Course: International Trade Policy

Members:
Pham Phuong Anh 2213550023

Tran Ngoc Anh 2213340014

Duong Mai Chi 2212790013

Ly Ha Phuong 2214150628
Textile and garments export from Vietnam to Canada
under the impact of CPTPP:
"Billion dollars" potential market and challenges of
green practices
 Introduction
The textile and garment industry has been a driving
force behind Vietnam's economic transformation
One of the most significant
developments in recent years
has been the implementation of Comprehensive &
the CPTPP, a landmark Progressive Agreement
multilateral trade agreement for Trans-Pacific
encompassing 11 nations, Partnership
including Vietnam and Canada
 Canada
a member of the CPTPP and a highly
developed nation with a robust
economy, discerning consumer base,
and stringent quality standards
represent a vast "billion dollars"
potential market for Vietnam's textile
and garment exports
The adoption of green practices in the textile and garment industry
is not merely a matter of compliance but also a strategic imperative
for long-term success and global competitiveness.
 Table of Contents

Current
Overview 01 02 situation

Opportunities &
Challenges
03 04 Recommendations
01
Overview of CPTPP
and textile and
garment industry
exports
1.1 Overview of Comprehensive and Progressive Agreement
for Trans-Pacific Partnership - CPTPP

• A free trade agreement (FTA) signed among 12 country members.

• Including Canada, Mexico, Peru, Chile, the United Kingdom, New
Zealand, Australia, Japan, Singapore, Brunei, Malaysia and
Vietnam.
• Encompassing areas often deemed "non-traditional" such as
labor, environment, state-owned enterprises, government
procurement, sustainable development, good governance,
transparency, and more.
• Entered into force in Vietnam on January 14, 2019.
1.2 Overview of textile and garment industry exports

One of the key industries in Vietnam

3 sub-sectors:
• The upstream sector
• The midstream sector
• The downstream sector
1.3 Overview of CPTPP’s commitments on exporting textile
and garment from Vietnam to Canada
1.3.1 Commitments on Tariffs

Immediate Elimination

Phased Elimination
• A 4-year schedule
• A 6-year schedule
1.3.2 Commitments on Tariffs
a) General Rules of Origin

3 main criteria for textile ROO:

• Wholly obtained goods

• Entirely produced goods
• Goods incorporate non-originating materials
 b) Tariff Shift Rule

Change in Chapter (CC)

Change in Heading (CTH)
Change in Subheading (CTSH)
c) Regional Value Content (RVC) Requirement

d) Product-Specific Rules

• The "yarn forward" rule

• De minimis rule
• 2 types of cumulation for calculating RVC
1.3.3 Safeguard Measures for Textiles
a) Global Safeguards

Applied to all WTO member

b) Transitional Safeguards

Anti-Dumping & Anti-Subsidy Measures

 1.3.4 Customs Cooperation, Surveillance
• Implementing preferential export tariffs and special preferential import
tariffs established under the Agreement
• Verifying the origin of imported and exported textile goods
• Upholding customs procedures and trade facilitation commitments.

• Enforcing intellectual property rights (IPR) at the border and cooperating

with right holders.

• Controlling licenses, certificates, and other documents required for customs

clearance of textiles
 1.3.5 Commitments on Labor
• Not to encourage trade or investment by weakening or lowering
labor law protections
• Not to refuse to enforce labor laws in a manner
• Not to waive or fail to comply with laws implementing labor rights
to attract trade or investment
• Commit to not encouraging the import of goods produced in whole
or in part by forced labor
• Commit to cooperate to improve labor standards and further promote
common commitments on labor issues
• Raise public awareness of their labor laws
 1.3.6 Commitments on Environment
• Establish and enforce environmental policies and laws effectively
• Not violate environmental protection laws to encourage trade or
investment
• Canada ensures that environmental protection is maintained when trade is
liberalized and does not lower environmental standards
• Raise public awareness of environmental laws and policies
• Not to reduce the legal effect or exempt environmental regulations that
affect trade and investment between the Parties
• Commit to implementing multilateral environmental agreements (MEAs)
• Encourage businesses to apply corporate social responsibility principles
to their policies and practices
 1.3.7 Commitments on Technical Barriers to Trade (TBT)
-Canada is committed to complying with WTO

-Canada is committed to non-discrimination between conformity

assessment bodies headquartered in CPTPP countries

- Canada allows conformity assessment bodies in the territories of

other Parties to apply for recognition

-Canada commits to publishing new technical regulations and

conformity assessment procedures in a way
 02
Current situation of
exporting Vietnam’s
textile and garment
to Canada
Canada is a potential market for Vietnam’s textile and garment
exports thanks to the Comprehensive and Progressive
Agreement for Trans-Pacific Partnership (CPTPP)

Vietnam’s exports of garment and textile products to Canada

have also increased significantly
2.1 Vietnam’s textile and garment exports to Canada
before the implementation of CPTPP

