Canada and Vietnam in the CPTPP Agreement: Insights from Dialogue with Ho Chi Minh City Customs

PLF Participates in “CPTPP in Action – Dialogue with Ho Chi Minh City Customs Department”

On March 27, Ms. Sica Le, Junior Associate at PLF Law Firm, participated in an forum themed “CPTPP in Action – Dialogue with Ho Chi Minh City Customs Department.

Within the framework of operations in Vietnam from March 26 to 29, 2024, Canadian Minister of Export Promotion, International Trade and Economic Development Mary Ng led a trade mission to Vietnam. The delegation comprised more than 250 people, including representatives from 200 leading Canadian businesses. Numerous conferences and seminars were conducted as part of the program to facilitate Canadian businesses’ understanding of the market and investment cooperation opportunities, as well as to enhance supply chain connections in Vietnam and the broader region.

Focus of the Forum

The forum served as a platform for Canadian exporters and Vietnamese importers to engage directly with Vietnamese customs officials.
Discussions centered on clarifying CPTPP regulations to facilitate Canadian exports under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
The dialogue covered five main topics:

• Country-of-origin issues
• Tariff classifications and refunds
• Imports of product samples
• Advance rulings
• Custom clearance.

CPTPP’s Impact on Vietnam-Canada Trade Relations

This year, the event commemorates the 5th anniversary of CPTPP implementation in Vietnam, which took effect on January 14, 2019. According to Mary Ng, since the launch of CPTPP, bilateral trade between Canada and Vietnam has surged by 170 percent. She stated, “ASEAN is Canada’s largest trading partner, and we want to replicate the successful model of Canada and Vietnam in the region. Vietnam’s economy is fast-growing and large-scale, serving as an important gateway for Canada to move deeper into ASEAN.”

Opportunities and Challenges Under CPTPP

To some extent, the CPTPP has opened up numerous opportunities for enterprises in Vietnam and Canada. Notably, Tran Thu Quynh, Vietnamese Trade Counsellor in Canada, observed that Vietnamese exporters have yet to fully realize the potential benefits offered by the trade pact’s tax provisions.

In particular, Vietnam exported over USD 9 billion worth of products to Canada, but only 18% of these used certificates of origin (C/O) under the CPTPP to enjoy preferential tariffs. Conversely, more than 80% used on C/Os for most-favored nation (MFN) tariffs and general preferential tariffs (GPT), which will become invalid in December 2024. Vietnamese enterprises should prioritize leveraging the trade agreement to enhance product competitiveness. Strict adherence to origin rules is crucial for boosting export revenue in the North American market.

Commitment to Facilitating Trade

Nguyen Huu Nghiep, Deputy Director of the HCM City Customs Department, emphasized the department’s commitment to facilitating trade for the business community. He also expressed optimism about discussions for increased engagement between the department and the Canada Border Services Agency in the future.
These efforts aim to address businesses’ inquiries related to import and export procedures. Importantly, building trust among businesses remains crucial, especially in the face of global trade uncertainties.

Vietnam is currently the largest trading partner of Canada in ASEAN. In 2023, Viet Nam’s trade value with Canada hit nearly CAD14 billion (or US$10.37 billion).

Beyond trade, Vietnam and Canada have established a comprehensive partnership covering diverse areas such as economy, trade, investment, defense, development cooperation, education, and healthcare. Both nations also prioritize energy sector development, aligning with COP26 commitments.

The Q&A session provided a platform for businesses and customs authorities, and border agencies, Attendees had the opportunity to seek clarification on import and export operations between Vietnam and Canada. Moreover, topics included implementing the CPTPP agreement on goods origin, inspecting the quality of imported and exported goods, and the import-export tariff schedule under CPTPP was also discussed.

“To date, Vietnam has trade relations with 224 partners and cooperative relations with more than 300 international organizations; signed more than 90 bilateral trade agreements, nearly 60 investment promotion and protection agreements; negotiated, signed and implemented 18 bilateral and multilateral FTAs, with most major economies in the world;

Of which 16 FTAs have taken effect with more than 60 partners, covering all continents, making Vietnam one of the leading countries in the region in participating in bilateral and multilateral economic cooperation frameworks.”

PLF Law Firm stands out for providing top-tier legal, financial, and accounting solutions for foreign investors and business owners, helping them build a solid business foundation and minimize legal risks. Contact us today for Investment Consulting guidance via email at inquiry@plf.vn or +84913 902 906 or Zalo | Viber | WhatsApp to receive a free 30-minute consultation.

Reference:

https://www.canchamvietnam.org/post/cptpp-in-action-dialogue-with-ho-chi-minh-city-customs-department 
https://vir.com.vn/vietnam-and-canada-share-customs-procedures-109958.html 
https://itpc.hochiminhcity.gov.vn/web/en/-/vietnam-advised-to-fully-tap-cptpp-to-boost-exports-to-canada 
https://vietnamlawmagazine.vn/vietnam-advised-to-fully-tap-cptpp-to-boost-exports-to-canada-71522.html
https://vietnamnews.vn/politics-laws/1638068/viet-nam-canada-vow-to-boost-comprehensive-partnership.html