some Western European countries, often use economic measures in order to make a certain political purpose Due to these barriers, the government of these countries may conduct embargo part or full, restricted or give favorsfor the commercial activities of another country

• The national interests purpose: Trade barriers are used mostly in countries around the world to fulfill the following objectives:

- To protect domestic production and workers

- Toprotect consumers through restrict imports of the products do not meet quality standards and be nvironmentally unfriendly

- Protecting national security

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- Environmental Protection

1.1.3.2 Influences of Green Trade Barriers on trade

Normally, Import countries impose Green trade barriers on export countries to protect their human resources, health of mankind and animals and limit environmental problems in the modern international trade However, when applying these measures, not only exporters but also importers have to bear positive and negative effects

To Importers

• Positive effects: As functions of Green Trade Barrier has mentioned above, Green Trade Barrier restraints entering of foreign products into a country that promotes development of domestic production, and build a stable national economy; reduce competitiveness for domestic enterprises Moreover, importers’ consumers have opportunities to consume good, healthy products leading to

adecrease of diseases Environment is fresh, clean for people, animal to breathe

• Negative effects:There are two sides to everything and this case is not an exception Importers also face up with difficulties: when import activities were restrained, the number of products imported reduces limits choices of consumers; the domestic producer may raise the price of products so consumers will cost more money to get such products of import Beside, when import was limit, there is no competitive environment for producers to change their products or get innovation in

production system to upgrade product’s quality

To Exporters

• Positive effects:Facing up with strict regulations of import countries, exporters need to change their awareness of production behavior Technology needs to be invested, production process needs to be changed Simultaneously, their citizens can have access to modern technology, get higher quality products and enjoy healthier

living environment in their own countries

• Negative effects: The most difficulty to exporters is that expensive cost

They cost money on investing machines, change technology and seriously, their

products are at risks of being sent back due to unsatisfaction

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1.2 Green trade barriers in the US

As many developed countries in the world, the US also built its own Green Trade Barriers These barriers in the US were shown in diversify of technical standards relateto environment, trade measures with aimes to protect the environment, protec national economy and protect animal, human health The US environmental requirements system may be set by the authorities or the contructive private sectors Requirement set by the constructive private sectors can be put up on the officialtechnical regulations and be mandatory if the authorities find necessary The US Customs Agency is responsible for enforcing technical requirements in border and coordinating with the concerned agencies in the management of imports

1.2.1 The US environmental relateted technical regulations

The US environmental related technical were identified for stringent by trading partners These standards and technical regulations set various type of criteria relating to the size, shape, design, length and the functions of the products Beside, the government’s regulations on punishing or encouraging consumersto consume a certain product for purposes of environmental targets affecting trade should also be considered as technical regulations A number of environmental regulations affecting US agricultural exports could be:

- Provisions on packaging, packaging of wastse: The US launched this regulation with aims to minimize wastepackaging from households in order to protect the environment

- Pesticide residues in crude agricultural products (unprocessed fruits, vegetables, grains, tubers ): Limit amount of pesticide residues for specific products reagulated bythe US Enrivonmental Protection Agency (EPA) Any Processed foods containing any pesticide residue which not tobe excepted orhas no prescribed limits were consider as low quality goods If there was a limit, pesticide residues will not be considered affecting the quality of products for immediate consumptionif the residues do not exceed permitted limits for suchcrude agricultural good

to producestandard organic foods and protect environment

1.2.2 Qualifications for imported products

Qualifications for imported product are applied very rigorous and extremely sophisticated that makes it difficult for foreign exporters to enter the US market This is also a kind of effective environmental barriers in the US (some barriers were listed below table) All products imported into the US market must pass the inspection of US Food and Drug Administration (USFDA)

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Table 1: Some Green Trade Barriers were used by the US

Year Barriers Products

1967 Restrainting product coming from countries

performing ineffectively international reserve Act

Amended Decre (22 USC 1978) Fisherman

1995 Hazard Analysis and Critical Control Points -

HACCP

Seafood, Foods (Meat,

eggs,poultry)

1996 Authorizing and requiring pesticide residues test in

agricultural products

Agriculture products

1996 Requirements for sampling and testing of food

2002 Farm Bill 2002 (new law continues many

innovations of the 1996 Act) Agriculture Sector

2002 Bioterrorism Act

Agriculture products and Seafood

2005 Country of Origin Labeling

Label on Fish and shellfish covered commodities

2008

The Food, Conservation, and Energy Act of 2008 –

Farm Bill ԛ2008 Country of Origin Labeling

-COOL

Label on chicken, goat, macadamia nuts, pecans, and ginseng as

covered commodities

2011 FDA Food Safety Modernization Act (FSMA) Food safety

2014 Agricultural Act of 2014 (Replace Farm Bill 2008) Agricultural and

food

(Source: the author’s collection from many different sources)

