Overview of CPTPP

Opportunities presented by CPTPP

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), one of the largest free trade agreements in the world, was concluded on 23 January 2018 in Tokyo, Japan, and signed on 8 March 2018 in Santiago, Chile. The CPTPP is currently in force for eight of the 11 Parties – it entered into force on 30 December 2018 for Australia, Canada, Japan, Mexico, New Zealand, and Singapore; 14 January 2019 for Vietnam; and 19 September 2021 for Peru.

The CPTPP provides a rules-based trading environment and enhances market access for Canadian exporters looking to export to Vietnam. Among other outcomes, it establishes duty-free access for trade in goods between Canada and Vietnam, eliminates tariffs for many key Canadian exports and provides solutions for digital trade issues through a comprehensive e-commerce chapter.

Trade between the two countries has improved as a result of CPTPP. Vietnam was Canada’s largest trading partner in ASEAN in 2020 – two-way merchandise trade between the two countries reached an all-time high of about USD 9 billion in 2020, up from USD 8 billion in 2019, predominantly driven by Canadian exports to Vietnam.

After Indonesia, Vietnam was the second-largest destination in ASEAN for Canadian agricultural and seafood products in 2020. According to Export Development Canada (Canada’s export credit agency), despite the effects of the pandemic, Canada shipped goods worth USD 548 million to Vietnam in 2020, of which agri-food accounted for about USD 284 million (around 52%).

Once the agreement is fully implemented, Canada will have duty-free access to Vietnam for 94% of its agriculture and agri-food products exports. This will help Canada level the playing field with regional competitors that already enjoy privileged access to the Vietnamese market through Free Trade Agreements (FTAs), and provides an advantage over those countries that are still exploring or negotiating FTAs with Vietnam.

Canadian small and medium‑sized enterprises in these sectors are already taking advantage of the tariff reductions and eliminations under CPTPP.

For example, Ocean Choice International Inc, an exporter of wild‑caught seafood from Atlantic Canada, has become increasingly active in the Vietnam market, which has eliminated or significantly reduced tariffs for Canadian fish and seafood products. Dale Oldford, vice‑president of product management at Ocean Choice, said, “The biggest benefit of the agreement for a company like Ocean Choice – while it’s hard to put sales numbers on it – is that it’s opened up many more discussions about our products.” He explained that tariff reductions have helped the company in terms of pricing and volumes and added that the company’s future plans include focusing on dynamic countries in the Asia‑Pacific region such as Vietnam that have “fairly significant population bases and all the right demographic profiles.”

Canadian Vita Corporation, a supplier of ginseng products, benefited from the elimination of a 5% tariff on ginseng under CPTPP and reduced paperwork for exporters and importers through the agreement’s self-certifying Certificate of Origin process. Hieu Tran, CEO of the company, found strong demand for the Canadian‑grown ginseng that he brought with him on a fact‑finding trip to Vietnam in 2019. Subsequently, the Trade Commissioner Service (TCS) in Hanoi informed the company about how CPTPP can help, assisted in areas such as the paperwork and licences needed to import ginseng into Vietnam and hosted events to introduce the company to potential partners and customers and provided contacts. By early 2022, 60% of the company’s sales were from Vietnam, with another 25% coming from Singapore and Malaysia –  both of which are also CPTPP members. Canadian Vita has opened its own stores in Vietnam, and plans to have one in every Vietnamese province by 2023.

Canadian exporters in the provinces listed in the below table stand to benefit from tariff elimination on their key agricultural and agri-food product exports.

Tariff elimination

This section summarizes key tariff elimination outcomes for the exports to Vietnam applicable for CPTPP members. The complete tariff elimination schedule for Vietnam under the terms of CPTPP can be accessed here (PDF).

HS Code 01: Live Animals

All products under HS code 01 reached 0% tariff in year 1 (2018).

