Vietnam-Canada: Toward Sustainable Trade Post-COVID-19

“The CPTPP has improved accessibility for trade in goods and services between Canada and Vietnam, strengthening a set of common rules, reducing trade costs and making investment more predictable,” said Ms. Deborah Paul, Canadian Ambassador to Vietnam.

At the workshop on promoting the implementation of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and developing bilateral trade relations between Canada and Vietnam, coordinated by the Embassy of Canada in Hanoi and VCCI, Ms. Deborah Paul said that CPTPP has helped improve the competitive advantage of products in the two countries' markets. Thanks to the CPTPP, the bilateral merchandise trade between Canada and Vietnam reached a record 8.9 billion CAD in 2020, up 12% year-on-year and 37% after two years the agreement took effect, despite the negative impact of the COVID-19 pandemic on global trade.

The CPTPP came into effect for both Vietnam and Canada in January 2019. CPTPP provides a rules-based trading environment and enhances market access for exporters and investors and establishes duty-free access to trade in goods between Canada and Vietnam, eliminating tariffs on major Canadian exports.

In addition, CPTPP helps improve market access in areas such as financial services, information and communication technology, and infrastructure. The CPTPP also allows Canadian and Vietnamese companies to invest in each other's markets more confidently while enhancing predictability and transparency.

Canada's services industry also benefits from more predictable and transparent accessibility in areas such as business and environmental services. The agreement makes short-term entry easier for entrepreneurs and helps improve the transparency of the business environment, enables two-way direct investment and helps companies establish a more favorable commercial presence.

Dr. Vu Tien Loc, President of VCCI, said that the rate of taking advantage of preferential tariff for Vietnam’s export goods to Canada is modest, but still superior to the rest of the CPTPP partners. In 2019, while the rate of Vietnamese exports taking advantage of the general CPTPP preferences was only 1.67%, this rate with Canada reached 8%.

According to VCCI President Vu Tien Loc, CPTPP has contributed a great part in the business cooperation process between Vietnam and Canada, especially import and export activities with preferential tariff opportunities that the two sides offer, bringing significant improvements in non-tariff barriers towards greater transparency and convenience for the flow of goods between the two sides.

According to the Embassy of Canada in Vietnam, Vietnam is Canada's largest trading partner in the Association of Southeast Asian Nations (ASEAN) since 2015. Vietnam was the second largest market in ASEAN in 2020 for agricultural and marine products exported from Canada. Canada's top agricultural and marine exports to Vietnam include grains, oilseeds, fish and crustaceans, fruits, beef, pork and dairy products. The CPTPP establishes duty-free access to merchandise trade between Canada and Vietnam and makes high-quality Canadian products more affordable to Vietnamese consumers.

The total value of Vietnamese exports to Canada will see significant increases for mobile phones, footwear, furniture and apparel. These benefits will continue to grow as the CPTPP expands after the ratification and accession of new members.

At the seminar, the handbook on CPTPP compiled by VCCI with the support of the Canadian Embassy was also introduced to Vietnamese and Canadian businesses. The handbook provides key information on the important results and benefits of the Agreement, and provides useful advice to help businesses take advantage of the Agreement to expand trade and investment.

Source: Vietnam Business Forum