Opportunities from CPTPP Agreement

LUONG Thi Ngoc Huyen and DANG Le Thanh Mai

Abstract

This study analyzes Vietnam’s coffee export competitiveness in Canada within the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) framework. Using indices such as Revealed Comparative Advantage (RCA), Market Share (MS), and Trade Specialization Index (TSI), the research evaluates Vietnam’s competitive position relative to other Canada’s key exporters, including Colombia, Brazil, Peru, and the United States. The findings reveal that while Vietnam has a comparative advantage in coffee exports, its RCA has declined over the past decade, reflecting increasing competition from Arabica-producing countries. However, the CPTPP offers tariff reductions and trade benefits, creating new opportunities for Vietnamese coffee exporters. Vietnam must enhance product quality, diversify offerings to align with Canadian consumer preferences and strengthen brand positioning to fully leverage these advantages. The study provides policy recommendations for the Vietnamese government, businesses, and farmers to improve export strategies, increase value-added production, and optimize market penetration in Canada.
   
Keywords: Vietnamese coffee, Canada, CPTPP, export competitiveness.

Résumé

Cette étude analyse la compétitivité des exportations de café du Vietnam au Canada dans le cadre de l’Accord global et progressiste de partenariat transpacifique (CPTPP). En utilisant des indices tels que l’avantage comparatif révélé (RCA), la part de marché (MS) et l’indice de spécialisation commerciale (TSI), la recherche évalue la position concurrentielle du Vietnam par rapport aux principaux exportateurs vers le Canada, notamment la Colombie, le Brésil, le Pérou et les États-Unis. Les résultats révèlent que, bien que le Vietnam bénéficie d’un avantage comparatif dans les exportations de café, son RCA a diminué au cours de la dernière décennie, reflétant une concurrence accrue des pays producteurs d’Arabica. Cependant, le CPTPP offre des réductions tarifaires et des avantages commerciaux, créant de nouvelles opportunités pour les exportateurs vietnamiens de café. Le Vietnam doit améliorer la qualité des produits, diversifier son offre pour s’aligner sur les préférences des consommateurs canadiens et renforcer son positionnement de marque afin de tirer pleinement parti de ces avantages. L’étude propose des recommandations politiques pour le gouvernement vietnamien, les entreprises et les producteurs afin d’améliorer les stratégies d’exportation, d’augmenter la production à valeur ajoutée et d’optimiser la pénétration du marché canadien.
  
Mots-clés: café vietnamien, Canada, CPTPP, compétitivité des exportations

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Coffee is one of Vietnams key agricultural export products, with a cultivation area exceeding 664,000 hectares, predominantly Robusta coffee, which accounts for 93% of the area, while the remainder is Arabica coffee.^[1] Notably, as of December 15, 2024, Vietnams coffee export revenue reached $5.2 billion, marking the second consecutive year surpassing the $5 billion threshold.^[2] Although Vietnams coffee cultivation area ranks only sixth in the world, its coffee yield is the highest globally, averaging 2.6 tons per hectare for Robusta coffee and 1.4 tons per hectare for Arabica coffee.^[3] During the 2021-2022 period, Vietnam ranked as the second-largest coffee producer globally with 1.8 million tons (following Brazil) and is the world’s largest Robusta producer.^[4] Additionally, the coffee industry has created jobs for over 600,000 Vietnamese households, equivalent to more than 2 million workers, significantly contributing to local economic development, particularly in regions like the Central Highlands, the Northwest, and other coffee-growing areas across Vietnam.^[5] Moreover, the quality of Vietnamese coffee is continually improving thanks to advancements in preliminary processing systems and modern processing technologies, meeting export standards and the stringent requirements of international partners. However, it must be acknowledged that most of Vietnam’s coffee is still exported in raw form, with low added value, leaving much of its potential untapped.

Canada is one of the largest coffee-consuming markets in the world, with coffee imports valued at over $1.9 billion in 2022 and more than $1.7 billion in 2023 (ITC Trade Map). According to statistics from the Coffee Association of Canada, coffee is more popular than tap water in Canada, with 71% of Canadians regularly drinking coffee compared to 67% for tap water^[6]. Additionally, the average consumption of coffee by Canadians between 2019 and 2023 was 2–3 cups per person per day^[7] placing Canada among the countries with the highest per capita coffee consumption in the world. Among coffee types, Arabica beans are favored by Canadians for their smoother and more nuanced flavors, as opposed to the stronger and more bitter taste of Robusta. With such high demand, Canada represents a promising market for coffee-exporting countries. However, competition is fierce, with leading coffee-producing nations like Colombia (38.2%), Brazil (21.4%), and Guatemala (12.9%) dominating a large share of the market.^[8] This makes it challenging for Vietnamese coffee to establish a foothold in this emerging market.