HS Code 02: Meat and edible meat offal

• Products under HS codes 02.01 & 02.02 (Meat of bovine animals, fresh or chilled/frozen) reached 0% tariff in year 3 (2020).
• Products under HS code 02.03 (Meat of swine, fresh, chilled or frozen) will reach 0% tariff between year 8-10 (2025-2027). In year 5 (2022), products under HS code 02.03 are subject to tariffs in the range of 5.6% to 13.5%.
• HS codes 02.04 & 02.05 (Meat of sheep or goats, fresh, chilled or frozen & Meat of horses, asses, mules or hinnies, fresh, chilled or frozen) reached 0% tariff in year 4 (2021).
• Products under HS codes 02.06 (Edible offal of bovine animals, swine, sheep, goats, horses, asses, mules or hinnies, fresh, chilled or frozen) are moving to 0% tariff by years 5 (2022), 6 (2023) or 11 (2028), depending on the product codes at the 6-digit level. In year 5 (2022), products under HS code 02.06 are subject to tariffs in the range of 0% to 5.4%.
• Products under HS codes 02.07 (Meat and edible offal, of the poultry of heading 01.05, fresh, chilled or frozen) will reach 0% tariff between year 6 (2023) and year 13 (2030). In year 5 (2022), products under HS CODE 02.07 are subject to tariffs in the range of 6.6% to 24.6%.
• Products under HS code 02.08 (Other meat and edible meat offal, fresh, chilled or frozen) will reach 0% tariff by year 6 (2023). In year 5 (2022), products under HS code 02.08 are subject to reached tariffs in the range of 0.8% to 1.6%.
• Products under HS code 02.09 (Pig fat, free of lean meat, and poultry fat, not rendered or otherwise extracted, fresh, chilled, frozen, salted, in brine, dried or smoked) will reach 0% tariff by year 8 (2025). In year 5 (2022), products under HS code 02.09 are subject to a tariff rate of 3.7%.
• Products under HS code 02.10 (Meat and edible meat offal, salted, in brine, dried or smoked; edible flours and meals of meat or meat offal) will reach 0% tariff between years 7 to 12 (2024-2029). In year 5 (2022), products under HS CODE 02.10 are subject to tariffs in the range of 5% to 11.6%.

HS Code 03: Fish and crustaceans, molluscs and other aquatic invertebrates

All products under HS code 03 (Live fish) reached 0% tariff in year 1 (2018), except: 0306.11.00A, 0306.12.00A, 0307.19.30, 0307.29.20A, 0307.39.20, 0307.49.30, 0307.59.30, 0307.60.30A, 0307.89.20A, 0307.99.20A, 0308.19.30, 0308.29.30, 0308.30.50, 0308.90.50 (all these codes share the same characteristic of being “Smoked”). These products reached 0% tariff by year 4 (2021).

HS Code 04: Dairy produce; birds' eggs; natural honey; edible products of animal origin

• Between year 01 (2018) and year 05 (2022), all products under HS code 04 reached 0% tariff, except 0407.21.00A & 0407.21.00B (other fresh fowl eggs of the species Gallus domesticus, which are within & out of WTO quota respectively), 0407.29.10A & 0407.29.10B (other duck eggs within & out of WTO quota respectively), 0407.29.90A & 0407.29.90B (other eggs within & out of WTO quota), and other eggs under HS code 0407.90 with categories A & B (within & out of WTO quota).
• For 0407.21.00A, 0407.29.10A, 0407.29.90A, and 0407.90 (category A products), the applicable tariff is 5% in year 5 (2022) and will reach 0% tariff by year 6 (2023).
• For 0407.21.00B, 0407.29.10B, 0407.29.90B, and 0407.90 (category B products), the applicable tariff is 80% in year 5 (2022) and this value will remain consistent in the future years.

HS Code 05: Dairy produce; birds' eggs; natural honey; edible products of animal origin

The tariff on all products under HS code 05 was reduced to 0% tariff in year 1 (2018).

HS Code 06: Live trees and other plants; bulbs, roots and the like; cut flowers and ornamental foliage

The tariff on all products under HS code 06 was reduced to 0% in year 1 (2018).

HS Code 07: Edible vegetables and certain roots and tubers

Tariffs on products under HS code 07 are being reduced to 0% in steps, starting from year 1 (2018) for some products, and with all the products under the 2-digit code reaching 0% in year 8 (2025). In year 5 (2022), products under HS code 07 are subject to tariff rates in the range of 0% to 11.2%.

