Vietnam Catfish Case

Topics: Mekong Delta, International trade, Vietnam Pages: 4 (1200 words) Published: April 4, 2009
Vietnam has a comparative advantage over the U.S in producing catfish. This fact is supported in the case by the following three points. First, U.S. catfish farmers have a higher loss ratio than Vietnamese catfish farmers because ambitious birds frequently pluck catfish from ponds, one study showed that cormorants ate more than five million dollars worth of catfish, because of the fast-flowing waters of the Mekong River, Vietnamese farmers need not fear these losses. Second, Vietnam is setup to better produce catfish. Catfish grown in Vietnam benefit from aerated and free-flowing waters of the Mekong River as opposed to catfish ponds in the U.S.; because of this, Catfish from Vietnam experience shorter growing times, no need for monitoring oxygen level, and can be harvested year-round. Third, Vietnam does not have to deal with the problem of pond algae. Pond algae gives catfish a muddy smell and distorts the flavor and delay’s pond harvesting in the U.S., to manage this algae problem U.S. catfish farmer have to use pesticides to protect the flavor. From these three points Vietnam has a clear comparative advantage over the U.S. in the production of catfish. Vietnam should continue to produce catfish because in comparison to the U.S., Vietnam can more efficiently and effectively produce catfish. The U.S. can also gain from Vietnam producing catfish, because Vietnam is able to more efficiently produce catfish, the U.S. can focus specializing on another good. This will not only make output of both products higher, the two countries will now benefit from trading with one another. “Potential world production is greater with unrestricted free trade than it is with restricted trade” ~ David Ricardo.

Vietnamese government involved fairly in promoting catfish business. For over the past 50 years, catfish was an important economic resource of the Mekong Delta, where South Vietnam occupied most of it. Although with the “socialist transformation deeply unsettled...
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