Therefore, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which came into effect in Vietnam on January 14, 2019, is expected to provide significant advantages for Vietnams exports, including the coffee industry, when exporting to Canada. The commitments under the CPTPP help reduce tariff barriers, creating more favorable conditions for Vietnamese goods to penetrate this market. Notably, flexible rules of origin and preferential trade terms open up opportunities to enhance the added value of Vietnamese coffee products. However, to fully capitalize on these advantages, Vietnamese enterprises need appropriate strategies to improve competitiveness, meet market demands, and establish the Vietnamese coffee brand on the global map.

However, currently very few research projects are interested in exporting Vietnamese coffee to the Canadian market, especially in the context of the CPTPP coming into effect. Based on the aforementioned reasons, this study will focus on analyzing the actual situation of Vietnams coffee exports to the Canadian market from 2013 to 2023. Additionally, the study will compare Vietnams coffee export volume with those of other major exporting countries to Canada, including Brazil, Colombia, Peru, and the United States. Furthermore, the study will propose specific solutions to help the coffee industry effectively leverage the advantages of the CPTPP, thereby enhancing the export performance of Vietnamese coffee in the Canadian market.

1. Literature Review

Based on David Ricardos theory of comparative advantage, Liesner proposed evaluating a country’s comparative advantage for a product through an analysis of its export turnover. Accordingly, the Revealed Comparative Advantage (RCA) index, developed from Balassa’s theory of comparative advantage, has become a widely used tool to assess a country’s export competitiveness in a specific product.^[9] Many studies have examined the competitiveness of the coffee industry in global trade. One of the most notable studies that can be mentioned is the comparative advantage and export efficiency of Indonesian and Vietnamese coffee in the U.S.^[10] market, revealing that Indonesia’s lower RCA value indicated less efficient export performance than Vietnam. In Vietnam, some studies found that Vietnamese coffee enjoys a significant trade advantage in the EU market^[11] while others compared Vietnams coffee export competitiveness with Brazil and Indonesia.^[12] Their findings showed that Vietnam had an average RCA of 5.608, ranking second only to Brazil, the world’s largest coffee exporter.

Beyond RCA, many studies also use the Trade Specialization Index (TSI) to reflect the degree of trade specialization and the export-import position of a country in a specific sector. Some scholars combined RCA and TSI to examine Indonesia’s trade specialization in coconut oil, concluding that the country holds a strong comparative advantage, with RCA values of 30.67 for crude coconut oil and 27.07 for coconut crude oil.^[13] Their findings also indicated that Indonesia is in the maturity stage of trade specialization, with a TSI of 0.94 for crude coconut oil and 0.99 for coconut crude oil. In Vietnam, the TSI index was applied to analyze Vietnamese coffee exports to Japan, showing that although Vietnams TSI remained high (ranging from 0.99 to 0.80 between 2017 and 2022), it exhibited a declining trend, indicating increasing challenges for Vietnamese coffee in the Japanese market.^[14]

In addition, the Market Share Index (MSI) is also commonly used to measure a country’s presence in the global export market of a particular product. Both RCA and MS indices were utilized to assess Vietnams yellowfin tuna export competitiveness compared to other tuna-harvesting countries in the South China Sea, including China, the Philippines, Thailand, and Indonesia.^[15] Their results indicated that Vietnam has weak competitiveness in this product category, suggesting that yellowfin tuna is not an area of comparative advantage for the country. Several other studies have also utilized a combination of RCA, MS, and TSI indices, confirming their effectiveness in evaluating export competitiveness.^[16]

2. Methodology

2.1. Collecting the Data

This study gathers and analyzes the following data sources:

1. Secondary data: Information on coffee export values and trade performance of Vietnam, along with other major coffee-exporting nations to the Canadian market, namely Colombia, Brazil, the United States, and Peru.
2. Statistical data: Official trade statistics related to coffee exports.

The dataset spans from 2013 to 2023 (a total of 10 years) to ensure statistical robustness. Data are sourced from credible institutions such as the World Integrated Trade Solution (WITS) under the United Nations Conference on Trade and Development (UNCTAD), and government bodies, private sector reports, academic publications, research papers, and also other scholarly sources.

2.2. Data Analysis

This study employs the Revealed Comparative Advantage (RCA) Index, the Market Share (MS) Index, and the Trade Competitiveness (TC) Index to assess the export performance of coffee from Vietnam, Colombia, Brazil, the United States, and Peru in the Canadian market. The analysis of secondary statistical data is structured as follows: (1) The RCA Index is used to measure Vietnams comparative advantage in coffee exports, (2) The MS Index examines the market share of coffee exports, and (3) The TC Index identifies whether a country primarily acts as an exporter or importer. This approach offers a comprehensive perspective on Vietnam’s position in the Canadian coffee market from 2013 to 2023.

