CPTPP agreement boosts Canada-Vietnam trade

CPTPP agreement boosts Canada-Vietnam trade

Two years after the implementation of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), trade relations between Vietnam and Canada have yielded impressive results.

Effective implementation

Canada, the world’s 10th largest economy based on its GDP, has become a potential Vietnamese trading partner, and the effect of the CPTPP since January 14, 2019 has benefited the two countries’ business community. Canadian Ambassador to Vietnam Deborah Paul said the CPTPP had improved access for trade in goods and services between Canada and Vietnam, reinforced a common set of rules, lowered the cost of trade and made investment more predictable.

Vietnam’s exports to Canada reached nearly US$3.9 billion in 2019, an increase of 28 percent compared to the previous year. This figure increased by 13 percent in 2020 to reach nearly US$4.4 billion despite the adverse effects of the Covid-19 pandemic on global trade.

Vu Tien Loc, chairman of the Vietnam Chamber of Commerce and Industry (VCCI), said trade relations between Vietnam and Canada are one of the most successful results of the CPTPP thanks to market development efforts by businesses in both countries.

Vast room for cooperation

Vietnamese businesses have made good use of the Canadian market for exports of mobile phones, footwear, furniture, apparel, seafood and fruit, making Vietnam one of the top five exporters to Canada.

However, Vietnam’s exports to Canada have only accounted for 1.16 percent of Canada’s total imports, leaving vast room for export growth in the future, said Nguyen Thi Thu Trang, director of VCCI’s WTO and Integration Center. Canadian consumers have high demand for leading Vietnamese products, such as phones, furniture, apparel, footwear, tea, coffee and tropical fruit. Vietnamese goods have already won consumer trust in discerning markets such as the EU, the US and Japan, and can easily meet the high requirements of the Canadian market.

Canada and Vietnam are members of the CPTPP. Canada has abolished 94 percent of tariff lines for Vietnamese exports, while Vietnam has removed nearly 66 percent of tariff lines for imports from Canada. This provides Vietnam with an advantage over competitors such as China and ASEAN countries.

Bui Tuan Hoan from the Ministry of Industry and Trade’s European-American Market Department said Vietnamese businesses need to receive updates on Canada’s regulations and laws and ensure strict adherence to them, and conduct research to learn about consumer tastes and needs. Canadian consumers are willing to try new products if the prices are competitive.

In addition, Vietnamese exporters must learn how to approach distribution channels in Canada, especially e-commerce channels that are increasingly popular and become the mainstream shopping trend of Canadian consumers. Vietnamese businesses also need to pay attention to improving product quality, design and packaging.

VietNam Economic News