Vietnam could lose US$480 million per year due to illegal fishing

HANOI (Vietnam News/ANN) -- As the third largest seafood exporter in the world, Vietnam could lose about US$480 million per year if it fails in its fight against illegal, unreported and unregulated (IUU) fishing.
The Vietnam Association of Seafood Exporters and Producers (VASEP) and the World Bank on Tuesday announced its latest report on the economic impact if Vietnam fails to obey regulations set by the European Commission.

Poor facilities on fishing vessels and limited and inconsistent sanctioning of fishing violations are among what Vietnam must end to remove the IUU yellow card. --VNS Photo

According to the report, fishery and aquaculture commodities represent Vietnam’s fifth largest export, accounting for about 4 per cent of the country’s exports in 2018. In recent years, Vietnam’s seafood exports have reached close to US$8.5 - 9 billion per year, of which aquaculture represents 60 to 65 percent and fishing 35 to 40 percent.
While Vietnam prioritised the development of sustainable fisheries, the local fishing sector has been issued a “yellow card” over IUU fishing, by the European Commission (EC) since 2017.
Nguyen Thị Thu Sac, vice president of VASEP, said since the issuance of the card, local seafood exports to the EU had decreased significantly. From 2017 to 2019, seafood exports to the EU declined at 12 percent or US$183.5 million while total marine product exports decreased by over 10 percent or US$43 million.
Among the products, squid, octopus and cuttlefish plunged the most with a 37 percent drop, while clams, oysters and scallops decreased 11 percent, tuna by nearly 2 percent and crabs by 11 percent.
The association said the downward trend continued in 2020, especially due to the combined impact of the pandemic, IUU yellow card and Brexit: “Vietnam’s seafood exports witnessed a decrease of 5.7 percent, equivalent to a turnover of only US$ 959 million, compared to 2019.”
According to VASEP, Vietnam went from being the second largest seafood import market for the EU to the fourth largest, after the US, Japan and China.
The association said the EU was still a dominant world market and could create a ripple effect in other markets, including important partners for the local seafood market, thus the country could risk losing access to the EU market and being issued a “red card” from the EC for the failure in addressing IUU fishing.
VASEP has worked with partners on a 60-page report covering local seafood production; market regulations on IUU Fishing; overall assessment of trade fluctuations between 2017-2019 to assess the impact of the IUU yellow card; and the estimated short-term and medium-term economic impacts of receiving a red card.
The analysis revealed that fishing was directly affected by the IUU regulations and carding process, while aquaculture was subject to an indirect impact.
The report said if Vietnam was issued a red card from the EU, the immediate and short-term impact on Vietnam’s seafood sector would be a trade ban and the local seafood sector would immediately lose EU markets with an export value of nearly US$480 million.
It was estimated that the Vietnamese fishing sector could lose around US$387 million per year.
At the same time, the indirect impact for aquaculture stems from an increasingly negative reputation, the increasing burden of customs control, and missing opportunities to take advantage of the Vietnam- European Union Free Trade Agreement’s preferential tax levels. In this case, Vietnam’s aquaculture sector could lose around US$93 million.
If the ban lasted for between two and three years, it would mean disruption of the Vietnamese seafood sector with a decline of at least 30 percent in earnings for fishing.

(Latest Update August 12, 2021)