2.2.1. Revealed Comparative Advantage (RCA)

This study utilizes a descriptive analysis approach to examine statistical data on coffee export values through the application of the RCA Index. Coffee export data is gathered for the period 2013 2023. Vietnams coffee exports are analyzed in comparison with those of Colombia, Brazil, the United States, and Peru, based on Balassa’s revealed comparative advantage theory. The RCA Index is calculated using the following formula:

Formula explanation:

• RCA_ijk = Revealed comparative advantage index of coffee exports from country i to market j
• X_ijk = The export value of coffee from country i to market j (measured in USD).
• X_ij = Total export value from country i to market j (measured in USD)
• X_wjk = Total global coffee export value to market j (measured in USD)
• X_wj = Total global export value to market j (measured in USD)
• k = Coffee product
• j = Canadian market

In equation (1):

• If RCA1, country i has a comparative advantage in coffee exports to market j.
• If RCA1, country i has a comparative disadvantage in coffee exports to market j.
• If RCA=1, country i has neither a comparative advantage nor disadvantage in exporting coffee to market j.

2.2.2. Market Share (MS)

The MS Index, introduced by Han and Kang (2009), measures the share of a country’s or region’s exports of a specific product relative to the total global export value of that product. This index serves as a direct indicator of the products competitiveness and objectively represents the country’s or region’s market share in the international trade landscape. The calculation of the index follows this formula:

Formula explanation:

• MSI_kin = The market share index of coffee exports from country i to market n
• X_kin = Total coffee export volume from country i to market n
• X_kn = Total coffee export volume to market n
• n = Canadian market

In equation (2):

• MSI=0: Country i does not export coffee to market n, it holds no market share in this market.
• 0MSI1: Country i exports coffee, but its share is small in the total global exports to market n. The countrys competitiveness in this market is low.
• MSI=1: Country i holds the entire market share for coffee exports to market n, meaning it has a monopoly on exporting this product to the market.

2.2.3. Trade Specialization Index (TSI)

The Trade Specialization Index (TSI), developed by UNCTAD (2013), is calculated by dividing net exports by the total trade value. Net exports are determined as the difference between total exports and total imports. This index is widely used to evaluate a country’s trade balance and serves as a key indicator of the role of international trade in the national economy. The TSI is computed using the following formula:

Formula explanation:

• TSI_ij = Trade specialization index of coffee in market j
• X_ij = Export value of coffee from country i to market j (USD)
• M_ij = Import value of coffee of country i from market j (USD)
• j = Canada

In equation (3), if the value TSI_ij is positive and falls between 0 and 1, the country tends to be a coffee exporter. Conversely, if TC_ij is negative and falls between 0 and -1, the country tends to be a coffee importer. Specifically:

• 0.8TSI_ij≤1 → Coffee exported from country i has a strong competitive advantage in the Canadian market.
• 0.5TSI_ij≤0.8 → Coffee exported from country i has a high competitive advantage in the Canadian market.
• 0TSI_ij≤0.5 → Coffee exported from country i has no significant competitive advantage in the Canadian market.
• TSI_ij0 → Country i tends to import more coffee from Canada than it exports → There is no export advantage.

2.3. Robustness checks

2.3.1. Revealed Symmetric Comparative Advantage (RSCA)

A significant limitation of the RCA index is its asymmetry. While comparative disadvantage is confined to a fixed range to [0, 1], comparative advantage ranges from one to infinity. This imbalance skews the data which grants disproportionate weight to values above 1.

This skewness poses problems for regression analysis, as it violates the critical assumption of normally distributed error terms (Laursen, 1998). To address this limitation, we adopt the method proposed by Dalum et al. (1998), which transforms the RCA index into the Revealed Symmetric Comparative Advantage (RSCA):

In equation (4), this resulting RSCA index is symmetric around zero and bounded within the range of [-1, 1], where positive values indicate an advantage and negative values indicate a disadvantage.

2.3.2. Comparative Difference-in-Differences Analysis (DiD Analysis)

In this study, the DiD model employed to assess the structural break effect of the CPTPP implementation on coffee exports to Canada in 2019. The analysis uses annual panel data for five key coffee-exporting nations (Vietnam, Peru, USA, Colombia and Brazil), spanning the period from 2013 to 2023. The groups and time periods are defined as follows:

• The treatment group consists of the CPTPP member countries: Vietnam and Peru.
• The control group consists of major non-member coffee competitors: the USA, Colombia, and Brazil.
• The “treatment event” is the implementation of the CPTPP, divided into two periods:
  • Pre-CPTPP Period: 2013 – 2018
  • Post-CPTPP Period: 2019 – 2023

Next, to quantify the impact, we use a standard DiD regression model. The “structural break” is measured by the coefficient on the interaction term:

Formula explanation:

• Export_it= The value of coffee exports for country i in year t
• β₀ (The Intercept): The baseline average export value for the control group (USA, Brazil, Colombia) in the Pre-CPTPP period (before 2019)
• β₁ (Coefficient for : The average baseline difference in exports between the treatment group (Vietnam, Peru) and the control group before 2019
• TREAT_GROUP_i= Dummy variable, equal to 1 for Vietnam and Peru, and 0 otherwise
• β₂ (Coefficient for ) = the “structural break” or average change in exports for the control group after 2019
• POST_CPTPP_t= time dummy, equal to 0 for the years before 2019 and 1 for the years from 2019 onward
• β₃ (Coefficient for ) = measures the additional structural break or average effect that the treatment group (Vietnam, Peru) experienced after 2019
• INTERACTION_it =TREAT_GROUP_i x POST_CPTPP_t. Its coefficient, β₃ captures the average structural break effect specifically for the CPTPP member countries after the agreement took effect.

