How to utilize CPTPP to promote exports to the Americas?

Workshop overview

Pave the way to export to America

According to information given by the Ministry of Industry and Trade at the seminar "CPTPP - Opportunities to expand the American market for Vietnamese exports" which took place on the morning of April 27 in Hanoi, two years after the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) came into effect (from January 14, 2019), Vietnam's export turnover to the two countries in the Americas that have approved the CPTPP, Canada and Mexico, has grown strongly.

The rest of the countries have not ratified the CPTPP but have also witnessed very fast growth. The CPTPP has become a driving force to expand the way for Vietnam's merchandise exports to the Americas, which are still very new.

Representatives of Winbridge Business Group (Mexico) said that, after Vietnam and Mexico joined the CPTPP, the governments of the two countries took many initiatives to further promote mutual market access. Mexico offers solutions to support logistics, including legal issues as well as financial accounting advice to reduce costs and time for businesses from both sides.

Do Thi Thu Huong, Vietnam Trade Counselor in Canada, said that the consumption trends of the Canadian market are very diverse. This is a country with the existence of many Asians, so the demand for consumer products in general and of Vietnam in particular is extremely plentiful.

Canada is also pursuing a policy of trade liberalization and trade diversification, so this provides great potential for Vietnamese businesses.

Huong said that, after the CPTPP took effect and especially during the pandemic, Canadian businesses have increased their interest in the Vietnamese market. Joining the CPTPP also makes Canadian businesses more confident about Vietnamese goods when the two countries follow the same principles.

“Canada is promoting its policy of trade diversification, so businesses also need to add different sources to disperse risks. Therefore, Vietnam has emerged as a bright spot in the choices of Canadian businesses when sourcing goods and production locations,” said Huong.

Calculation of distribution channels in the Americas

In addition to favorable conditions, the Vietnamese business community and partners in the CPTPP and the Americas still face many challenges in business cooperation such as: geographical distance, no direct passenger and freight transport; difference in language and lack of market updates.

In addition, businesses are also facing some difficulties in meeting origin standards, quality issues as well as specific requirements that need to be met in the American market.

According to Luu Van Khang, Vietnam Trade Counselor in Mexico, in order to take advantage of the opportunities offered by the CPTPP, in the long run, Vietnamese businesses must calculate to be able to develop distribution channels in the Americas region.

Textile and garment industry has been taking advantage of opportunities from CPTPP to promote exports. Photo: Nguyen Thanh

"In order to promote Vietnam's trade in countries in the Americas, it is necessary to set up trade promotion agencies to contact and promote Vietnamese products to the American market," said Khang.

In order to increase opportunities for Vietnamese enterprises to expand their exports to the Americas, Do Thi Thu Huong noted that Vietnamese enterprises need to be more proactive in grasping incentives within the framework of the CPTPP.

In particular, the import tax incentives can have a direct impact on the price mechanism between the buyer and seller, which should be considered as a basis for negotiations with partners.

Deputy Minister of Industry and Trade Do Thang Hai said that besides exploiting the CPTPP market, businesses can study the possibility of taking advantage of incentives, economic linkages and available infrastructure of the CPTPP member countries to allow Vietnamese goods to penetrate and expand to other markets in the Americas.

“If you make good use of the economic linkages and trade incentives offered by the CPTPP, Vietnamese businesses can find favorable business opportunities, diversify products and export markets in the current global supply chain shifting context,” said the leader of the Ministry of Industry and Trade.