CPTPP partner: Vietnam
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. For the remaining signatories (Brunei, Chile, Malaysia, and Peru), the CPTPP will enter into force 60 days after that country ratifies the Agreement.
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 a forecasted GDP growth of over 6.3% in 2018.
Canada-Vietnam trade snapshot
Top Canadian Exports to Vietnam (2015-2017 average, $CAD)
Canada's Top Exports to Vietnam (2015-2017 average, $CAD)
- Total value of exports to Vietnam: $742,000,000
- Agricultural products (wheat, flax, and pork): $297,000,000
- Fish and seafood products (frozen lobster, crab, halibut): $119,000,000
- Metals and minerals: $79,000,000
- Fertilizers: $65,000,000
- Industrial machinery: $36,000,000
Key facts and figures
- 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
- 99,100 Canadians visited Vietnam in 2015.
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.
Sectoral opportunities in Vietnam
- Opportunities exist in both education recruitment and partnership.
- Vietnam is one of the biggest education services importers in the world with about 130,000 Vietnamese students studying abroad, and $3 billion per year spent on overseas study.
- Vietnam ranks first in Southeast Asia and fifth globally as a source country for international students in Canada, with around 14,095 Vietnamese students studying in Canada in 2017.
- Information and communications technology (ICT):
- ICT contributes 7% to Vietnam's GDP, topping US$65 billion in 2016.
- In 2017, the 4G network was rolled out across Vietnam, which has laid the groundwork for the development of the internet of things, big data and analytics, finance technology, applications for health care, clean technology, and transportation.
- Agriculture and agri-food:
- The sector accounted for approximately half of Canada’s exports to Vietnam in 2016.
- Vietnam is ranked the second export destination for Canada in this sector (after Indonesia).
- Opportunities also exist for Canadian animal genetics, patented feed solutions and other agri-business inputs and technology for the food production industry.
- Improvements in mass transit and road infrastructure are creating opportunities in planning and design, project management, advanced engineering and intelligent control systems.
- Smart city planning is also an emerging industry.
- Clean technology:
- As the government develops an action plan to address climate change, opportunities will emerge in renewable energy (solar and wind), waste management (including waste-to-energy) and waste water treatment.
- The expansion of air traffic, as well as the number of air carriers, fleet and aircraft types, is increasing demands for maintenance, repair and overhaul, and air traffic control and pilot training.
- The International Air Transport Association forecasts that Vietnam will be one of the world’s 10 fastest-growing aviation markets in the next two decades.