3. Results and Discussion

3.1. Current Status of Vietnams Coffee Exports to Canada Market and Canadian Coffee-Consuming Trends

Although Vietnam is the world’s second-largest coffee exporter after Brazil (2021-2024)^[17] its exports to Canada in 2024 accounted for only 0.48% of total coffee export value (based on the authors calculation). Notably, Canada ranks among the top ten countries with the highest per capita coffee consumption globally, and coffee is deeply embedded in the country’s daily consumer culture.^[18]

Vietnamese coffees limited presence in Canada is not merely due to distance or brand issues but also the underuse of CPTPP preferences. As of now, only 18% of Vietnams exports to Canada use CPTPP tariff benefits^[19] while 81% still rely on MFN rates and less than 1% on GSP.

Ethical and sustainable consumption is essential for Canadian consumers. A 2023 Fairtrade Canada survey found that 85% trust certifications like Fairtrade, and 80% believe they enhance brand perception.^[20] However, most Vietnamese coffee, especially Robusta, lacks certifications for fair trade, organic farming, or traceability. This limits its access to Canadas premium market segments.

Differences in consumer preferences also pose a major challenge. Canadian consumers prefer Arabica for its light, smooth taste and pay attention to bean type, roast, and brewing method^[21] In contrast, Vietnamese Robusta is strong and high in caffeine, often perceived as too heavy. However, with Arabica prices rising due to climate change.^[22] Robusta is gaining attention as a cost‑effective and resilient alternative.^[23] This presents a long-term opportunity for Vietnam—if producers adapt Robusta products to meet Canadian taste and quality expectations.

3.2. Product Segmentation and Canadas Demand

It is evident that the Canadian coffee market is not monolithic. Although boasting high per capita consumption (averaging 2.7 cups/day)^[24] and a significant market value (approx. 18 billion USD)^[25], demand is clearly divided into two primary segments, the mass market and the premium one.

The mass market is dominated by the at-home consumption habit (70-80% of Canadians drink coffee at home).^[26] Consumers in this segment primarily prefer traditional, plain brewed coffee (50%) and value convenience.^[27] This is shown by the popularity of ground coffee (chosen by ~50% of consumers) and the increasing use of home coffee machines, especially those using capsules or pods.^[28] The main purchasing channel is supermarkets (75%), and consumers tend to be loyal to major brands like Tim Hortons and Starbucks (75% market share).^[29] Instant coffee also holds a small but present market share (~5%).^[30] This segment, focused on convenience and price, represents a suitable market for Robusta used in blends and instant products.

In parallel, there is strong growth in the premium coffee segment. Canadian consumers are increasingly knowledgeable, focusing on health, high bean quality, flavor, and especially sustainability (including organic and ethical certifications) and origin traceability (farming and roasting processes). They show a preference for single-origin coffees (instead of blends), lighter roasts, and manual brewing methods or novel styles like cold-brew. Consumers in this segment are willing to pay a higher price for quality and unique experiences. This segment is the ideal market for high-quality Arabica and specialty coffees.^[31]

This clear segmentation indicates that business recommendations must be tailored: focusing on value-addition for Robusta to serve the at-home mass market, and promoting high-quality, traceable Arabica to meet the demands of the premium segment.

3.3. Opportunities and Challenges from the CPTPP for Vietnams Exports to Canada

3.3.1. Opportunities

The CPTPP has brought significant benefits to Vietnams agricultural exports to Canada market.

First, in terms of tariffs, since the CPTPP came into effect on December 29, 2018, Canada has immediately eliminated approximately 94.9 percent of tariff lines for goods originating from CPTPP member countries, and the remaining tariffs are scheduled to be gradually eliminated according to a specific roadmap.^[32] For instance, coffee received duty-free access immediately, while products like cashews and rice followed within 1–3 years.^[33] However, certain sensitive products such as eggs, poultry, and fresh milk are subject to tariff-rate quotas^[34] with steep tariffs (168–300%) for volumes exceeding quotas.^[35] With these tariff preferences, Vietnamese exporters can offer more competitive prices compared to non-CPTPP competitors.

Second, the CPTPP facilitates customs simplification through Article 3.20, which allows self-certification of origin, replacing traditional certificates issued by authorities.^[36] Normally, in Vietnam, obtaining a certificate of origin via the National Public Service Portal takes 8–24 hours depending on the submission method.^[37] This procedural simplification reduces time and cost, enabling exporters to prepare documentation more proactively. Goods still require compliance and inspection by the importing country’s customs authority (e.g., CBSA in Canada). Additionally, Article 3.2(c) and Annex 3-C introduce the “de minimis”, allowing products with up to 10% of the FOB value or weight, depending on the sector.^[38] Most Vietnamese agricultural goods benefit from this, except for sensitive items like dairy, poultry, and cereals. Coffee, not subject to product-specific rules (PSR), qualifies for “de minimis” benefiting Vietnams exports, especially instant or ready-to-drink coffee containing additives. This flexibility supports broader input sourcing as long as the threshold is respected.

