Despite being the third biggest global textile and apparel exporter to Canada, Vietnam only has a 12 percent share of clothing imports into Canada.
Vietnam exported garments and textiles to Canada, totaling $1.1 billion, as against overall clothing imports of $13-$15 billion, impeded by the origin of fiber materials of a free trade agreement (FTA).
Vietnam has a treaty with Canada called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Still, exports need to be improved due to the origin of the materials clause in the CPTPP.
The CPTPP is an FTA between Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore, and Vietnam, with the UK added in 2022.
The utilization rate of CPTPP through Vietnamese domestic material localization is still at only about 50 percent.
The Vietnam News Agency quoted Bob Kirke, President of the Canadian Apparel Federation, who said there were still shortcomings in the CPTPP regulations on textiles.
Kirke believes that Vietnam and Canada’s textile and garment industries need to collaborate in proposing a thorough review of the agreement to the governments.
To address this situation, Kirke suggested a separate FTA between Canada and Vietnam, which Canada has done with Chile and New Zealand, members of CPTPP, to eliminate the application of material origin principles.
The textile and garment industry in Vietnam, too, wants a separate FTA with Canada to expand apparel imports to Canada, which will bypass the material of origin principle.