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

P R E S E N T A T I O N

G R O U P

OPPORTUNITIES AND
CHALLENGES OF EXPORTING
VIETNAM'S WOOD AND WOOD
PRODUCTS TO CANADA IN
THE CONTEXT OF CPTPP
L e c t u r e r :

V U

H U Y E N

P H U O N G

( P h . D )


Content

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
4. Recommendations

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


• 1. FORMATION HISTORY OF CPTPP
BACKGROUND
• Trans-Pacific 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.

MARCH 8, 2018

SAN DIEGO, CHILE

FROM TPP TO CPTPP
• The withdrawal of the United States in
2017.
• In November 2017, the 11 remaining
countries agreed to change the name of
the Agreement

11 MEMBERS


1.2 THE MAIN CONTENTS OF CPTPP

07 Articles and 01 Appendix
• Stipulating the relationship between 12 countries
• Handling other matters relating to the validity,
withdrawal or accession to the CPTPP Agreement.
Generally preserves the contents of the TPP Agreement
All core commitments outlined in the TPP Agreement
are still upheld in the CPTPP Agreement.

Modifications
CPTPP allows member countries to postpone the
implementation of 20 sets of requirements


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

For raw timber products

For processed wood products

0%

import duties

0-3%

import duties

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


2.1. Overview of Vietnam’s timber industry
and timber’s export activities
• 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.
Figure: Export turnover of Vietnam's wood and wood products in the period
from 2009 to 2020


6 categories of high-value export wood & furniture of
Vietnam in 2021

Furniture
45%

Plywood

7%

Chair

Woodchip

Wood Pellet

Rotary Veneer

25%

3%

12%

1%


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

Table: Vietnam's wood and wood products exported to other
countries in the first nine months of 2020 and 2021


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.


Trends and consumption habits of
W&WP of Canadian consumers
growing trend towards compact, multi-purpose
01 The
furniture made from eco-friendly materials.
.

03
.

02
.

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

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.

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


MFN tariff regime
• Canada has committed to this tariff
level within the WTO framework
since 1995
• Vietnam - one of the 228 countries
enjoying Canada's MFN tariff
preferences
• Wood and wood products: 0% to
9.5%
• Wooden furniture - major export
item of Vietnam: 6% to 9.5%

GPT tariff 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%


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%

2.3.2. After signing CPTPP
• 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