Under Article 5.10, CPTPP members must allow electronic pre-arrival submission of HS codes, origin, and customs valuation, and release goods within 48 hours upon receiving complete, compliant documents. Clearance should occur at the arrival point unless customs laws require otherwise.^[39] Perishable or urgent shipments are eligible for expedited clearance. In Vietnam, the VNACCS/VCIS system enables electronic declarations and automated processing, minimizing paperwork and avoiding in-person customs visit.^[40] Exporters can submit documents early, accelerating clearance for complex or large shipments. In Canada, CBSA allows declarations up to 90 days before arrival via EDI or CARM, along with digital invoices, bills of lading, and certificates of origin.^[41] This pre-screening process speeds up customs procedures, reduces delays at ports, and lowers warehousing costs for importers.

Third, the CPTPP improves exporter readiness by requiring members to notify partners of new SPS and TBT measures. Chapter 7 mandates alignment with Codex, OIE, and IPPC standards and ensures transparent inspection procedures to prevent hidden trade barriers.^[42] Similarly, Chapter 8 encourages TBT standards based on international norms (ISO, IEC) and requires mutual recognition of certifications from credible bodies.^[43] For instance, Canada must accept ISO-certified Vietnamese products without redundant testing, saving time and costs. While farmers are not directly involved, they benefit from contract farming and technical support. Coffee, being a nonperishable dry good, faces minimal SPS/TBT obstacles in Canada and only needs to comply with general requirements under the Food and Drugs Act and the Consumer Packaging and Labelling Act. No special licenses are required, making market entry easier.

In conclusion, the CPTPP presents valuable opportunities for Vietnam to deepen its access to member markets, particularly those without pre-existing free trade agreements with Vietnam, such as Canada.

3.3.2. Challenges

However, CPTPP also presents significant challenges. First, regarding certification of origin and traceability, while Canada accepts the self-certification mechanism instead of requiring a certificate of origin issued by authorized agencies, exporters must strictly comply with the rules of origin (ROO) specified in Annex 3-D.^[44] Failure to fully understand or correctly apply the ROO (such as not meeting the regional value content threshold or failing to fulfill specific PSR requirements) may result in the goods being ineligible for CPTPP tariff preferences. Moreover, if the Canadian customs authorities doubt the validity of the self-certification of origin documents, the shipment may be subjected to additional evidence requirements, physical inspections, or even be held for verification. This situation can disrupt supply chains and increase warehousing costs, negatively impacting the exporters cash flow and credibility.

Second, Canada imposes strict SPS and TBT standards for goods to qualify under CPTPP. Under Part 4 of the SFCR, imports must be licensed and comply with preventive control plans, including limits on pesticide residues, hygiene checks, and batch-level traceability.^[45] Many Vietnamese smallholders lack proper records, making compliance difficult.^[46] Additionally, Canadas MRLs are stricter than Codex standards^[47] encouraging costly organic or high-tech farming. Non-compliance can lead to shipment rejection or lost contracts. On the TBT side, Canadian law requires bilingual labels, full product details, and safe packaging in line with SFCR and the Food and Drugs Act.^[48] Exporters must also implement digital traceability systems. These requirements pose challenges for SMEs, who must invest in labeling, packaging, and testing. Mistakes in labeling or documentation may result in customs delays, re-labeling, or additional costs.

Third, regarding customs procedures, Canadas Pre-Arrival Review System (PARS) allows importers to submit customs data in advance^[49] While Vietnamese exporters dont deal directly with CBSA, they must provide accurate documents and coordinate with Canadian partners using systems like EDI or CARM. These systems require expertise in HS codes and customs regulations. Poor preparation can lead to incorrect declarations, shipment delays, and increased storage costs. If origin documents are invalid, CPTPP tariff preferences may be denied, forcing exporters to pay MFN tariffs and suffer financial losses.

3.4. Results of RCA, RSCA, MSI and TSI Indexes

3.4.1. RCA & RSCA Index

From 2013 to 2023, Vietnams average RCA for coffee was 1.34, indicating a comparative advantage in exporting to Canada. However, this advantage declined steadily. RCA fell from 2.99 in 2013 to 1.67 in 2015 and dropped below 1 from 2018 onward (0.94 in 2018, 0.65 in 2020), signaling weakening competitiveness. Compared to top exporters to Canada, Vietnams RCA is modest. Colombia holds the strongest position, with an average RCA of 94.93, followed by Brazil (12.08) and Peru (7.77). The U.S., despite being Canada largest coffee supplier with $541 million in exports in 2023, has the lowest RCA (0.67) and lacks a comparative advantage due to its role as a major importer. In 2023 alone, the U.S. imported $580 million worth of coffee from Canada, more than its exports. This comparison highlights Vietnam fading edge in a highly competitive market, especially when contrasted with major players like Colombia and Brazil.^[50]