18 From above table, number of the US’s barriers are so many Some typical ones including:

- Eco-lable (1992) has been applied for all domestic and imported agriculture products and seafood : all products are required to fulfill all needed requirement : where/when/what/How they were produced; level of energy comsumption, environmental pollution and so on For some imported seafood, It is required for exporters to label their product match with requirement of domestic ones

- Farm Bill: This Act have 3 edition: Farm Bill 2002; Farm Bill 2008 and Farm Bill 2014 (Agriculture Act) – An important notice for foreign and domestic producers That includes general requirements for all products in the US’s market system

As a rule, the imported goods must meet standards the same as standards of goods produced in the US For example, some provisons relate to fields like:

Product Safety

Any product offered for importation into the US market will be checked for complying with an applicable product safety standard or regulation or with a specified labelling or certification requirement The US’s authorities will determined whether these products need to present a substantial product hazard These requirements are administered by the The United States Consumer Product Safety Commission (CPSC)

So, to increase compliance rates of consumer product safety, the CPSC strongly recommends manufacturers to fully comply with both CPSC mandatory standards and private sector voluntary standards

Marking and Labelling Requirements

According to the COOL – 2008, US customs laws require each imported produced to be marked in a conspicuous place, as legibly, indelibly and permanently as the nature of the article permits, with the English name of the country of origin to indicate to the ultimate purchaser in the US the name of the country in which the article was manufactured or produced So, if imported cargoes don’t satisfy these regualtions, they can’t enter the US market

19 Beside, to agriculture sector in particular:

-To Agricultural products:

Agriculture producted exported into the US market had to follow provisions of the US Farm Bill 2002; 2008 and Agriculture Act 2014… - Name of producer must

be recorded on meat products sold in the market:the meat is sold on the US market must be regulated clearly where an animal was born, raised and processed where - according to regulations, this is caused a lot of difficulties in accounting documents for the business in the meat industry and other related regulations

Besides, some other regulations on specific groups of products are mentioned

be imported into the United States The maximum permitted level applicable to nuts, and peanut products and Pistachio nuts is from 20 PPB (20 mg / kg)

+ Canned vegetables: FDA has specific regulations to differentiate products, quality and thickness for various types of canned vegetables FDA set the minimum specifications for canned vegetables softness, color In addition, canned vegetables must meet standards due to FDA regulations on thickness For example, for canned corn, canned tomatoes, water and ingredient must account for more than 90% of the total volume of the box, or the minimum weight of the ingredient is 50% water storage capacity of the box

- To Seafoods:

In comparison with other similar markets as EU, Japan or Canada, The US’ market used to be easier for imported goods to enter For example, to seafood, if EU checked 20%-50% quantity of imported seafood for employing banned substances (Japan: 18%; Canada: 15%), the US only checked 2% of that However the situation

20 leads to appearances of unqualified products So, it is required to set up a system of regulations to protect the US’s consumers and environmental related problems Some of them are:

+ Bioterrorism Act 2002: designed to protect the U.S from bioterrorism + Certain Country of Origin Labelling (COOL) Requirements, it entered force

in 2009, this required exporters to provide origin of products exported into the US market

+ Food Safety Modernization Act (FSMA) was born in 2011, it contains new provisions and be effective instrument for FDA to control imported products into the US market

+ The National Marine Fisheries Service (NMFS) proclaimed a new regulation that the US will not import seafood from countries exploiting eradicatly not match the US’s standards

Besides, the US also listed a number of banned substances or approved drugs can be used for grow and produce kinds of seafoods:

Table 2: Banned substances in growing and producing Number 11 banned Substances/Lable Subtances

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Table 3: Approved drugs in growing and producing

Approved Aquaculture Drugs Immersion

Chloramine-T HALAMID® Aqua - NADA 141-423

Formalin

Formalin-F™ - NADA 137-687 Formacide-B - ANADA 200-414 Parasite-S® - NADA 140-989 Hydrogen peroxide 35% PEROX-AID® - NADA 141-255

Oxytetracycline

hydrochloride

Oxymarine™ – NADA 130-435 Oxytetracycline HCl Soluble Powder-343-ANADA 200-

247 PENNOX 343 - ANADA 200-026 TERRAMYCIN 343 (oxytetracycline HCl) Soluble Powder – NADA 008-622

TETROXY Aquatic - ANADA 200-460 Tricaine

methanesulfonate Tricaine-S – ANADA 200-226

Supplemental approval, coldwater disease in salmonids Aquaflor® - NADA 141-246

Supplemental approval, furunculosis in freshwater-reared salmonids

Aquaflor® – NADA 141-246 Supplemental approval, streptococcal septicemia in freshwater-reared warmwater finfish; columnaris disease in freshwater-reared finfish; and increase the dose for enteric septicemia for catfish

