The American market has become more accessible since the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) took effect.

However, geographic distance and language barriers still make many Vietnamese businesses hesitant to expand into this region.

Challenges remain despite improved access

The CPTPP, which officially took effect for Vietnam on January 14, 2019, has significantly boosted trade with American markets, particularly Canada, Mexico, and Peru.

According to Vu Duc Giang, Chairman of the Vietnam Textile and Apparel Association (VITAS), the Vietnamese textile industry previously faced significant challenges entering American markets. Thanks to the CPTPP, this entry has become much easier, with high growth rates in Canada and Mexico.

"We are gradually adapting to the American market. Previously, we never handled small orders, but now many factories produce up to 8 million shirts annually from small orders. Even industrially produced suits are now being manufactured in smaller quantities," Giang shared.

However, alongside opportunities come challenges. Giang highlighted concerns for businesses exporting to the American market, including strict compliance standards set by different brands, delayed payment risks (with some orders requiring up to 120 days for payment), and stringent sustainability requirements such as recycled and environmentally friendly products.

Vietnamese textile companies continue to negotiate with American buyers to mitigate these risks.

Leveraging CPTPP for market expansion

Phan Thi Thanh Xuan, Vice President and General Secretary of the Vietnam Leather, Footwear, and Handbag Association (LEFASO), noted that Vietnam’s leather and footwear industry has effectively capitalized on CPTPP opportunities.

Canada, traditionally a difficult market for Vietnamese footwear, has now opened up, with Canadian importers actively seeking direct suppliers from Vietnam. Over the past year, footwear exports to the Americas have surged, with Canada recording a 40% increase and Mexico 50%.

Despite these achievements, Xuan pointed out significant challenges for domestic footwear companies. The CPTPP imposes strict origin certification requirements, necessitating greater transparency in documentation, which not all businesses can meet.

Additionally, separate environmental and labor requirements from brands and government regulations mean companies must undergo multiple audits, adding to operational burdens.

Xuan emphasized that most small and medium-sized Vietnamese businesses have yet to take full advantage of CPTPP opportunities due to a lack of information and resources.

Vietnam's trade with the Americas remains modest

Geographic distance and language barriers have deterred many Vietnamese businesses from actively engaging with the American market, particularly in Latin America.

However, the region presents vast opportunities. By leveraging key gateway markets such as Canada and Peru, Vietnamese businesses can significantly diversify their exports.

According to the General Department of Customs, Vietnam's total trade with CPTPP countries in the Americas grew from $8.7 billion in 2018 to $13.6 billion in 2023, marking a 56.3% increase.

Deputy Minister of Industry and Trade Nguyen Hoang Long noted that while Vietnam’s trade relations with the Americas have strengthened through strategic commitments, much potential remains untapped. Vietnamese exports to the region still have low added value, and the country’s share in American import structures remains limited.

Ngo Chung Khanh, Deputy Director General of the Multilateral Trade Policy Department at the Ministry of Industry and Trade, added that trade with Canada, Mexico, and Peru currently accounts for only 2% of Vietnam's total import-export value, despite the vast market potential.

"As early as 2019, we recognized the need to seize CPTPP opportunities to enter the American market as soon as possible. However, Vietnamese businesses have not allocated sufficient resources to this market. Indonesia has now applied to join the CPTPP, which means Vietnam’s competitive edge in ASEAN will gradually diminish," Khanh remarked.

Vietnam was the seventh country to ratify the CPTPP. Under a rotational system, it will assume the role of CPTPP Council Chair in 2026.

"We already have key export products in the American market, but our market share remains modest. It is crucial to identify which industries require promotion, develop supportive policies, and address obstacles preventing businesses from expanding their reach," Khanh recommended.

Binh Minh