Table 1. The RCA Index of Coffee Product Exporting from Vietnam and The Top 4 Coffee Export Countries to Canada between 2013 and 2023^[51]

Year	The RCA index of coffee product export
	Vietnam	USA	Colombia	Brazil	Peru
2013	2.99	0.90	80.57	11.76	3.85
2014	2.66	0.80	86.05	16.35	4.93
2015	1.67	0.78	95.10	17.14	5.78
2016	1.28	0.75	100.52	15.35	7.50
2017	1.19	0.64	102.16	13.33	11.55
2018	0.94	0.68	96.23	12.15	17.83
2019	0.80	0.62	113.92	12.28	6.57
2020	0.65	0.58	109.99	7.87	5.94
2021	0.72	0.50	93.98	8.50	5.51
2022	0.97	0.50	77.68	10.32	9.66
2023	0.83	0.61	88.01	7.85	6.35
Average	1.34	0.67	94.93	12.08	7.77

Vietnam lower RCA compared to South American countries stems from exporting mostly Robusta, while Canada prefers Arabica for its smoother taste. Colombia, Brazil, and Peru, key Arabica exporters, thus hold an edge. Despite CPTPP tariff benefits, Vietnam faces higher shipping costs and longer transit times, affecting coffee quality. Colombia gains further advantage from the Canada-Colombia FTA, which grants its coffee zero-tariff access to the Canadian market.

Table 1 presents the traditional RCA index, while Table 2 provides the symmetrically transformed RSCA index. The RSCA calculation serves as a crucial robustness check, correcting the known statistical asymmetry of the RCA to ensure the reliability of the observed trends.

Table 2. The RSCA Index of Coffee Product Exporting from Vietnam and the Top 4 Coffee Export Countries to Canada between 2013 and 2023^[52]

Year	The RSCA index of coffee product export
	Vietnam	USA	Colombia	Brazil	Peru
2013	0.5	-0,05	0,98	0,84	0,59
2014	0.45	-0,11	0,98	0,88	0,66
2015	0.25	-0,12	0,98	0,89	0,71
2016	0.12	-0,14	0,98	0,88	0,76
2017	0.09	-0,22	0,98	0,86	0,84
2018	-0.03	-0,19	0,98	0,85	0,89
2019	-0.1	-0,23	0,98	0,85	0,74
2020	-0.21	-0,27	0,98	0,77	0,71
2021	-0.16	-0,33	0,98	0,79	0,69
2022	-0.02	-0,33	0,97	0,82	0,81
2023	-0.09	-0,24	0,98	0,77	0,73
Average	0.07	-0.20	0.98	0.84	0.74

The findings are confirmed to be robust across all five nations. The trends observed in the RCA index (Table 1) are precisely mirrored in the RSCA index (Table 2), including the stable advantages of Colombia and Brazil, the consistent disadvantage of the USA, and Vietnam’s clear decline from an advantage to a disadvantage after 2018. This consistency validates that the results are not a statistical artifact of the RCA’s asymmetry.

3.4.2. MSI Index

Table 2 shows coffee-exporting countries market share in Canada from 2013 to 2023. The U.S. remained the largest exporter, averaging 34.62%, but its share declined from 47.40% in 2013 to 30.58% in 2023. Colombia expanded steadily, peaking at 20.02% in 2021 before slightly falling to 16.30% in 2023. Brazil’s share stayed stable, averaging 10.78%. Peru had the smallest share but grew rapidly, from 2.51% in 2013 to 5.46% in 2022. Vietnam, with the lowest average share (1.23%), showed signs of improvement, rebounding from 0.85% in 2018 to 1.69% in 2022. These shifts highlight increasing competition and evolving trade patterns, as Colombia and Vietnam gain ground while the U.S. loses dominance.

Table 3. The MS Index of Coffee Product Exporting from Vietnam and the Top 4 Coffee Export Countries to Canada
between 2013 and 2023^[53]

Year	The MS index of coffee product export
	Vietnam	USA	Colombia	Brazil	Peru
2013	1.35	47.40	11.80	9.04	2.51
2014	1.48	43.73	15.09	11.15	2.94
2015	1.28	41.98	14.82	12.06	3.54
2016	1.20	39.32	14.95	11.19	3.48
2017	1.08	33.29	17.98	11.27	3.72
2018	0.85	34.95	16.78	11.22	4.26
2019	0.93	31.65	15.84	11.13	3.95
2020	0.99	28.77	17.31	9.60	4.04
2021	1.16	24.54	20.02	10.40	3.58
2022	1.69	24.56	19.76	11.88	5.46
2023	1.48	30.58	16.30	9.63	3.99
Average	1.23	34.62	16.42	10.78	3.77

3.4.3. TSI Index

Table 3 presents the Trade Specialization Index (TSI) for coffee exports to Canada. Vietnam shows a strong export orientation, with an average TSI of 0.98, indicating minimal coffee imports from Canada. Though slightly lower in some years (0.93 in 2017 and 2020), Vietnam maintains a high specialization level. Colombia, Brazil, and Peru consistently recorded a TSI of 1.00, confirming their exclusive role as coffee exporters to Canada. Their TSI stability highlights their dominance and long-standing export tradition. In contrast, the U.S. has a negative average TSI (-0.01), reflecting its dual role as both importer and exporter. The declining trend (-0.02 in 2016, -0.14 in 2022) signals growing U.S. imports of Canadian coffee. In summary, while Vietnam and South American countries are highly specialized exporters, the U.S. stands out as the only country in the group with significant two-way coffee trade with Canada.

