Taking advantage of CPTPP in exporting wooden furniture to Canada

Vietnam currently ranks 13th among countries exporting wooden furniture and interior decoration to Canada. The prospect of exporting this item to Canada is still very positive, and has a lot of potential, in which the Comprehensive and Progressive Agreement for Trans- Pacific Partnership (CPTPP) is a big driving force.

With the elimination of import taxes for 95% of tariff lines as soon as the Comprehensive and Progressive Agreement for Trans- Pacific Partnership (CPTPP) comes into effect, Canada is considered a potential market for many key export products of Vietnam, including wood and wood products.

Vietnam currently ranks 13th among countries exporting wooden furniture and interior decoration to Canada - Photo: Internet

However, in the first two months of 2023, the export turnover of wood and wood products to the Canadian market decreased by 46.8% compared to the same period in 2022.

Specifically, according to data from the General Department of Customs, it is estimated that the export turnover of wood and wood products to the Canadian market in February 2023 reached 10.6 million USD, down 24% compared to February 2022. In general, in the first two months of 2023, the export turnover of wood and wood products to the Canadian market is estimated at 21.6 million USD, down 46.8% compared to the same period in 2022.

In January 2023, wooden furniture exports to the Canadian market decreased sharply. This is the main export item in the structure of wood and wood products exported to the Canadian market.

Most wooden furniture items decreased sharply in January 2023, with wooden frame chairs and chair parts leading in export turnover at 2.8 million USD, down 27.2% compared to December 2022, down 62.8% compared to January 2022; followed by living room and dining room furniture, reaching 2.6 million, down 39% compared to December 2022, down 73.4% compared to January 2022...

Notably, in addition to wooden furniture exported to the Canadian market, in January 2023, the export turnover of wood, boards and flooring, and wooden doors exported to the Canadian market grew positively.

However, the export turnover of these items only accounts for a low proportion, so it cannot compensate for the sharp decrease from the main export item, wooden furniture.

As the 6th largest wooden furniture import market in the world , Canada always has a high demand for importing this item. According to statistics from Statistics Canada, the value of wooden furniture imports in this country in 2022 reached 2.7 billion USD, an increase of 8% compared to 2021.

Of which, Canada increased imports of wooden furniture from the US and EU, but decreased imports from the Chinese and Vietnamese markets.

Vietnam is the 4th largest wooden furniture supplier to Canada, however, the proportion of imports from Vietnam only accounts for 15.3% of the total import value in 2022, reaching 411.9 million USD, down 1.1% compared to 2021.

Compared to import demand, import value from Vietnam is still low, so there are still many opportunities for Vietnamese enterprises exporting this item to expand market share in Canada in the coming time.

After five years of implementation, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) has helped Canadian businesses learn more about and pay more attention to Vietnam's manufacturing capacity.

Notably, in the purchasing strategy of Canadian partners, Vietnam is emerging thanks to its stability, predictability and reasonable prices.

There are many favorable opportunities for developing Vietnam-Canada trade. At the end of 2022, Canada officially announced its Indo-Pacific strategy, which positions ASEAN as the center of the region and wishes to sign a Canada-ASEAN free trade agreement, while upgrading relations with ASEAN to a strategic partnership level.

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) after five years of implementation has helped Canadian businesses know and pay more attention to Vietnam's production capacity - Photo: Internet

In this strategy, Vietnam has some clear advantages. Accordingly, Vietnam is considered by most Canadian businesses as a reasonable gateway to the region thanks to its advantages in terms of geographical location, infrastructure, labor, and political and social stability.

In addition, both Vietnam and Canada are members of CPTPP, APEC, and the two countries have established a Joint Economic Committee mechanism to periodically discuss the prospects for economic and trade cooperation. Recently, the two countries have put into operation a large-capacity container ship route running directly from Hai Phong to Vancouver, reducing the shipping time to 17 days, significantly reducing shipping costs for Vietnamese export enterprises.

Although there are many advantages to boost exports to the Canadian market. However, in the context of the global economy still facing many difficulties in 2023, Canada is still subject to many negative impacts from the world market and consumption continues to be tightened. Canada's trade policy creates many challenges for businesses exporting to this market.

Accordingly, to support businesses of the two countries to strengthen connections and trade exchanges, in 2023, the Vietnam Trade Office in Canada will focus on implementing a number of key trade promotion activities such as: Continuing to support businesses to exploit the advantages brought by CPTPP, helping to increase exports of strong products to the market by organizing delegations to return home to purchase goods; promoting online trade; seminars to disseminate and exploit the advantages of free trade agreements of which both sides are members. Coordinating with relevant units to bring a delegation of Canadian businesses to attend the Ho Chi Minh City Furniture and Wood Export Fair - HawaExpo 2023 and purchase goods...

Tung Anh