Brighter prospects for Vietnam-UK ties following Brexit

15:05 | 10/01/2019

As part of his recent visit to Vietnam, Mark Field, Minister of State for Asia and the Pacific at the Foreign & Commonwealth Office, discussed how the UK and Vietnam can boost business ties despite the UK’s upcoming split from the European Union.

brighter prospects for vietnam uk ties following brexit
Mark Field, Minister of State for Asia and the Pacific at the Foreign & Commonwealth Office

This is my third visit to Vietnam over the past 12 months, which involved meetings with the Vietnamese government as part of both country’s joint strategic partnership. First of all, I would like to say that our bilateral relations continue to go from strength to strength, despite hysteria over the UK leaving the European Union (Brexit).

Last year, our bilateral trade increased by 11 per cent to reach $6 billion. We are very keen to see the EU–Vietnam Free Trade Agreement (EVFTA) take effect, as we played the leading role in the deal. Ultimately, we also hope to see a similar trade agreement between our two countries, because businesses from both countries want free and open markets to operate in. We can start negotiations right away, even during the transition period of Brexit.

To us, Vietnam is a tremendous market with 95 million people, and you can feel the energy, enthusiasm and entrepreneurial spirit of the country. As representatives of the UK government in Asia, we will do what we can to help more businesses from our country see what this nation has to offer. It’s notable that in the past, British businesses tended to branch out to Vietnam from their regional bases in Singapore or Hong Kong. Over the next 10 years, what we hope for is lots of British companies entering the domestic market here directly and gaining that first-mover advantage.

One of the largest activities we have collaborated on with the British Embassy in Vietnam is the Prosperity Fund, which provides funding for projects on economic development, business environment, climate change, low carbon and energy security. One particular strand is smart cities, where we are trying to help Ho Chi Minh City get electronic ticketing on public highways and solve flooding issues in District 2. During the trip, I met with Ho Chi Minh City leaders and signed a memorandum of understanding for developing smart cities.

The second strand that we focus on is good corporate governance, which includes a broad range of issues including businesses’ compliance to the Vietnamese law and international standards. For this nation to fulfil its potential and attract foreign investors, it will need good corporate governance. For example, the country clearly needs borrowing to fund various infrastructure projects, and investors in capital markets should feel convinced that it has the right transparency answers. Also during the trip, I met with Vietnam’s State Securities Commission to discuss opportunities for UK businesses. The nation’s revised Law on Securities in 2019 will allow greater involvement for foreign businesses across various sectors. We also talked about green finance and capital markets development.

One sector that I want to touch on is insurance. I understand that UK insurers such as Prudential already have a presence here, but I still see tremendous opportunities ahead. As the country develops, wealthy people will need to invest and protect their assets. The welfare system in Asia as a whole will improve, but obviously more insurance-based activities are expected to meet these needs.

During the trip, I also joined KPMG Vietnam to launch the “Vietnam: Ready to Trade” initiative, which is designed to help facilitate trade activities between both our countries as well as other markets. Through this initiative, we want to address four pillars of challenges in trade, which are commercial, legal, customs, and tax issues to ensure access to each other’s markets for companies from both countries.

From all of my visits, people have been asking me which sector will benefit the most from the UK – Vietnam strategic partnership. Aside from the industries I mentioned above, fundamentally, the people to people connection is the single most important aspect. After all, people want to do long-term business with each other, and part of that connection is education. Overall, I am very excited about the prospects of the UK – Vietnam bilateral relationship, despite the talks surrounding Brexit. The strategic partnership enjoyed by the UK and Vietnam means we are able to continue to address a huge range of issues important to both our countries.

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