Table 4. The TSI Index of Coffee Product Exporting from Vietnam and the Top 4 Coffee Export Countries to Canada
between 2013 and 2023^[54]

Year	The TSI index of coffee product export
	Vietnam	USA	Colombia	Brazil	Peru
2013	1.00	0.17	1.00	1.00	1.00
2014	1.00	0.19	1.00	1.00	1.00
2015	1.00	0.09	1.00	1.00	1.00
2016	1.00	-0.02	1.00	1.00	1.00
2017	0.93	-0.12	1.00	1.00	1.00
2018	0.95	-0.01	1.00	1.00	1.00
2019	0.97	-0.04	1.00	1.00	1.00
2020	0.93	-0.05	1.00	1.00	1.00
2021	1.00	-0.12	1.00	1.00	1.00
2022	0.96	-0.14	1.00	1.00	1.00
2023	1.00	-0.04	1.00	1.00	1.00
Average	0.98	-0.01	1.00	1.00	1.00

3.4.4. Results of DiD Analysis

The regression results show a coefficient of 4811831,87 for the INTERACTION variable; however, this result is associated with a P-value of 0.94. This P-value is far above the conventional significance thresholds (e.g., 0.05 or 0.10). Therefore, we must conclude that the model finds no statistically significant evidence of a structural break. In other words, the analysis does not support the hypothesis that CPTPP created an immediate, differential shock (positive or negative) on the coffee export values of its member countries compared to non-members.

This lack of a sudden impact is a critical finding and is entirely logical. The primary mechanism for an immediate FTA shock (e.g., tariff reduction) was absent, as MFN tariffs on coffee were already zero. This result strongly suggests that any true benefits from the CPTPP are not derived from tariff shocks, but must instead come from the slower, more gradual implementation of non-tariff barrier reductions and trade facilitation measures.

4. Conclusion

First, Colombia, despite the highest RCA (94.93) and strong export position (TSI = 1), lags behind the U.S. in market share due to USMCA ties.^[56] Its focus on green coffee (86%)^[57] also misaligns with Canadas rising demand for processed products.^[58]

Second, Peru is a major exporter of organic Arabica coffee^[59] yet its RCA and MSI in Canada remain low (7.77 and 3.7%, respectively), suggesting it may not have fully capitalized on CPTPP benefits to boost its exports to this market.

Third, Brazil, despite holding the second-highest RCA (12.08) and strong export competitiveness, experienced a decline in its Canadian market share from 2020 to 2023. This was mainly due to El Niño and low stock levels^[60] which also pushed Arabica prices up by 70% by late 2023. As a result, importers have increasingly turned to the more affordable Robusta coffee.^[61] Consequently, importers increasingly shifted toward the more affordable Robusta coffee.

Vietnam, known for its Robusta coffee, has effectively expanded its market share in Canada. Among major exporters, only Vietnam and Peru are CPTPP members, while Colombia and the U.S. have bilateral FTAs with Canada, and Brazil is still negotiating through Mercosur^[62] Although CPTPP tariff preferences may not differ significantly from Canadas other FTAs, Vietnams strategic use of the agreement has led to a 220% increase in coffee exports to Canada by 2023^[63] compared to the pre-CPTPP period.

5. Recommendations

Vietnam has significant opportunities to expand its coffee exports to Canada, particularly as the CPTPP offers substantial tariff reductions and improved trade conditions. However, to fully capitalize on these advantages, Vietnam must adopt a phased roadmap involving the government, businesses, and farmers. The following short-, medium-, and long-term actions are proposed, each with designated lead actors and indicative priorities.

5.1. Short-term (within 5 years): Focusing on Building Readiness and Achieving Quick Wins

In the short term, lead actors include Ministry of Industry and Trade (MOIT), Ministry of Agriculture and Rural Development (MARD), Vietnam Coffee-Cocoa Association (VICOFA), and provincial authorities.

No	Priority Action	Responsible Agency	Timeframe	Expected Output
1	Establish CPTPP Support Desks in Dak Lak, Lam Dong, and Gia Lai to advise exporters on tariff preferences and rules of origin	MOIT, VICOFA	2025-2027	CPTPP utilization rate rises from 18% to more than 40%
2	Publish a bilingual handbook “Exporting coffee to Canada under CPTPP” to guide small and medium enterprises in this field	MOIT, MARD	2025-2026	Increased awareness of CPTPP procedures
3	Launch pilot digital traceability systems (QR-based farm logs) in cooperatives	MARD, local authorities	2025-2028	Traceability compliance for more than 10% of exported coffee
4	Promote certified Vietnamese coffee on e-commerce platforms (Amazon, Alibaba)	MOIT, VICOFA, enterprises	2025-2029	Improved Vietnamese coffee brand recognition and export visibility

5.2. Medium-term (5-10 years): Focusing on Enhancing Competitiveness and Quality Standards

In the medium term, lead actors involved consist of MARD, MOIT, Ministry of Science and Technology (MOST), Vietnam Chamber of Commerce and Industry (VCCI), major coffee exporters.

