Vietnam – Canada impressive growth after 2 years of implementing CPTPP Agreement

As members of the Comprehensive and Progressive Agreement for Trans- Pacific Partnership (CPTPP), Vietnam and Canada are facing a unique opportunity to enhance bilateral trade and investment relations by taking advantage of the first new-generation free trade agreement between the two sides.

As the 10th largest economy in terms of GDP, 2nd in terms of exports and 13th in terms of imports in the world in 2019, Canada has become a very potential trading partner of Vietnam in the American market. From the perspective of trade in goods, Vietnam has great potential in many agricultural, forestry, fishery and light industrial products. Meanwhile, Canada is a developed industrial country rich in resources, with strengths in producing and exporting many raw materials and heavy industrial products.

At the workshop "Vietnam - Canada Trade Relations: Review of 2 years of CPTPP implementation - towards a sustainable future after Covid-19" held in 2021, a representative of the Canadian Embassy in Vietnam said: CPTPP makes Canada the only G7 country to sign this agreement, helping to further promote trade in goods between Vietnam and Canada. CPTPP coming into effect in Vietnam is a highlight in the cooperative relationship between the two sides.

After 2 years of implementing CPTPP, bilateral trade between Vietnam and Canada reached 8.9 billion Canadian dollars. Photo: Internet

In fact, Vietnam's exports to Canada increased continuously during the period 2010 - 2020. In 2019 - the first year of implementing CPTPP, export turnover to this market reached nearly 3.9 billion USD, an increase of 28% compared to 2018 (this growth rate is higher than the average of 18% in the period 2010 - 2018 but still lower than the 32-35% in 2014 and 2014).

A representative of the Vietnam Chamber of Commerce and Industry (VCCI) said that in 2020, despite being heavily affected by the Covid-19 pandemic, Vietnam's exports to Canada still grew impressively by 13% - twice as high as Vietnam's overall export growth in 2020 of 6.5% and reached nearly 4.4 billion USD. The rate of CPTPP tariff incentives utilization for export goods that Vietnam recorded with Canada, although modest, was still superior to the remaining partners in the CPTPP. In 2019, while the overall CPTPP preferential utilization rate of Vietnam's exports was only 1.67%, this rate with Canada was still 8%.

The opportunity is very attractive, however, Vietnamese enterprises have not yet fully exploited it to export and import with CPTPP countries. A survey by VCCI shows that many enterprises have not yet taken advantage of the tariff incentives in CPTPP for exporting and importing goods with Canada.

According to VCCI, to effectively import goods from Canada and take advantage of opportunities from CPTPP, importing enterprises need to fully research the rules of origin in CPTPP; regularly update regulations and procedures for importing goods from Canada to enjoy tariff incentives; increase promotion, focus on product quality and reputation; seek information and support from the government and industry associations...

Textiles and garments are an industry that has seen significant improvements in exports to Canada after the CPTPP came into effect. Photo: Internet.

In addition, to increase the export of Vietnamese goods to Canada, businesses need to carefully study Canada's tariff commitments in the Agreement, as well as the rules and procedures for certifying origin to enjoy tax incentives, as well as other related issues such as trade facilitation, trade defense, etc.

The relative complementarity in the product structure of Vietnam and Canada promises to create many opportunities and added value for bilateral trade. In that context, with strong tariff reduction commitments, customs facilitation rules, and restrictions on non-tariff barriers, the CPTPP is expected to be a highway to promote trade between Vietnam and Canada to develop strongly in the coming time.

Bich Huong