A common question we hear: If Vietnam is already part of CPTPP – where 96% of Canadian import tariffs are reduced to 0% – why bother with another ASEAN–Canada FTA?
CPTPP: Big opportunities, but strict rules
CPTPP is a “high-standard club.” Only four ASEAN countries, including Vietnam, have been admitted. That gives Vietnam a head start in Canada – but it also creates challenges:
- Strict rules of origin: A product made in Vietnam with inputs from a non-CPTPP ASEAN country (e.g., Thailand) may not qualify for CPTPP’s 0% tariff.
- In today’s globalized supply chains, where production stages are spread across multiple countries, many goods produced in Vietnam fail to meet CPTPP origin criteria.
ASEAN–Canada FTA: A complementary pathway
This is why the ASEAN–Canada FTA negotiations are strategic. The new agreement is expected to adopt more flexible rules of origin and lower thresholds than CPTPP, creating opportunities for SMEs across ASEAN – especially those outside CPTPP. For Vietnam, it provides an additional “second channel” to secure tariff preferences into Canada.
Details of the agreement will only be known by late this year or early next. But Vietnamese exporters should already be making long-term moves:
- Expand supply chains within ASEAN – sourcing competitively from the region, not just CPTPP members.
- Establish a presence in Canada now – warehouses, brands, trademarks. Once the ASEAN–Canada FTA comes into effect, Vietnam’s “CPTPP advantage” over competitors like Thailand or the Philippines will fade. We can only stay ahead if we move first. The time to decide is NOW.
Is it too early to enter Canada? - The truth is: either you think big and act fast, or you get left behind.
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Note:
This article is prepared based on the current legal regulations of Vietnam and practical experience. The information in this article should only be used for reference purposes. We assume no responsibility or legal obligation to any individual or organization using the information in this article for purposes beyond reference. Before making any choices or decisions, we kindly request our valued customers to seek additional official recommendations or contact NexusNovum for in-depth advice from our experts.
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