No	Priority Action	Responsible Agency	Timeframe	Expected Output
1	Develop a National Coffee Quality Standard harmonized with EU and Canadian SPS/TBT requirements.	MARD, MOST	2030-2034	Unified standard reducing compliance costs when exporting to competitive markets
2	Expand organic and Fairtrade-certified cultivation areas by 20%	MARD, provincial authorities, farmers	2030-2035	Organic/Fairtrade area increases from nearly 60,000 ha to ≥72,000 ha
3	Support SMEs to adopt eco-friendly packaging and bilingual labeling	MOIT, VCCI, businesses	2030-2035	More than 100 enterprises receive packaging grants or certification support; 100% of exported coffee products are labeled bilingually
4	Negotiate mutual recognition of certifications (food safety, labeling) with Canadian agencies	MOIT	2031-2034	Bilateral MRA on labeling and safety concluded; customs clearance time reduced by ≥25%

5.3. Long-term (10+ years): Focusing on Value Chain Transformation and Brand Positioning

In the long run, lead actors include Government of Vietnam, VICOFA, research institutes, farmer cooperatives, and private investors.

No	Priority Action	Responsible Agency	Timeframe	Expected Output
1	Establish a Vietnam-Canada Coffee Innovation Partnership for R&D in specialty and climate-resilient coffee.	MARD, MOST, Canadian partners	2035-2045	≥5 joint R&D projects funded; ≥3 new product lines (e.g., low-carbon or specialty Robusta) launched
2	Set up a Vietnamese Coffee Promotion Office in Toronto to coordinate branding and trade missions.	MOIT, VICOFA	2035-2040	1 permanent office established; ≥5 trade promotion events held annually; market share of Vietnamese coffee in Canada ≥5% by 2040
3	Institutionalize the four-party linkage model (government–enterprise–scientist–farmer) nationwide.	MARD, VICOFA, universities	2035-2045	≥70% of coffee area under cooperative or contract farming; export value grows ≥50% vs 2024 baseline

These recommendations ensure both strategic continuity and implementation feasibility. While the short-term actions create immediate trade gains, the medium-term reforms strengthen competitiveness, and the long-term initiatives secure Vietnam’s sustainable and branded presence in the Canadian coffee market.

5.4. Recommendations for Vietnamese Farmers

Farmers play a foundational role in the coffee value chain, serving as the key determinant of raw material quality, which directly affects the competitiveness of Vietnamese coffee in international markets. Therefore, to fully benefit from the CPTPP and meet increasingly stringent quality standards in Canada, it is essential to strengthen farmers production capacity, awareness, and organizational skills.

To begin with, instead of following fragmented cultivation practices tailored to each export market, farmers should be guided and encouraged to adopt a unified set of international quality standards, using the EU market as a benchmark. The EU has among the strictest requirements for quality and food safety; thus, meeting EU standards would enable products to access the Canadian market and other high-standard markets without the need for additional adjustments to production processes.

Alongside standardized farming practices, farmers should receive technical training on sustainable production methods. This includes the use of organic fertilizers, biological pest control, proper harvesting techniques, and processing methods appropriate to different coffee types. Local authorities, in collaboration with businesses and universities, could organize regular training sessions and issue certifications such as Organic or UTZ Certified to improve farmers’ qualifications and their access to export markets. In addition, farmers should be equipped with the knowledge and tools to maintain electronic production logs, which are crucial for building traceability systems for each shipment.

Moreover, the development of cooperatives or farmer groups closely linked with export companies is vital. Cooperatives allow farmers to share investment costs for pre-processing infrastructure such as drying yards, milling machines, and standardized storage facilities while also enhancing their bargaining power and access to market information. Contract farming arrangements between enterprises and cooperatives can further ensure stable market access for farmers, reducing dependence on intermediary traders who often pose risks in pricing and quality. The “four-party” linkage model including government, scientists, enterprises, and farmers, should be concretely implemented in major growing areas like Cau Dat (Lam Dong), Krong Nang (Dak Lak), or Ia Grai (Gia Lai) to build a complete and transparent coffee value chain that meets the high standards of markets like Canada.

In summary, farmers should not be viewed merely as raw material suppliers but as a crucial link in the global supply chain. Only when farmers are equipped with the necessary knowledge, skills, and organizational support can they produce coffee that meets international standards, enabling Vietnam’s coffee sector to enhance its position in the Canadian market and make full use of the benefits offered by free trade agreements, particularly the CPTPP, in the long run.

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