Source: FDA U.S FOOD&DRUG Administration

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1.2.2 Some notices on importing goods of the US

The US’s agencies control imports: the US has authorities specializing in import operations management; these bodies form a efficient and monitoring system The authorities controlling imports of the United States include:

- The Food and Drug Administration (FDA)

- Environnemental Protection Agence (EPA) –National Marine Fisharies Services (NMFS)

- Food Safety and Inspection Services (FSIS)

- Animal and Health Inspection Services (APHIS)

- U.S Department of Agriculture (USDA)

- US Department of Commerce (US DOC) –US Department of State (US DI)

- United State International Trade Commission (US ITC)

- United State Custom Service (US CS)

- U.S Consumer Product Safety Commission (CPSC)

- United State Trade Representative (US TR)

- Department of Health and Human Services (HHS)

The US market is a huge and potential market and a large number of foreign exporters want to access, however, this market also creates embarrassments Some

of them are:

- Level of adopting some international standards in the US: Some international standard like ISO 9000 – Quality management and ISO 14000 – Environnemental management are adopting many countries, using these standards

in the US is quite low In addition, when joiing TBT, the US goverment commited that the US will widely applying international standard However, in reality, a number of international standards were not known in the US and some US’s standards are inconsistent with rest of the world So, it is difficult for exporters to recognize standards applied in the US to follow

- Secondly, in the US, there is no union market, each state in the US has it own regulations/ barriers imposed for imported products in its teritory.Therefore, it costs foreigners on change standards to suitable with standard of regions they want to

23 access and limit their compatitive capacity due to high price in comparision with domestic products

- Thirdly, the US is a big country but it depends on the third country’s compulsary certificates It means that, during testing process of imported products, the US agencies also refer to quality certificates of the third coutry leading to unreasonable costs for foreign suppliers

- Lastly, specific regualtions seafood: Normally, in almost countries in the world, it is allowed to use all type of antibiotics except for forbidden substances However, in the US, seafood only contains allowed substances and others are forbidden Nowadays, there are only 6 types of antibiotics are allowed to use in US This regulation limits capacity of seafood products exported into the US market Exporting products in the US market brings huge benefits for exporters; however, to ensure products being accepted and satisfy the US consumer’s consume habbits, it requires foreigners tobe wise and ready to change

1.3 Experiences to improve exported products of some countries

1.3.1 China’s experiences

Like many ASEAN countries, agriculture trade also plays an important role in China’s foreign trade, and be impacted by green trade barriers So, China’s goverment has fully efforts to regulate China’s agriculture productions with the accurate use of the green trade barriers when exporting its products abroad.Global and China’s experts have done a lot researchs about the effects of green trade barriers to China’s export activivites in both positive and negative sides but they has focused on negative side to find out countermeasures to surmount these weaknesses.Some of them are:

- Improve the quality of international trade

It is really necessary for China to improve the quality of international trade and optimize trade structure, promote research and application of science and technology in production and processing of agricultural products, which make China’s products achieve the environmental standards and improve the quality of

24 export products In addition to this, China’s government also focused on improving the domestic environmental and safety standards to create environmental and security standards, create foundation for changing in China’s export

- Promotingchanges of export through each stage which was suitable with the economic situation

In each state of economic development, it required China’s goverment to change exports, in line with the economic situation in the country and international Measures are used including:

Decreasing the level of controlling export activities exports through measures

to adjust the exchange rate, set dual exchange rate regime and a series of measures

to support exporters, including the use of the state budget to subsidize exports Arguably this is the stage of the reform of policy instruments to promote agricultural exports in China

The enterprise unified price competition, it means that, China’s corporations bought raw material together with only one price This policy reduces competition

in purchasing raw materials between corporations No longer competitive situation, gives producers reasonable raw materials price The producers have the opportunity

to reduce income costs and increase their competitiveness The enterprise is ready to meet all the needs of customers from low to high It is reason why in all markets in the world, China's agricultural products always have lower prices for the same products in comparision with that of other countries

Applying these official methods, China can get a bright agricultural trade export in the future

However, the Chinese export activitieshas mainly concerned in quantity, slightly raising foreign currency revenue, so income per unit of goods was low, reduce the effectiveness of the activities of the Chinese exporters It is also a reason for Vietnam to balance “quantity” and “quality” in export activities