HS Code 08: Edible fruit and nuts; peel of citrus fruit or melons

• Products under HS code 08 reached 0% tariff between year 1 (2018) and year 5 (2022), except 0805.10.20 (dried oranges), 0805.90.00 (other citrus fruit, fresh or dried), 0813.10.00 (dried apricots), 0813.30.00 (dried apples), products under the code 0813.50 (mixtures of nuts or dried fruits), and 0814.00.00 (peel of citrus fruit or melons including watermelons, fresh, frozen, dried or provisionally preserved in brine, in sulphur water or in other preservative solutions).
• For 0805.10.20 and 0805.90.00, the tariff rates in year 5 (2022) are 3.3% and 6.6% respectively and the tariffs will reach 0% in year 6 (2023).
• For 0813.10.00, 0813.30.00, and all products under the code 0813.50, the applicable tariff in year 5 (2022) is 5% and the tariff will be reduced to 0% in year 6 (2023).
• For 0814.00.00, the tariff in year 5 (2022) is 1.6% and the tariff will be reduced to 0% in year 6 (2023).

HS Code 09: Coffee, tea, maté and spices

All products under HS code 09 reached 0% tariff in year 4 (2021).

HS Code 10: Cereals

All products under HS code 10 reached 0% tariff in year 1 (2018), except: 1005.90.10 (Popcorn), 1005.90.90 (Other corn), 1005.90.90 (Other), 1008.30.00 (Canary seeds), 1008.40.00 (Fonio), 1008.50.00 (Quinoa), 1008.60.00 (Triticale), 1008.90.00 (Other cereals). These products will reach 0% tariff by year 5 (2022) to 6 (2023).

HS Code 11: Products of the milling industry; malt; starches; inulin; wheat gluten

All products under HS code 11 reached 0% tariff between year 1 (2018) and year 5 (2022), except 11.05 (flour, meal, powder, flakes, granules and pellets of potatoes) and 11.06 (flour, meal and powder of the dried leguminous vegetables of heading 07.13, of sago or of roots or tubers of heading 07.14 or of the products of Chapter 8), which have an applicable tariff of 5% in year 5 (2022). For these products classified under code 11.05 and 11.06, the tariff will be 0% in year 6 (2023).

HS Code 12: Oil seeds and oleaginous fruits; miscellaneous grains, seeds and fruit

Most products under HS code 12 reached 0% tariff in years 1 (2018), 3 (2020) & 4 (2021). Poppy seeds (HS 1207.91) will become duty-free by Year 11.

HS Code 13: Lac; gums, resins and other vegetable saps and extracts

All products under HS code 13 reached 0% tariff between year 1 (2018) and year 4 (2021), except 1302.11.10 (vegetable saps and extracts of Pulvis opii) and 1302.11.90 (other vegetable saps and extracts), which are subject to tariff of 2.7% each in year 5 (2022). For these products under code 1302.11.10 and 1302.11.90, the tariff will be reduced to 0% in year 11 (2028).

HS Code 14: Vegetable plaiting materials (for example, bamboos, rattans, reeds, rushes, osier, raffia, cleaned, bleached or dyed cereal straw, and lime bark); vegetable products not elsewhere specified or included

All products under HS code 14 reached 0% tariff in year 1 (2018).

HS Code 15: Animal or vegetable fats and oils and their cleavage products; prepared edible fats

Tariff on products under HS code 15 are being reduced to 0% in steps, with the tariff for some products going down to 0% in year 1 (2018), for some others between years 3 to 8 (2020 to 2025) and for the rest in year 11 (2028). In year 5 (2022), products under HS code 15 are subject to tariffs in the range of 0% to 16.3%.

HS Code 16: Preparations of meat, of fish or of crustaceans, molluscs or other aquatic invertebrates

Products under HS code 16 are subject to tariff rates, ranging between 0% and 18.5% in year 5 (2022). By year 11 (2028), all products under HS code 16 will reach 0% tariff.

HS Code 17: Sugars and sugar confectionery

Applicable tariffs for products under HS code 17 ranges between 0% and 100% in year 5 (2022). By year 11 (2028), all products under HS code 17 will reach 0% tariff, except 1701.12.00B (raw beet sugar [out of WTO quota], not containing added flavouring or colouring matter), 1701.13.00B (raw cane sugar [out of WTO quota], not containing added flavouring or colouring matter), 1701.14.00B (other raw cane sugar [out of WTO quota], not containing added flavouring or colouring matter), 1701.91.00B (other cane or beet sugar [out of WTO quota] containing added flavouring or colouring matter), 1701.99.11B (other refined white sugar [out of WTO quota]), 1701.99.19B and 1701.99.90B (other refined sugar [out of WTO quota]).

