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The statement made in the summary
The Vietnamese trade ministry official asserted in the summary that the US could not deliberate over the shrimp trade row and that his government could not help shrimp farmers to renew trade links with the US (Fritsch, 2004). The assertion was not correct. Shrimp farmers in Vietnam were incurring huge losses as a result of unfair trade tariff imposed by the US government. The government was under obligation to assist farmers in selling their shrimp products in the US.
It was incorrect for the ministry official to contend that shrimp farmers in Vietnam could have to fend for themselves. The official could have relied on the shrimp trade agreement signed between the two countries.
If it were found that the US imposed the tariff unfairly, then Vietnam could raise the issue with the relevant authorities or international bodies to find amicable solutions. This was a matter with great importance in international economics (Carbaugh, 2013). Also, many shrimp farmers were expressing fears that they could continue losing if the US continued to execute the tariff (Fritsch, 2004).
Dumping
The dumping claim offered by the US authorities was not valid. In international trade, dumping occurs when business organizations export products to other nations and sell them at prices lower than the cost incurred in producing them. Also, dumping of products is experienced if exporters sell products to foreign consumers at lower prices than those that domestic consumers are charged (Carbaugh, 2013).
The claim was invalid because, after the tariff was imposed on shrimps from Vietnam, farmers started to complain that they were making losses. If they had been selling their produce at prices lower than the production cost, they could not have been in the business for a long time. Many farmers took loans from financial institutions to engage in farming. Assuming that they had been exporting shrimps to the US market at unreasonably low prices, then the farmers could not have been repaying their loans.
A country may price discriminate and dump to another country if it agrees to supply some products in large quantities (Carbaugh, 2013). Under such a condition, a country would charge lower prices of the products. However, it should be noted that the World Trade Organization (WTO) supports dumping unless sufficient evidence is produced to prove price discrimination (Carbaugh, 2013).
The US versus Vietnamese shrimpers
Fritsch (2004) argues that Vietnamese shrimpers were more efficient than shrimpers in the US. They were doing better in farming because they took advantage of the natural climatic and natural features and cheap labor. Also, there were large tracts of land along the coast that supported shrimp farming. Also, shrimpers in Vietnam dug ponds to rear shrimps, a process that allowed large-scale production.
On the other hand, the US shrimpers obtained their small number of small creatures from the ocean, a process that was tedious and less efficient. It was also notable that environmental issues and escalating prices of coastal land in the US greatly hindered shrimp farmers from being efficient in producing shrimps (Fritsch, 2004).
For the US shrimpers to become efficient, they could have shifted to the use of ponds to rear shrimps. Also, the government could assist shrimpers by supporting legislation that could lower property prices along the coastal strip that was characterized by excellent climatic conditions for rearing the small creatures.
References
Carbaugh, R.J. (2013). International economics (14th ed.). Mason, OH: South-Western Cengage Learning.
Fritsch, P. (2004). As Shrimp Industry Thrives in Vietnam, Trade Fight Looms. Wall Street journal, 2(1), 1-5.
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