Before the CPTPP,

Vietnam’s textile
and garment exports
to Canada were
already significant
but had room for
growth
In 2018, CPTPP countries were considered to be large export markets for
Vietnam’s textile and garment industry, with export turnover reaching
about 5,88 billion dollars, accounting for about 16,04% of Vietnam’s
total textile and garment export turnover to the world.
Prior to the CPTPP, many of Vietnam’s textile and
garment products faced MFN tariffs ranging from 17% to
18%.
Therefore, since CPTPP came into effect, it brought
Vietnam many opportunities to develop the textile and
garment export industry to many countries, especially
Canada.
 2.2 Vietnam’s textile and garment exports to Canada
after the implementation of CPTPP

• Vietnam's textile and garment trade with Canada, a potential

market among CPTPP participating countries, has made a leap
in 2019.

• Canada immediately eliminated tariffs on 42 lines of

Vietnamese textile and garment products.
• Vietnam's textile and garment export turnover in 2019 to
Canada reached more than 1.1 billion USD for the first
time, an increase of 15% compared to 2018.

• This result has brought Vietnam over Cambodia to rank

3rd in textile and garment exports to Canada.
 Vietnam’s textile and garment export value to Canada reached
2022 about $1.8 billion, marking a 41.2%

According to the General Department of Customs, textile and

garment export turnover reached more than 1.09 billion USD,
witnessing a noticeable decrease by 17.1%.
2023 But 2023 will also mark a record breakthrough textile and
garment industry on export markets.

February 2024, textiles and garments are the items with the
2024 highest turnover among Vietnam's main products exported to
Canada.
In summary, the CPTPP has opened
doors for Vietnam’s textile and
garment industry
03
Opportunities &
Challenges
3.1. Opportunities of “billion dollars” potential market
3.1.1 Benefits to reduce import tax rates

Vietnamese fabric and apparel exports can benefit from these

markets' high disposable incomes and demand for high-quality
textiles.
 CPTPP

• Create advantageous conditions for

bilateral commerce

• Has significantly impacted the growth of

the market share of products
3.1.2 Solving lack of supplies
• CPTPP includes a "yarn forward"
rule of origin, encouraging member
nations to invest in domestic yarn
and fabric production.
• One of the key benefits of following
the "yarn forward" guideline is
reduced reliance on imported yarn
and fabric.
 3.1.2 Solving lack of supplies
• Investing in domestic production helps
Vietnam diversify its supply sources and
reduces vulnerability to supply chain
interruptions, currency volatility, and trade
conflicts.
• Local yarn and fabric production is cost-
effective.
• Vertical integration in the textile business can
promote technological advancement and
innovation.
 3.1.3 Opportunities for the labor market

• Investing in yarn and fabric production can boost

economic growth and create job opportunities.
• The textile industry's growth can boost worker
welfare. As the workforce grows, employers are
under additional responsibility to provide fair
salaries, safe working conditions, and access to
benefits like healthcare and social security.
3.1.4 CPTPP may further encourage investment in
Vietnam’s textile industry

Attract more domestic and foreign investment in

production and business activities
3.2. Challenges of green practices
3.2.1 Strict Rules Of Origin (ROO)
• Vietnam must adhere to origin rules, environmental
principles, and fair business trade while assuring
reliable supply.

• To qualify for preferential tariff treatment under the

CPTPP, products must meet specified criteria, which
include a more complex three-stage (3) process than in
earlier accords.
 3.2.2 Environmental Regulatory Hurdles
In Chapter 20 (4) , “the Parties recognize
that it is inappropriate to encourage trade or
investment by weakening or reducing the
protection afforded in their respective
environmental laws.”

There are further obligations to protect the

ozone layer and marine environments.
 04
Recommendations for
green practices
 4.1 Recommendations for the government

• To develop and periodically update sector

norms and benchmarks for waste
discharge, energy consumption

• Strict compliance with environmental

legislation can be enforced through a
combination of inspections, appropriate
punishments for violations
4.1 Recommendations for the government
• The application of Industry 4.0
advancements, including automation
and robust information technologies

• Research on innovative, renewable, and

natural-origin materials and chemicals,
alongside promoting design for
sustainability guided by life cycle
assessment
 4.2 Recommendations for the enterprises in the textile
and garment industry

• Strengthening collaboration between universities,

colleges, vocational schools, manufacturing
businesses, technology providers, and chemical
suppliers

• The application of Best Available Techniques

(BATs) and Best Environmental Practices (BEPs) in
the textile and garment industry
 4.2 Recommendations for the enterprises in the textile
and garment industry

• Encouraging public-private partnerships for investment in

research and technology development and transfer
• Utilize VITAS' yearly meetings and web-based forums
 Conclusion

CPTPP has opened up a “billion-dollar" potential market for Vietnam's

textile and garment exports to Canada.

While the CPTPP presents a lucrative opportunity for Vietnam's textile

and garment exports to Canada, realizing the full potential of this market
requires a concerted effort to address the challenges of green practices.
Thank
you for
listening