By: Amanda Nichols, Ocean and Coastal Law Fellow, National Sea Grant Law Center

On March 23, Congress signed into law its $1.3 trillion omnibus spending bill. While news stories circulated concerning the more notable portions of the over 2,000-page document, information about the bill’s more obscure provisions is only now starting to emerge. Less than one paragraph of text could put a thorn in America’s side when it comes to the international aquaculture trade.

Faced with a collapsing domestic catfish aquaculture industry (due in part to increasing competition with imported catfish farmed abroad), the United States decided in 2013 to transfer authority over the domestic and import inspection program for catfish from the U.S. Food and Drug Administration (FDA) to the U.S. Department of Agriculture’s (USDA) Food Safety and Inspection Service (FSIS). This move allowed FSIS to ban imported catfish from foreign countries if that country were not determined to have fish inspection standards “equivalent” to those in the United States. Such “equivalency determinations” take into account government inspection offices, slaughter and processing establishments, cold storage facilities, and laboratories, and may also include farms. FSIS makes its determinations based largely on self-reported information from foreign countries that demonstrate equivalence. Those countries meeting equivalency standards are placed on a list of FSIS-approved importers, while those not meeting the threshold are banned from importing catfish until they can do so. As one might expect, equivalency determinations can often take a long time, sometimes even years, to complete.

Timing considerations with respect to equivalency determinations have created a major controversy between the United States and foreign catfish aquaculturists in the wake of this year’s omnibus bill passage. The bill contained text mandating that no later than 180 days after the bill’s enactment, the FSIS must issue equivalence determinations for all countries wishing to continue exporting catfish to the United States. Countries not up to par would be banned from exporting catfish into the United States until found to be equivalent. This directive has thus far eliminated eleven out of fourteen countries who initially expressed interest in continuing to export catfish to the United States. Of the three that remain (Vietnam, China, and Thailand), Vietnam has recently retaliated, alleging that the newly imposed timeline amounts to an unfair trade practice—imposed merely to help domestic catfish farmers fare better against their foreign competitors. While the United States maintains that the new requirements were implemented to preserve the health and safety of its citizens, critics point to weaknesses in its argument, such as the domestic catfish recall issued earlier this year where fish may have been contaminated with one of the very substances the United States fears Vietnam may be using—leucomalachite green.

On February 22, Vietnam filed a complaint with the World Trade Organization (WTO) that alleges the United States’ recent changes to its catfish inspection regime are inconsistent with its obligations under WTO rules and will harm Vietnam. Vietnam’s complaint requests a consultation with the United States—a move that formally initiates a dispute in the WTO. On March 9, China also expressed its desire to be included in Vietnam’s consultation with the United States. Consultations are meant to give parties an opportunity to discuss a matter and find a satisfactory solution without proceeding further with litigation. After sixty days, if consultations have failed to resolve the dispute, the complainant may request adjudication by a panel. If Vietnam and the United States reach an agreement, it could mean that the newly imposed strictures of the FSIS’s inspection program for catfish are somewhat lessened. However, if this process does not produce a resolution within the given time period, Vietnam could move forward with WTO panel adjudication. This could also mean that Vietnam takes retaliatory trade steps against the United States such as the imposition of tariffs, in much the same way China has recently. Only time will tell what action, if any, will be taken by both parties, and who will stand to benefit most as a result.