• For 1701.12.00B, 1701.13.00B, and 1701.14.00B, the tariff in year 5 (2022) is 80% and this value will remain consistent in the future years.
• For 1701.91.00B, the tariff in year 5 (2022) is 100% and this value will remain consistent in the future years.
• For 1701.99.11B, 1701.99.19B, and 1701.99.90B, the tariff in year 5 (2022) is 85% and this value will remain consistent in the future years.

HS Code 18: Cocoa and cocoa preparations

In year 5 (2022), products in HS code 18 range are subject to tariffs between 0% and 5.7%. These products will reach 0% tariff between year 5 (2022) and year 8 (2025).

HS Code 19: Preparations of cereals, flour, starch or milk; pastrycooks' products

• Products under HS code 19.01 (Malt extract; food preparations of flour, groats, meal, starch or malt extract, not containing cocoa or containing less than 40% by weight of cocoa calculated on a totally defatted basis, not elsewhere specified or included; food preparations of goods of headings 04.01 to 04.04, not containing cocoa or containing less than 5% by weight of cocoa calculated on a totally defatted basis, not elsewhere specified or included) will reach 0% tariff in years 3-6 (2020-2023). In year 5 (2022), products under HS code 19.01 will reach tariffs in the range of 0% to 3.3%.
• Products under HS code 19.02 (Pasta, whether or not cooked or stuffed (with meat or other substances) or otherwise prepared, such as spaghetti, macaroni, noodles, lasagne, gnocchi, ravioli, cannelloni; couscous, whether or not prepared) will reach 0% tariff in years 6-8 (2023-2025). In year 5 (2022), products under HS code 19.02 are subject to tariffs in the range of 3.3% to 12.7%.
• Products under HS code 19.03 (Tapioca and substitutes therefor prepared from starch, in the form of flakes, grains, pearls, siftings or in similar forms), 19.04 (Prepared foods obtained by the swelling or roasting of cereals or cereal products (for example, corn flakes); cereals (other than maize (corn)), in grain form or in the form of flakes or other worked grains (except flour, groats and meal), pre-cooked or otherwise prepared, not elsewhere specified or included) and 19.05 (Bread, pastry, cakes, biscuits and other bakers' wares, whether or not containing cocoa; communion wafers, empty cachets of a kind suitable for pharmaceutical use, sealing wafers, rice paper and similar products) reached 0% tariff in year 4 (2021).

HS Code 20: Preparations of vegetables, fruit, nuts or other parts of plants

In year 5 (2022), tariff rates for products in HS code 20 ranges between 0% and 21.8%. Tariffs under this HS code are moving to 0% tariff between year 4 (2021) and year 11 (2028).

HS Code 21: Miscellaneous edible preparations

• Products under HS code 21-01 (Extracts, essences and concentrates, of coffee, tea or maté, and preparations with a basis of these products or with a basis of coffee, tea or maté; roasted chicory and other roasted coffee substitutes, and extracts, essences and concentrates thereof) will reach 0% tariff in year 6 (2023). In year 5 (2022), products under HS code 21.01 are subject to tariffs of 6.6%.
• Products under HS code 21.02 (Yeasts (active or inactive); other single cell micro-organisms, dead (but not including vaccines of heading 30.02); prepared baking powders) reached 0% tariff in year 1 (2018).
• Tariff rates on products under HS code 21.03 (Sauces and preparations therefor; mixed condiments and mixed seasonings; mustard flour and meal and prepared mustard) are being reduced to 0% in years 5 and 6 (2022 and 2023). In year 5 (2022), products under HS code 21.03 are subject to tariffs in the range of 0% to 5.6%.
• Products under HS code 21.04 (Soups and broths and preparations therefor; homogenised composite food preparations) will reach 0% tariff in year 6 (2023). In year 5 (2022), products under HS code 21.04 are subject to tariff of 6.6%.
• Products under HS code 21.05 (Ice cream and other edible ice, whether or not containing cocoa) reached 0% tariff in year 5 (2022).
• Products under HS code 21.06 (Food preparations not elsewhere specified or included) will reach 0% tariff in years 4-6 (2021-2023). In year 5 (2022), products under HS code 21.06 reached tariffs of 0% to 4.1%.

