Many opportunities for Vietnam pangasius exports to 10 CPTPP countries

In November 2018, the National Assembly passed a Resolution on ratifying the Agreement on Comprehensive and ProgressiveTrans-Pacific Partnership Agreement (CPTPP). This Agreement took effect for Vietnam from January 14, 2019.

CPTPP members are committed to eliminating import duties on nearly all of their import tariffs. The majority of CPTPP countries apply a common import tax to all other partners, except for some countries such as Canada, Chile, Japan and Mexico that apply separate import tariffs for each CPTPP country.

Most seafood products, including pangasius, shall be eliminated tariff when the CPTPP Agreement comes into effect. Pangasius enterprises may believe that there shall be many opportunities for Vietnamese pangasius in some traditional or potential markets such as Mexico, Japan and Chile.

Currently, Mexico is the fifth largest pangasius importer of Vietnam (after China - Hong Kong, EU, US and ASEAN). In the first 4 months of 2019, the export value of pangasius to this market reached US$40.8 million, up 31.5% over the same period in 2018. This is also the largest pangasius importer in Latin America and in 10 CPTPP countries. Under the Agreement, pangasius products shall be entitled to 0% tax in the third year after the CPTPP Agreement comes into effect. This is also an opportunity for exporters to increase exports to this market in the near future.

Compared to large seafood importers in Latin America such as Mexico or Brazil, Chile is only a small importer of Vietnamese pangasius. However, in recent years, especially after the Vietnam - Chile Free Trade Agreement (VCFTA) was signed at the end of 2011 and came into effect in early 2014, the export of pangasius to this market has many positive changes, in which the people of Chile have gradually known about pangasius of Vietnam. Currently, thanks to the import tax advantage of 0% for frozen pangasius and basa fish (HS 030462), through Chilean distribution channels, Vietnamese pangasius products might not only be consumed in this country but also introduced and present in other contries in the region. In 2018, the export value of pangasius to Chile also went up by 11.3% over the same preiod in 2017.

2018 marked the growth of pangasius exports to Japan market. In that year, the total export value of pangasius to Japan increased by 37.6% compared to 2017. Continuing the upward trend in 2018, in the first 4 months of 2019, pangasius exports to Japan reached US$8.58 million, up by 38,6% compared to the same period in 2018.

With the two previous free trade agreements (FTAs), Vietnam - Japan and ASEAN - Japan, some of Vietnam's seafood products exported to Japan have been eliminated from tariff barrier. With CPTPP, many seafood products that have not yet been committed to abolishing taxes in these two FTAs shall also enjoy 0% tax when exports to Japan. In particular, some seafood products shall enjoy the tax rate of 0% as soon as the agreement comes into effect, including pangasius products that are immediately exempted from the current 3.5-10.5%. Thus, with advantages from 3 FTAs with Japan, Vietnamese enterprises have more opportunities to further increase pangasius exports to Japan market.

In addition to the major importers, there is a need to pay attention to some potential markets participating in the CPTPP Agreement such as Canada, Australia, Singapore, Malaysia. These markets are being evaluated with many opportunities to increase export market share in the coming time. In 2018, pangasius export to these countries also saw positive growth such as: Canada increased by 19.5%; Australia went up by 34.4%, Singapore climbed by 20.7%, Malaysia rose by 72.2% over the previous year.

In addition to the challenges that CPTPP brings to Vietnamese pangasius exporters, there are many opportunities ahead. Therefore, businesses need to study the benefits that this agreement brings in terms of tariffs to seize opportunities and continue to increase exports.