The Canada-Vietnam Free Trade Agreement: What You Need to Know
The Canada-Vietnam Free Trade Agreement (CVFTA) was signed on July 7, 2015, and came into effect on August 11, 2020. This agreement provides Canadian businesses with greater access to the Vietnamese market and offers Vietnamese firms the opportunity to expand into Canada. The CVFTA is designed to eliminate tariffs on goods and services traded between the two countries, making it easier and more cost-effective for businesses to conduct international trade.
Benefits for Canadian Businesses
The CVFTA provides Canadian businesses with significant benefits. The agreement eliminates tariffs on 98% of Canadian goods exported to Vietnam, including seafood, forestry products, and industrial goods. The elimination of these tariffs means that Canadian businesses will save millions of dollars in tariffs annually, making it easier for them to compete with other international markets.
The CVFTA also provides Canadian companies with new opportunities to conduct business in Vietnam. The agreement provides Canadian firms with greater access to Vietnam`s services sector, including telecommunications, financial services, and transportation. The agreement also provides Canadian investors with greater protection for their investments in Vietnam.
Benefits for Vietnamese Businesses
The CVFTA also offers significant benefits for Vietnamese businesses. The agreement reduces tariffs on nearly 100% of Vietnamese products exported to Canada, including garments, footwear, and seafood. The reduction of tariffs will make it easier for Vietnamese companies to compete in the Canadian market and will increase their profits.
The agreement also offers Vietnamese firms the opportunity to expand their business in Canada. The CVFTA provides Vietnamese companies with greater access to Canada`s services sector, including telecommunications, financial services, and transportation. The agreement also increases protection for Vietnamese investors in Canada.
The Future of the CVFTA
The CVFTA is a growing success, and trade between Canada and Vietnam has continued to increase since the agreement took effect. The total trade between the two countries reached CDN $9.3 billion in 2019, with Canadian exports to Vietnam increasing by 25% and Vietnamese exports to Canada increasing by 29%.
The CVFTA is expected to continue to grow in the coming years, and Canadian businesses are encouraged to explore opportunities in Vietnam. Vietnam is a fast-growing market with a population of approximately 97 million people and a rapidly growing middle class. The country also has a strategic location in Southeast Asia, making it an ideal destination for businesses looking to expand their operations in the region.
In conclusion, the Canada-Vietnam Free Trade Agreement is a significant step forward for Canadian and Vietnamese businesses. The agreement provides significant benefits for both countries and has the potential to increase trade between the two nations significantly. Canadian businesses are encouraged to explore opportunities in Vietnam, and Vietnamese businesses should consider expanding their operations in Canada. The CVFTA is a growing success, and there has never been a better time to take advantage of the opportunities it presents.