Vietnam shrimp exports after the CPTPP took effect

( In the first four months of 2019, Vietnam shrimp export value reached US$848.4 million, down 16.7% compared to the same period of 2018. In the context of shrimp export declined, trade preferences in the Free Trade Agreements becomes quite important. The Comprehensive and Progressive Trans-Pacific Partnership Agreement (CPTPP) took effect from the beginning of 2019. In addition to the challenges posed, there have been some certain positive impacts on Vietnam shrimp exports to other countries.

On January 14, 2019, the Comprehensive and Progressive Trans-Pacific Partnership Agreement (CPTPP) was officially in force for Vietnam. The CPTPP Agreement consists of 11 members including Canada, Mexico, Peru, Chile, New Zealand, Australia, Japan, Singapore, Brunei, Malaysia and Vietnam.

CPTPP is said to have more marketable products and faster and easier time to reduce taxes. So after the CPTPP took effect, Vietnam shrimp export turnover to other markets such as Japan, Canada, Australia and Singapore has not changed much. However, it also recorded some positive changes.

Japan was the second largest shrimp importer of Vietnam in the first 4 months of 2019, accounting for 19.2% of the total export value of Vietnam shrimp to markets. In February and March of 2019, Japan was the only market among the major importers for Vietnamese shrimp that recorded positive growth. In April, shrimp exports to Japan decreased partly due to reduced demand in the context of economic growth showing signs of deceleration and unstable Japanese Yen. In the first four months of 2019, shrimp exports to Japan reached US$162.5 million, down 7.3% compared to the same period in 2018 while exports to EU, US, China and South Korea declined by 2 digits.

In addition to the Vietnam-Japan FTAs (VJEPA) and ASEAN - Japan (AJCEP), the CPTPP Agreement, that took effect from January 2019, also helps Vietnamese shrimp to increase their competitiveness in this market. According to Japan's commitments at CPTPP, most of Vietnam's main seafood products including frozen shrimp (HS 030617) and processed shrimp (HS 160521) are entitled to 0% tax rate right after the agreement took effect.

Canada ranked the 6th on Vietnam's shrimp imports, accounting for 4.4% of the total export value of Vietnamese shrimp to the markets. In the first four months of this year, Vietnam shrimp exports to Canada reached US$37.6 million, up 4.8% over the same period in 2018. Shrimp exports to Canada showed signs of increasing turnover after the CPTPP took effect earlier this year.

Among the countries participating in CPTPP, Canada is one of the countries with the highest market access commitments with thousands of tariff lines for imported goods returning to 0%; A tax cut of up to 95% tariff lines, covering 78% of Vietnam's total export turnover to Canada. Besides, Canada is one of three member countries that Vietnam has no bilateral trade agreement.

Under the CPTPP commitment, import duties on aquatic products, including frozen shrimp, processed shrimp ... from Vietnam to Canada all fell to 0% immediately after the Agreement came into effect.

CPTPP is also an opportunity for Vietnamese shrimp in the Canadian market as competitors such as India, Thailand and Indonesia do not join this agreement.

In recent years, Canada has consumed more warm water shrimp from Southeast Asian countries in the context of declining supply of cold water shrimp. Vietnam is the largest shrimp exporters to Canada, accounting for nearly one third of the market share of Canada’s shrimp imports. With this advantage, CPTPP shall be a leverage to help Vietnam shrimp compete better than other competitors in Canadian market.

Australia ranked seventh in Vietnam shrimp imports, accounting for 4.8% of Vietnam's total shrimp exports to markets. Under the commitment in CPTPP, all exported shrimp products to Australia shall reduce to 0% immediately after the Agreement comes into effect.

Chile is a small market. However, it is an open market for Vietnamese shrimp. According to Chile's commitment in CPTPP, seafood products including shrimp imported to Chile were reduced from 6% to 0% as soon as the Agreement came into effect.

In the first three months of 2019, Vietnam shrimp exports to Chile reached US$712.4 thousand, a sharp increase of 1,465% year on year (turnover in 2018 only reached US$45.5 thousand). Chile from the 60th position in the top importers of Vietnam shrimp rose to 46th position with the proportion increased  from 0.01% to 0.12%.

CPTPP sets out for enterprises the conditions of technical barriers, quality standards and rules of origin. Enterprises need to improve competitiveness, capture market information and barriers to promptly respond.

Thus, after the CPTPP took effect, its benefits for Vietnam shrimp export were not much. However, it is considered as necessary support factors to help improve the points that previous bilateral and multilateral agreements have not been available.


Ms Kim Thu


Tel: 84.24.3771.5055 (ext 203)

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