1.3.2 The US’s experiences

Prohibition of importing marine products, crabs and tuna from countries which

do not obey the American environmental regulations The USA has

25 also imposed export restrictions and control on national security

The US has a developed economy which countries desire it is evidence of continueously striven process so the US market also requires high standard products and put pressures for exporter countries For example, to seafood, the US’s goverment probited import crabs, tuna from countries which do not follow the American environmental regulations or imposed export restriction national security

to all imported products Simultaneously, the US’s goverment always pay much more attention on its exported activities especially on export of agriculture products

to maximize profit and keep its stand in international trade

- Promoting application of scientific advances - technologies

Up to now, the US has owned almost modern technologies of the world, so American agriculture production and aquaculture areequippedhigh technologies, agriculture is formed on the basis of a system of production and business organization, linking agricultural production to industrial production; circulationservices; supply materials and consumption All the stages form a network called Agribusiness Thus, American agricultural products were produced

at low cost and high quality This is an important factor to help US can compete with products of other countries in the world market

- Focusing on developing the agricultural products have a competitive advantage

In the world American is a minor aquaculture producer, it mainly import fishery products and stand in the first rank of importing fish and fishery products of the world and be an young agriculture However, with advanced technologies and mangement skills as well as great potential and favorable conditions for agricultural production American has advantages to produce its strong crops and livestock like corn and continue to hold an importan role in international trade of agriculture products and seafood

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CHAPTER 2: EFFECTS OF GREEN TRADE BARRIERS IN EXPORTING AGRICULTURE PRODUCTS AND SEAFOOD FROM VIETNAM INTO THE US MARKET

2.1 Exporting agriculture products and seafood from Vietnam into the US market

2.1.1 Introduction about the US market

The US is a big country with huge economy and be the most competitive one

in the world The main customs territory of the United States includes the 50 states with population of 321.418.820 (2015) It has the world's largest economy and be one of the world's most significant economic markets

GDP per capital in the USA in 2015 was 51.248,21 USD, and American total GDP stood the first position with 18.3 trillion US dollars, accounting for 17% of global GDP

The USA’s growth in 2015 reached 5% in comparision with year of 2014, this rate was smaller than some countries like China (9%); India (9.8%) or Korea (7.7%), however, America still had the high growth rate compared that of developing countries in G8

Regarding economic restructuring: Currently, 80% GDP of US comes from service sector Industry sector and agriculture sector only accounts for 18% and just 2% respectively It is focasted that the ratio of serverce will continue to increase in the future America is very strong and dominant country information in fields of monetary, finance, commerce, technology Beside, The USA also plays a key role

in development of the world through supplying capital, engineering, technology and

be the most important market The main trading partners are members of WTO, NAFTA, some countries have signed bilateral agreements with the US And, Vietnam is one of them

With above figures, The US has been a potential market for all countries in the world including Vietnam

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2.1.2 The trade relationship between Vietnam and the US

After Vietnam War in 1975, Vietnam and the US have had no economic relation until 1995, when Bill Clinton – the US president announced the formal

normalization of diplomatic relations between the the US and the Vietnam on July

11 Vietnam and the US signed Bilateral Trade Agreement in July 2000, which went into force in December 2001 From that, the relation with the US opened up new chances for Vietnam’s economy to grow

Chart 1: Trade turnover Vietnam- US in period 1994 – 2015

Source: General Statistic Office of Vietnam (GSO)

From the chart, in general trade turnover of Vietnam with the US significantly and gradually increased from 1994 to 2015 from 0.23 billion dollar to 41.43 billion dollar Particularly, in 2015, the US was one of the five biggest trade partners and was the first imported market of Vietnam The bilateral trade between Vietnam and the US reached 41,43 billion Dollar as mentioned before, which accounted for 12,64% total international trade of Vietnam Beside, Vietnam exported 38 groups of products into the US market equal to 33.73 billion dollar There are some groups of goods exported into the US market in 2015:

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Chart 2: Vietnam’s exported products into the US market in 2015

Source: General Statistic Office of Vietnam

In 2015, Vietnam exported 5 main groups of product including textile, sewing products (33%); Footwear (12%); Wood and wooden products; Computers and parts and Telephones and their parts, each group accounted for 8% into the US market

Regarding to Trade balance with the US, in 4 months of 2016, according to data from General Customs of Vietnam, The US was the second trade partner of Vietnam (the first one was China) with import – export turnover reached 13.92 billion USD which accounted for 13.3% national total turnover and increased by 13,5% in comparison with the same stage of 2015

Other  machinery, instrument, accessory Footware

Textile, sewing products

Wood and wooden products

Bags, pockets, wallets, suitcases, h ats and umbrellas