Slide opportunities and challenges of exporting vietnams wood and wood products to canada in the context of cptpp

1. Overview of the Comprehensive and Progressive Agreement for TransPacific Partnership (CPTPP) 2. The situation of Vietnams wood and wood products export activities in the context of CPTPP 3. Opportunities and Challenges of CPTPP to Vietnam’s wood and wood product exports 4. Recommendations TransPacific Partnership Agreement had the participation of 4 countries, and later grew to 12 members by 2013. TPP was one of the most significant free trade agreements (FTAs) initiatives around the globe.

1 Overview of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)

2 The situation of Vietnam's wood and wood products export activities in the context of CPTPP

3 Opportunities and Challenges of CPTPP to Vietnam’s wood and wood product exports

1

Overview of the Comprehensive and

Progressive Agreement for Trans-Pacific Partnership (CPTPP)

FROM TPP TO CPTPP

MARCH 8, 2018

SAN DIEGO, CHILE

11 MEMBERS

1.2 THE MAIN CONTENTS OF CPTPP

• Stipulating the relationship between 12 countries

• Handling other matters relating to the validity,

withdrawal or accession to the CPTPP Agreement.

All core commitments outlined in the TPP Agreement

are still upheld in the CPTPP Agreement.

CPTPP allows member countries to postpone the

implementation of 20 sets of requirements

07 Articles and 01 Appendix

Generally preserves the contents of the TPP Agreement

Modifications

1.3 Commitment between Vietnam and Canada

regarding wood and wood product exports

For raw timber products 0% import duties

For processed wood products 0-3% import duties

1.3.1 Tariff Preferences

According to the CPTPP agreement, Canada has committed to allowing Vietnam to enjoy the following tariff rates for exports to Canada:

1.3 Commitment between Vietnam and Canada regarding wood and wood product exports

1.3.2 Rules of Origin

Woods and wood products shall be treated as originating goods if:

Wholly obtained

Produced in Vietnam or a CPTPP country entirely from originating materials; Satisfying the applicable

product-specific rules of origin (PSR)

1.3 Commitment between Vietnam and Canada regarding wood and wood product exports

1.3.3 Trade Remedies

The Special Import Measures Act (SIMA) allows Canada to

apply the following trade remedies:

anti-dumping countervailing safeguards anti-circumvention

taxes

2 The situation of Vietnam's

Wood and Wood products export activities in the context of

CPTPP

• Vietnam is one of the world’s largest exporters

of timber and timber products.

• The growth rate of this commodity in Vietnam has increased steadily over the years in the past ten years.

2.1 Overview of Vietnam’s timber industry

and timber’s export activities

Figure: Export turnover of Vietnam's wood and wood products in the period

from 2009 to 2020

Chair Furniture

6 categories of high-value export wood & furniture of

Vietnam in 2021

Table: Vietnam's wood and wood products exported to other

countries in the first nine months of 2020 and 2021

Source: Forest Trends and the Associations: FPA Binh Dinh, HAWA, BIFA

2.2 Overview of the Canada import market for timber and wood products

• One of the world’s

largest producers, exporters, and

importers of timber and wood products.

• A robust wood

industry with an output of up to 600 million m3/year.

Canadians favor products that are durable and long-lasting, so there is an increasing demand for high-end furniture.

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.

Wood products exported to Canada should focus on materials that can withstand the impact of climate change and weather because in winter Canada is very cold

Trends and consumption habits of

W&WP of Canadian consumers

04

Consumer demand in the Canadian market for Asian products is important to low- and middle-income people who cannot afford Canadian-made products

2.3 Vietnam’s Wood and Wood Products exports to Canada in the context of CPTPP

2.3.1 Before signing CPTPP

• High tariffs

⚬ Limited market access

⚬ Posed challenges for Vietnamese exporters

• Preferential treatment under two tariff regimes:

⚬ Most Favored Nation (MFN) within the framework of WTO

⚬ General Preferential Tariff (GPT) regime

• Aim: Supporting economic development of

developing and least developed countries

• Wood and wood products classified under Chapter

44 and Chapter 94: the GPT regime applies to all these product lines

⚬ Wood and wood products: 0% to 6%

⚬ Wooden furniture: 3% to 6%

GPT tariff regime

Despite challenges,

Before CPTPP, Vietnam's

exports of timber and

wood products to Canada

did show some minimal

increases

2.3.2 After signing CPTPP

• Tariffs:

⚬ Canada commits to eliminating import tariffs for 95% of tariff

lines, equivalent to 78% of Vietnam's exports to Canada

⚬ Raw timber products (HS Code 44): 100% of Vietnam's

export value will enjoy a 0% tariff rate

⚬ Processed wood products (HS Code 94): ranges from 0-3%

• In 2019: About 153 Million USD => noticeable rise of nearly

15 Million USD (10.7% increase compared to 2018)

• 2019-2021: Robust growth

⚬ Despite the impact of the

Covid-19 pandemic, 2021 ended at a pretty high

number (Nearly 200 Million USD)

⚬ Wooden furniture

accounted for the majority

2.3.2 After signing CPTPP

Technical barriers to trade (TBT):

• Canada has specific requirements for the quality,

safety, and labeling of wood products

Sanitary and phytosanitary (SPS) measures

• International Standards for Phytosanitary Measures

No 15 (ISPM 15)

Customs administration and trade facilitation:

• Canada requires that:

⚬ Importers submit an electronic declaration of their goods before arrival

⚬ Importers pay any applicable duties and taxes upon entry

⚬ Delays or errors in these processes can increase the cost and time of trade

Non-tariffs

Vietnam is Canada's top ten largest forest and value-added wood product exporter

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.

Vietnam’s wood export activities to Canada also encounter some difficulties

2.4 Evaluation of Vietnam's wood export

activities to Canada after CPTPP entered into

force

04

Vietnam’s wood export activities to Canada are also influenced by the global and regional economic situation, especially the COVID-19 pandemic

3 Opportunies and Challenges for Vietnam's wood and wood products export

3.1 Opportunities for Vietnam's wood export

1 A large and

potential

market

2 Pacific Strategy

Indo-2 INDO-PACIFIC STRATEGY

• On 27 November 2022, the president of Canada - Justin Trudeau officially announced the Indo-Pacific Strategy of this country

• It positioned ASEAN as the center of the region and wished to sign a Canada-ASEAN free trade

agreement

• Vietnam is considered as a gateway to enter the

region

3.2 Challenges that

Vietnam is facing

• Vietnamese timber industry and wooden products itself still exists some limitations.

Anti-dumping problems

Increasing competitiveness due to tax reduction

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.

3.2.Challenges that Vietnam is facing

02

Strict legal requirements

• In terms of

Government

2 In terms of Enterprise

4 RECOMMENDATIONS

RECOMMENDATION FOR VIETNAMESE GOVERNMENT

• Invest in research and

development of

competitive advantages

• Promote the quality of workers

• Organize vocational training programs and providing basic equipment and supplies

• Apply modern

advanced technologies • Develop concentrated

industrial zones and craft villages

• Support enterprises to take advantage of CPTPP Agreement

• Enhance information regarding market conditions, trade policies, and export measures in CPTPP partner countries

Developing distribution system• Optimize transportation, storage, and management

operations,

• Reducing costs, increasing flexibility, and responding quickly to customers' demands

Research market &

consumers• Conduct thorough research on consumer

tastes

• Diversify export products

Managing production process• Control input materials, cultivation

• Compel requirements of quality, components, packaging, and labeling, meet Rules of Origin

RECOMMENDATION FOR VIETNAMESE

ENTERPRISES

THANK YOU

G R O U P 1