Canada - a potential market for exports

	Two export products to Canada rose dramatically under CPTPP
	Giving wings to Vietnamese brands in major markets
	Vietnam, Canada cooperate in IP management

The Canadian market has a lot of potential for export businesses. Photo: N. Hien

Foreign enterprises still dominate

According to the General Department of Customs, Vietnam's export turnover growth to Canada reached over 65% from 3.9 billion USD in 2019 to 6.3 billion USD in 2022. Products achieving impressive export growth to Canada including: iron and steel increased by 79%; machinery and electrical equipment increased by 36%; garments and accessories increased by 19%; footwear increased by 11%; Furniture and wooden furniture increased by 19%... Currently, Vietnam has become Canada's seventh largest import partner and Canada is also a country with a very large trade surplus, up to over 9 billion USD.

Mr. Dinh Sy Minh Lang, Department of European and American Markets (Ministry of Industry and Trade), said that up to 60% of Vietnam's exported products to Canada belong to the group of FDI enterprises while the domestic sector mainly exports products processed or raw goods that do not have their brand.

Analyzing the reason, Mr. Lang pointed out that it is first of all due to transportation and logistics capacity. “Such as rice, vegetables and fruits, Vietnam has difficulty competing with similar products from the US and South American countries due to geographical and transportation issues. Furthermore, many South American countries have invested heavily in developing tropical fruit trees similar to Vietnam such as jackfruit, mango, rambutan, lychee, dragon fruit... and have boosted exports to Canada in recent months," Mr. Lang stated. In addition, Vietnam's strong goods are less competitive in price compared to similar products from China, India, or Chile... This happened to the seafood group in 2023, causing export turnover to decline. In addition, Canada has signed more bilateral FTAs ​​and promoted policies towards the South American economic bloc with high standards on sustainable development, environmental protection, and emission reduction...

Mr. Nguyen Trung Hieu, Lawyer, General Director of Bach Luat LLC, said that according to a survey by the Vietnam Trade Office in Canada, the rate of using CPTPP preferential tariffs of Vietnamese exports to Canada is still not high, only reached about 18%; 81% of our exports to the area still use MFN tariff preferences while less than 1% still use GPT and GSP tariff preferences. The rate of using CPTPP preferential tariffs of Vietnamese exports over the past 5 years has increased steadily (about 4 billion USD), meaning that about 60% of our products enjoy zero CPTPP tax but have not yet been taken advantage of while The tax difference between MFN and CPTPP or between GSP and CPTPP is quite large.

According to Mr. Nguyen Trung Hieu, currently, the biggest barrier for Vietnamese exporters entering the Canadian market is the rules of origin and the risks of anti-subsidy and anti-dumping taxes. Accordingly, several sectors and products exported from Vietnam to Canada are at risk of being subject to anti-dumping duties or considering extending anti-dumping duties such as solar panels, anti-corrosion steel, and chairs upholstery... Therefore, to access the Canadian market, it is necessary to ensure rules of origin, meet the criteria of food hygiene and safety, quality, labor and sustainability issues.

Relying on e-commerce as a springboard for export

To support businesses in promoting exports to the Canadian market, representatives of the Ministry of Industry and Trade informed that in Canada more than half of consumers aged 24 to 65, 82% of the population lives in urban areas; Especially, 20% of the population are immigrants, 1/2 are Asian... "Canadians have many and diverse shopping habits, and online shopping methods are increasing. Canadian consumers are not too conservative, 50% are willing to try new products from an unfamiliar brand," Mr. Lang said.

To promote exports to the Canadian market, according to Mr. Lang, businesses can process production and produce according to the brands of supermarket chains and the world's major importers and distributors market in a sustainable way and with stable orders. Many Vietnam products have a stable presence in supermarket systems in Canada thanks to accepting Canadian manufacturing and processing, such as coconut water products, fried shrimp, or fish sauce... Experts also recommend that Vietnamese enterprises should promote the export of new, unique, highly creative products, choosing to segment clothing, shoes, and handbags... due to the rapidly changing nature of the market, consumer tastes still have a lot of potential and high-profit margin. At the same time, businesses should rely on e-commerce as a springboard to export to this market and take measures to respond to increasing trade defense measures.

Ms. Bui Thi Hoan, Director of My Duc Embroidery and Garment Joint Stock Company, said that in the context of garment export facing many difficulties, Canada is a market with great potential. From the information she has gathered, Ms. Hoan hopes to have the opportunity to export her company's goods to this market shortly.

According to Ms. Tran Thu Quynh, Commercial Counselor - Vietnam Trade Office in Canada, exploiting CPTPP well can only be done when businesses of both countries understand how to apply and have a common strategy for sourcing inputs. optimal and capable of meeting rules of origin to enhance competitiveness. Currently, in addition to enjoying CPTPP incentives, Vietnam also enjoys incentives under MFN and GSP forms.

Even following these incentives, many of our products still enjoy 0% tax incentives, but Canadian importers still prefer Vietnamese enterprises to export under the CPTPP form. Canadian manufacturers themselves are also interested in taking advantage of the principle of cumulative origin in the strategy of purchasing input materials for production to export to markets where both Vietnam and Canada have FTAs.

This is also an issue that the Vietnam Trade Office always tries to share with Vietnamese export businesses as well as local businesses to increase utilization and exploit the CPTPP Agreement.