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Speech to British business community in Vietnam

Gareth Thomas MP,  Former Minister for Trade, Development and Consumer Affairs (jointly with DFID)
Hilton Hotel, Hanoi,  16 January 2009

Gareth Thomas MP, Parliamentary Under Secretary of State for Trade Policy

I visited Vietnam four years ago as a development Minister.

It is good to be back in Vietnam and to be able to celebrate Britain and Vietnam’s ever closer links.

Vietnam is a remarkable success story.

Vietnam, like the rest of the world, is having to deal with the global downturn, but its success in reducing the numbers in poverty from 70% to 20% - the fastest reduction in recorded history is testimony to the remarkable development of this country.

Vietnam’s success offers an important lesson for us with the difficult economic times we are now facing.

Vietnam has increasingly opened up its economy.

We have continued to provide aid and we’ll carry on doing so, but it is the growth of trade, the development of a private sector and the encouragement business to business trade which lies at the heart of Vietnam’s success.

With its 2007 accession to the WTO, and report after report from the likes of UNCTAD praising its progress, the expectation is that Vietnam will continue to deliver for its people, and by extension, business.

Today, I want to touch on three issues: The global slowdown; the continuing case for open markets; and the UK Vietnam bilateral business relationship.

The current challenges to the UK, and the global economy, are severe.

We are committed to an international policy response, for instance, coordinated action has already been taken to reduce interest rates.

We have been working too to champion fiscal stimulus packages to help stimulate demand.

And coordinated reform of the international financial institutions, the world’s economic governance, is also clearly needed to equip them for the 21st century.

We are committed to coordinated international action because no country is unaffected; no one country is going to be able to get through the global downturn on its own; and no one country is going to be able to protect itself at the expense of others.

So protectionism, new tariffs and taxes or new restrictions on international trade business are not the answer.

That’s why we are determined to use our G20 presidency to continue to push for a conclusion to the WTO Doha Development Round.

The benefits to the global economy are estimated at €120 billion annually.

Consumers will benefit - lower prices (especially of food), greater variety of products, and increased competition in the supply of goods and services.

We want too to accelerate EU-ASEAN talks too if a free trade agreement can be agreed.

If progress is slow at a regional level, perhaps we should first negotiate EU FTA agreements with those countries in the region who are ready now.

I have therefore been discussing with Vietnamese Ministers the options to ensure we are laying the foundations for an increase in EU ASEAN trade.

Indeed the UK now has a broad and fast maturing agenda with Vietnam spanning trade, development, justice and security.

This manifested itself last year during Prime Minister Dung’s visit to the UK.

With 90 million consumers, and retail sales up 20% year on year, the UK sees Vietnam as an exciting and vibrant market.

UK business interest in Vietnam is at unprecedented high levels and we are now the third largest EU investor.

And with over 5000 Vietnamese students in UK Universities, there is clearly an appetite for the UK in Vietnam.

In Vietnam, growth, stability and an improving business environment are the headlines.

Within the Embassy operation we have increased our resources here to offer more support to UK business through our staff in Hanoi and Ho Chi Minh City stepping up working with British business and the Vietnamese authorities to ensure a more successful commercial environment for both parties.

A tangible result of this collaboration is the opening of the first domestic branch of HSBC an outcome of our joint work on the issue of banking licences following your WTO accession when HSBC, together with Standard Chartered, became the first foreign banks to be awarded this local incorporation.

Another success for UKTI was that of International Power opening its representative office in Vietnam and signing an agreeement to develop a greenfield coal-fired power station in Binh Dinh province.

And I’m looking forward tomorrow to inaugurating Harvey Nash’s new facility for Research and Development in ICT.

This is a first and a real step forward for Vietnam moving beyond outsourcing and a sign of the UK's commitment to help Vietnam make that progress.

Retail too is a sector where UKTI has been instrumental in bringing household British names like Marks and Spencer, Boots and BHS to explore the possibilities Vietnam has to offer.

Next month we are bringing to Vietnam a delegation of UK companies in the Ports and Logistics Sector to participate in a series of events at the Maritime Vietnam Conference 2009 in Ho Chi Minh City.

There are a series of issues though where we want to help the government improve the business environment still further. Issues of transparency, the inadequacies of the existing physical infrastructure, and the recruitment and retention of highly skilled professional staff are for some barriers to doing business in Vietnam.

We keep a close eye on how Vietnam is complying with its own WTO accession timetable.

Despite all the other positives, corruption and intellectual property protection can also create negative perceptions among the international business community.

I know Vietnam is working to address these challenges in particular it has made very clear its determination to tackle instances of corruption.

We will continue to support Vietnam as it builds its own modern economy.

As well as Ministerial visits and the day to day work of our teams, we address UK Vietnam trade issues through an annual joint economic and trade committee, the second of these government to government meetings was held in London in December.

While still in its infancy, issues raised at these talks have been addressed by both Governments.

The banking licences issue was raised at those talks.

All spirits will now be treated equally.

We currently are asking Vietnam to make the process of obtaining a visa easier for businessmen.

We are also discussing issues of transparency of information.

During this visit am following up these issues with my Vietnamese counterparts.

This is a market that has much to offer and I for one will be encouraging our businesses to look closely at the opportunities that exist.

In conclusion Vietnam is a significant business partner for the UK.

Our two way trade continues to grow strongly, adding real value to both our economies.

The potential for more trade is considerable and we will work with the Vietnamese and the British and international business community Hanoi and Ho Chi Minh City in both our countries interest.

Thank you for coming.