Many products exported to Canada increased dramatically. Photo: ST

Exports to Canada more than doubled after 5 years of CPTPP implementation

Ms. Tran Thu Quynh, Commercial Counselor, Vietnam Trade Office in Canada, said that Canada is currently one of the ten most important trade partners of Vietnam in the world. Vietnam's exports to the area have increased by 26.4% in turnover value compared to 2021, and 5 years after implementing CPTPP, exports to Canada have more than doubled, i.e. from 4.1 billion a year. 2018 up to 9.9 billion in 2022. This is the USD billion market with the highest export growth rate among the group of CPTPP countries.

According to Ms. Tran Thu Quynh, Vietnamese exports to the Canadian market still enjoy tariff incentives under MFN, GSP, and CPTPP. Reality shows that after implementing CPTPP, the export of goods that enjoy zero tax, such as phones, electronics, electrical appliances or basic metals, seafood, vegetables, fruits, or even other products, such as cashew rice, tea, coffee... no matter what incentives are used, they will increase dramatically.

“This shows that CPTPP has a leverage effect to help businesses of the two countries pay more attention to the structure of each other's products and markets, thereby indirectly promoting exports of products without a roadmap of tax reduction. Besides, CPTPP also has a positive impact and spillover effect, promoting further development of supply chains, transportation, and logistics between Vietnam and Canada," said Ms. Tran Thu Quynh.

However, the representative of the Vietnam Trade Office in Canada also assessed that according to recent research of the trade office, the rate of using CPTPP preferential tariffs of goods exported to Canada is still not high, only reaching about 18%; 81% of Vietnam's exports to Canada still use MFN tariff preferences and less than 1% still use GPT tariff preferences (preferential tariffs applied by Canada to developing and underdeveloped countries). GSP.

“Although the rate of using CPTPP preferential tariffs of Vietnamese exports over the past 5 years has increased steadily, about USD 4 billion, or about 60% of our products that should be entitled to zero CPTPP tariffs, are still not. can take advantage of it," said Ms. Tran Thu Quynh.

It can only be exploited well when both sides use it together

Therefore, the representative of the Vietnam Trade Office in Canada said that to exploit the Free Trade Agreement in general and exploit the CPTPP in particular is not only to exploit tax incentives to promote short-term exports but businesses need to target bigger opportunities. It is the connection of production, investment, technology, and brands between countries in free trade agreements to create a higher value chain.

Specifically, for Canada, the deal always encourages Vietnamese businesses to think about the CPTPP market not only for exports but also for the possibility of participating in Government procurement and Government bidding or public-private cooperation abroad than the CPTPP Agreement.

In addition, it is also necessary to create more links between goods exports and service exports. Because the service export segment is still an open segment and has not taken advantage of many opportunities.

Ms. Tran Thu Quynh said that in addition to supporting businesses to promote trade, participate in fairs, exhibitions, or connect orders..., the Vietnam Trade Office in Canada focuses on propagating how to exploit and use CPTPP in Canada to help Canadian businesses better understand business opportunities with businesses in Vietnam and vice versa.

According to the Vietnam Trade Office in Canada, exploiting the CPTPP well can only be done when businesses from both countries understand how to apply and have strategies to find optimal input sources and are able to meet rules of origin to improve competitiveness.

Notably, currently Vietnam, in addition to enjoying CPTPP incentives, also enjoys MFN and GSP incentives. With any incentives, many products still enjoy 0% tax incentives, but Canadian importing businesses still prefer Vietnamese businesses to export under the CPTPP form.

Canadian manufacturers are also interested in taking advantage of the principle of cumulative origin in the strategy of purchasing input materials when producing for export to markets where both Vietnam and Canada have trade agreements.