On December 30, 2018, days before the new year, Canada and five other countries, entered a free trade agreement called The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The first six countries to ratify the free trade agreement at the time were: Canada, Australia, Japan, Mexico, New Zealand, and Singapore. Within a couple of weeks (January 14, 2019, to be specific) Vietnam had also ratified the agreement and the CPTPP immediately entered into force in the country. There are currently 11 members in the CPTPP which represents key markets in Asia and Latin America: Canada, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. It has been said that once the agreement gets fully implemented, the 11 participating countries will form a large trading bloc that represents approximately 13.5% of the world’s GDP and over 495 million consumers.
Vietnam and Canada bilateral partnership
Canada and Vietnam have been in a mutually beneficial bilateral relationship for quite some time. According to the Government of Canada, Vietnam has been Canada’s largest trading partner in the ASEAN (Association of Southeast Asian Nations) region since 2015. With an estimated population of 95 million and growing, Vietnam is considered a rapidly emerging economy in the global community. Tourism and Travel, Trade, and Investments, are one of the major exports and imports between the two countries. In fact, the Government of Canada noted that in 2015, almost 100,000 Canadians visited Vietnam. On the other hand, Canada has imported upwards of $78 million in Travel services from Vietnam.
How CPTPP helps Canada-Vietnam trade
Overall the CPTPP will help establish a duty-free trade relationship between Canada and Vietnam through providing a set of rules-based trading environment and enhanced market access. Key exports such as Agricultural goods, Fish and Seafood products, Forest products, and industrial products will be traded duty-free, meaning there are no tariffs placed for these products. The CPTPP will also help bolster several sectoral opportunities in Vietnam, including education, information and communications technology, agriculture and agri-Food, infrastructure, as well as aerospace. Finally, investors from both countries will benefit from the free-trade agreement as the CPTPP enforces more protection against unfair and discriminatory treatment and push for more predictability and higher transparency. – B.P
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