According to figures compiled by the Ministry of Industry and Trade, the nation’s import-export turnover with the CPTPP market reached US$1.4 billion last year. The country primarily shipped agricultural products, machinery equipment, phones and components, garments and textiles, footwear, and seafood to 10 CPTPP members with a value of US$46 billion, whilst its imports from this market hit US$45.4 billion.
The export markets with the highest value include Singapore, Malaysia, Japan, Australia, Canada, Mexico, and Chile. In terms of the remaining three markets, Peru, Brunei, and New Zealand, despite enjoying strong growth, the absolute value of commercial transactions remained low.
Officially effective from January, 2019, the CPTPP has now passed three years of enforcement, a period in which the global economy and trade, as well as trade between Vietnam and CPTPP partners, facing many difficulties. This includes the US-China trade war and the globally-spreading COVID-19 outbreak, both of which led to unprecedented disruption in trade activities.
Complex pandemic developments, social distancing measures, temporarily closed economies, along with disruption to production and transport chains are some of the unusual factors which have directly impacted commercial activities.
Amid this context, trade between the nation and its CPTPP partners has been still maintained seamlessly and smoothly. In the opening year, the country's export turnover to the bloc reached US$39.5 billion. In the second year in 2020, due to the impact of COVID-19 export turnover fell slightly to hit US$38.75 billion. Following this, the third year saw the nation regain its growth momentum, with export value reaching US$336.3 billion, thereby contributing significantly to the entire country’s good export growth. This demonstrates the great efforts of local enterprises to overcome difficulties.
Ample room remains for export growth
Tran Thanh Hai, deputy head of the Import-Export Department under the Ministry of Industry and Trade, assessed that over the past three years, domestic enterprises have effectively capitalised on the advantages of the CPTPP to increase the export of goods to the groups member markets.
“Different from the EU region, Vietnam's traditional export market, the CPTPP region, especially American countries such as Canada, Mexico, and Peru are relatively new markets. Before the CPTPP took effect, Vietnam's exports to these markets were still modest, but since the trade deal came into force, the nation's export value increased significantly. This reflects that local businesses have taken full advantage of this free trade agreement (FTA) to boost exports," said Hai.
According to a World Bank (WB) study, it is predicted that by 2030 Vietnamese exports to CPTPP member countries will climb to reach US$80 billion, thereby accounting for roughly 20% of the nation's total export turnover.
Judging from another angle, joining the CPTPP will also provide the country with the opportunity to restructure the import-export market in a more balanced direction.
Moreover, new markets in the CPTPP, such as Canada, Mexico, and Peru have recorded impressive export growth rates.
Nguyen Thi Thu Trang, director of the Vietnam Chamber of Commerce and Industry's WTO and Integration Centre, emphasised, "The CPTPP is giving very positive initial results from paving the way for Vietnam's exports. The country entered the Americas, a region that is still new and has a lot of potential for its export growth."
For example, with Canada, data provided by the Vietnam Trade Office in Canada indicates that Vietnamese exports to the Northern American nation reached nearly US$5.3 billion in 2021. This marked the third consecutive year of positive growth since 2019 after both sides officially became members of the CPTPP.
All Vietnamese export products to the Canadian market in 2021 saw growth compared to 2020, with machinery, electricity, and electronics being the key products that made a major contribution to the nation's total export value.
The trend of shifting supply chains and impressive production capacity of local enterprises has served to capture the attention of Canadian businesses, especially in the field of the support industry.
The country currently makes up Canada's largest trading partner in Southeast Asia, with its goods only making up for 1.7% of Canada's total import value. This indicates that there remains plenty of room ahead for the nation to boost market expansion to this market.
The fact that the Canadian Government is continuing to pursue a strategy of market diversification and views Vietnam as an important partner in Asia is a prime opportunity for Vietnamese businesses to access and expand to exploit the potential market moving forward.
Experts say that this year, FTAs, including the CPTPP, will continue to open up advantages in terms of tariff incentives as a way of attracting investment to increase production capacity, thereby contributing to export businesses becoming more professional in the international arena.
As a result, exports remain a bright spot of the national economy, particularly as they ensure jobs for workers and will help the country become involved more deeply in the global supply chain.