HS Code 22: Beverages, spirits and vinegar

Products under HS code 22 have, or will, reach 0% tariff in year 3 (2020), years 6-8 (2023-2025), years 11-12 (2028-2029). As of year, 5 (2022), products under HS code 22 are subject to tariffs in the range of 0% to 35%.

HS Code 23: Residues and waste from the food industries; prepared animal fodder

All products under HS code 23 reached 0% tariff in year 1 (2018).

HS Code 24: Tobacco and manufactured tobacco substitutes

Tariff Rate Quotas (TRQ) are applicable for all products under HS code 2401 (unmanufactured tobacco; tobacco refuse) between year 1 (2018) and year 20 (2037), with base rate ranging between 80% and 90%. From year 21 (2038) onwards, the applicable tariff rate for products under HS code 2401 would be 0%.

For all other products under HS code 2402 (cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes) and HS code 2403 (other manufactured tobacco and manufactured tobacco substitutes; “homogenised” or “reconstituted” tobacco; tobacco extracts and essences), the applicable tariffs in year 5 (2022) range between 20.6% and 92.8%. All products under HS code 2402 and 2403 will reach 0% tariff by year 16 (2033).

Rules of origin

The amount of production that must be undertaken on a product in Canada for the product to be considered originating and eligible for CPTPP’s preferential tariff treatment is determined by the Rules of Origin.

The proof of origin that is used to certify that the good meets the rules of origin is referred to as a certification of origin and consists of a set of minimum data requirements that are provided in annex 3-B of the origin procedures. The certification of origin may be placed on any document, including an invoice, and does not need to follow a prescribed format. Unlike Canada’s other free trade agreements in which the exporter completes the certification of origin, the CPTPP allows the importer, the exporter or the producer to choose to complete the certification of origin (without the need for verification by competent authorities). The parties are obligated to allow the certification of origin to be provided electronically and in no prescribed format, but it must contain the minimum data requirements set out in the origin procedures. The trader may also choose to complete a single certification of origin for multiple shipments of identical goods for a period of up to one year.

In general, goods qualify as originating if they are:

1. wholly obtained or produced entirely in the territory of one or more of the Parties as established in Article 3.3 (Wholly Obtained or Produced Goods);
2. produced entirely in the territory of one or more of the Parties, exclusively from originating materials; or
3. produced entirely in the territory of one or more of the Parties using non-originating materials provided the good satisfies all applicable requirements of Annex 3-D (Product-Specific Rules of Origin),

and the good satisfies all other applicable requirements of Chapter 3 – Rules of Origin and Origin Procedures

From an agriculture and agri-food products perspective, goods are considered to be wholly obtained or produced entirely in the territory of one or more of the Parties if, and only if, the goods are:

1. plants, or goods obtained from plants, that are grown, cultivated, harvested, picked or gathered in the territory of one or more of the Parties; or
2. live animals born and raised in the territory of one or more of the Parties; or
3. goods obtained from live animals in the territory of one or more of the Parties; or
4. animals obtained by hunting, trapping, fishing, gathering or capturing in the territory of one or more of the Parties; or
5. goods obtained from aquaculture conducted in the territory of one or more of the Parties; or
6. fish, shellfish or other marine life taken from the sea, seabed or subsoil beneath the seabed:
   1. outside the territories of the Parties; and
   2. in accordance with international law, outside the territorial sea of non-Parties; by vessels that are registered, listed or recorded with a Party and are entitled to fly the flag of that Party; or
7. goods produced, from goods referred to in paragraph (f), on board a factory ship that is registered, listed or recorded with a Party and is entitled to fly the flag of that Party; or
8. goods, other than fish, shellfish or other marine life, taken by a Party, or a person of a Party, from the seabed, or subsoil beneath the seabed, outside the territories of the Parties, and beyond areas over which non-Parties exercise jurisdiction, but only if that Party or person has the right to exploit that seabed or subsoil in accordance with international law; or
9. waste or scrap that:
   1. has been derived from production in the territory of one or more of the Parties; or
   2. has been derived from used goods that are collected in the territory of one or more of the Parties and that are fit only for the recovery of raw materials; or
10. goods produced in the territory of one or more of the Parties, exclusively from goods referred to in paragraphs (a) to (i) or from their derivatives.

In addition to the generic details shared above with regards to the Rules of Origin, there are certain product-specific rules and exceptions that are detailed below for agricultural and agri-food products.