Vietnam, Canada see major opportunities to expand trade
Vietnam, Canada see major opportunities to expand trade
Vietnam and Canada have agreed to promote bilateral trade while encouraging businesses to make the most of opportunities provided by the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
A major trading partner
Canada is Vietnam’s second largest trading partner in the Americas, whereas Vietnam has been Canada’s top trading partner in ASEAN since 2015.
The two countries upgraded bilateral relations in a wide range of fields to a comprehensive partnership in 2017 and trade has increased since they signed the 2018 CPTPP under which Canada has eliminated 94 percent of tax lines for Vietnamese imports, and Vietnam has eliminated approximately 66 percent of tax lines for Canadian imports. Bilateral trade reached a record high of US$8.9 billion in 2020, up 12 percent compared with 2019 despite the impact of Covid-19.
Trade in goods between Vietnam and Canada has grown strongly over the past two years since the CPTPP implementation in Vietnam
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General Department of Vietnam Customs data show that Vietnam exported more than US$1.53 billion worth of goods to Canada in May 2021, a year-on-year increase of 29.9 percent. Products significantly contributing to this growth include machinery, equipment, instruments and spare parts (up 62.2 percent); timber and wood products (up 58.2 percent). Canadian farm products such as cereals, oilseeds, fish, fruit, beef, pork and milk products have accessed the Vietnamese market.
According to Canadian Ambassador to Vietnam Deborah Paul, the CPTPP has helped facilitate trade and investment between the two countries, paving the way for their access to duty-free bilateral trade, which makes high-quality Canadian products affordable for Vietnamese consumers.
However, trade between Vietnam and Canada accounts for a mere 0.7 percent of Canada’s total foreign trade value. Given the complementary structure of goods traded between the two countries and existing favorable conditions, the room for bilateral trade development remains large.
Comprehensive development cooperation
Deputy Minister of Industry and Trade Do Thang Hai believes that as a signatory to major free trade agreements (FTAs) such as the CPTPP, the EU-Vietnam Free Trade Agreement (EVFTA), and the Regional Comprehensive Economic Partnership (RCEP), Vietnam can serve as an effective business bridge in regional and global trade.
According to Geoff Donald, Advocacy Chair of the Canada-ASEAN Business Council (CABC), Vietnam will remain a major partner of Canada in the next decades. With a population expected to reach 120 million by 2050 and gross domestic product (GDP) forecast to grow strongly in 2021, Vietnam is a potential market for Canadian companies, especially those operating in key industries such as food processing.
Geoff Donald said that to make the most of opportunities to promote comprehensive growth, both governments need to increase support for small and medium enterprises (SMEs) in order to maximize their benefits from trade deals like the CPTPP.
Canada is developing the Indo-Pacific Strategy. In this context, CABC is appealing to public policy makers and business leaders to prioritize Canada-Vietnam relations by increasing support for SMEs seeking to take advantage of the CPTPP; expand bilateral cooperation in agriculture, aviation, infrastructure, financial services and the digital economy; and negotiate an FTA between Canada and ASEAN to create more opportunities for Canada in Southeast Asia.
Looking towards the 50th anniversary of bilateral diplomatic relations (1973-2023), Vietnam and Canada agreed to expand cooperation in various fields, including education, finance, digital economy, creative innovation, sustainable development, clean energy, climate change adaptation, and cooperation between localities. The two countries also agreed to work together in Covid-19 prevention and vaccination.
