Canada’s CPTPP partner: Vietnam

International Business, Resources, Vietnam/ASEAN sourcing and exports

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is a trading block that represents 495 million people with a combined gross domestic product of CAD $13.5 trillion – a full 13.5% of global GDP. Through the CPTPP, Canada now has preferential access to some of the world’s most dynamic and fast-growing markets, which will strengthen Canadian businesses, grow the economy, and create more well-paying jobs for middle class Canadians.

The CPTPP entered into force for the first six countries to ratify the Agreement – Australia, Canada, Japan, Mexico, New Zealand, and Singapore – on December 30, 2018, and for Vietnam on January 14, 2019.

Why Vietnam matters

  • Vietnam has been Canada’s largest trading partner in the Association of Southeast Asian Nations (ASEAN) region since 2015.
  • It is a rapidly emerging economy, with consistent GDP growth averaging 6%-7% in the past decade. Vietnam is possibly the top-performing Asian economy in 2020, and among the very few countries that managed to record growth last year (+2.9%) despite the coronavirus pandemic.

Canada-Vietnam trade snapshot

  • Canadian merchandise exports: $742 million (2015-2017 average)
  • Canadian merchandise imports: $4.7 billion (2015-2017 average)
  • Canadian services exports (2016): $94 million
  • Canadian services imports (2016): $99 million

Canada’s top merchandise imports from Vietnam (2015-2017 average)

  • Electrical and electronic machinery and equipment: $1.5 billion
  • Textiles and apparel: $979 million
  • Industrial products: $682 million
  • Footwear: $509 million
  • Fish and seafood products (frozen shrimp and prawns, preserved fish): $260 million

Canada’s imports of services from Vietnam (2016)

  • Travel: $78 million
  • Commercial services: $16 million
  • Transportation and government services: $5 million

Canada’s top merchandise exports to Vietnam (2015-2017 average)

  • Agricultural products (wheat, flax, and pork): $297 million
  • Fish and seafood products (frozen lobster, crab, halibut): $119 million
  • Metals and minerals: $79 million
  • Fertilizers: $65 million
  • Industrial machinery: $36 million

Canada’s export of services to Vietnam (2016)

  • Travel: $52 million
  • Commercial services: $22 million
  • Transportation and government services: $20 million

How the CPTPP helps Canada-Vietnam trade and investment

  • The CPTPP provides a rules-based trading environment and enhanced market access for exporters and investors, and  establishes duty-free access for trade in goods between Canada and Vietnam, eliminating tariffs for key Canadian exports, including:
    • agricultural goods:
      • beef (tariffs of up to 31% on fresh, chilled and frozen beef will be eliminated within two years, and tariffs of up to 34% on all other beef products will be eliminated within seven years)
      • pork (tariffs of up to 31% on fresh, chilled, frozen and prepared pork products will be eliminated within nine years)
      • canola (tariffs of 5% on canola seed were eliminated upon entry into force, while tariffs of up to 20% on canola oil will be eliminated within seven years) and
      • ice wine and whisky (tariffs of up to 56% will be eliminated within 10 years).
    • fish and seafood products:
      • lobster (tariffs of up to 34% on prepared lobster will be eliminated within three years)
      • salmon (tariffs of up to 18% on fresh, chilled and frozen salmon were eliminated upon entry into force) and
      • fish fillets (tariffs of up to 18% on frozen fish fillets were eliminated upon entry into force)
    • forest products and value-added wood products:
      • carton boxes and packing containers (tariffs of up to 24% will be eliminated within three years);
      • newsprint (tariffs of up to 25% will be eliminated within three years) and
      • uncoated paper and paperboard (tariffs of up to 27% will be eliminated within three years)
    • industrial products:
      • industrial machinery (tariffs of up to 25% will be eliminated within eight years)
      • chemicals and plastics (tariffs of up to 31% will be eliminated within 10 years)
      • metals and minerals (tariffs of up to 40% will be eliminated within 10 years) and
      • cosmetics (tariffs of up to 30% will be eliminated within four years).
  • On investment, the CPTPP allows Canadian companies to invest with greater confidence in Vietnam, offering them protections from unfair and discriminatory treatment, as well as greater predictability and transparency.
  • Vietnam’s commitments on financial services go beyond what it has offered in previous free trade agreements, creating new opportunities for Canadian financial services providers.
  • Canada’s service industry also benefits from more predictable access and greater transparency in Vietnam, including in key sectors such as:
    • environmental services and
    • business services.
  • New commitments on the temporary entry of business people make it easier for certain categories of Canadian business persons to temporarily work in Vietnam, including investors.
  • The CPTPP also sets a strong standard for intellectual property protection and enforcement, including a range of disciplines new to Vietnam’s domestic regime.
  • Canadian suppliers of goods or services now have access to new government procurement opportunities in Vietnam, supported by open, fair and transparent processes when bidding on government procurement contracts.
  • The CPTPP also provides robust and enforceable provisions on labour and environment.

(credit: Global Affairs Canada)

Contact us for business opportunities with Vietnam as a well-known sourcing alternative to China for quality import products, and/or a high-potential export destination for Canadian products.

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