Dec 7, 2004
Freer market pact with Hanoi signed

By Azhar Ghani

HANOI - SINGAPORE and Vietnam yesterday signalled their desire to take bilateral ties to the next level.

One concrete step taken was the signing of a market access agreement that will make it easier for Singapore companies to enter the Vietnamese market.

Trade and Industry Minister Lim Hng Kiang and Vietnamese counterpart Truong Dinh Tuyen inked the pact, near the start of a two-day visit by Prime Minister Lee Hsien Loong.

Mr Lee, who is here as part of his introductory tour of Asean countries, witnessed the signing with Vietnamese PM Phan Van Khai.

The two earlier held talks followed by a delegation meeting lasting an hour and a half.

The bilateral market access agreement signed with Singapore signals Vietnam's readiness to become part of the World Trade Organisation (WTO).

Vietnam had applied for WTO membership in January 1995. The two countries began negotiations on bilateral market access the same year. They reached an agreement last month. The signing yesterday showed Singapore's support for Vietnam's entry into the WTO.

Earlier, during the delegation meeting, it is understood that one area that the Singapore side had proposed to look at under the freer market access is increasing air links between the two countries. Currently, there are 17 Singapore-Hanoi flights and 31 Singapore-Ho Chi Minh flights a week.

Yesterday's agreement can be expected to increase bilateral trade once it kicks in.

Last year, Vietnam was Singapore's 17th largest trade partner with total bilateral trade of almost $6 billion. Singapore imports mainly crude petroleum, spices, footwear and frozen seafood from Vietnam, and exports tobacco products, civil engineering equipment and data processing machines.

Later in the evening, at a dinner hosted by Mr Khai, Mr Lee reaffirmed Singapore's commitment to forging closer economic ties with his host country, one of Asean's newer members. He said: 'We hope to create more opportunities for Vietnam to grow. Vietnam can benefit from being plugged into the global economy through Singapore.

'For our part, Singapore can tap into the Vietnamese market and production capability to take ourselves to the next level.'

Underlying Singapore's 'prosper-thy-neighbour' approach to its bilateral ties with Vietnam, Mr Lee also told Mr Khai that Singapore wants to see Vietnam succeed even if it means being displaced as the country's biggest investor.

Singapore is Vietnam's largest foreign investor today, with a cumulative investment of about US$8 billion (S$13 billion) in projects, including an industrial park and training centre.

Said Mr Lee: 'We are very honoured to be Vietnam's largest foreign investor, but Singapore is a small country with limited resources. And what it hopes to be, is to be a catalyst for greater investment flowing into Vietnam.'

Mr Khai said: 'The candid talks we had this afternoon further reaffirmed the two countries' strong commitment to become long-term, stable and reliable partners.'

Besides economic ties, the two countries' delegations also discussed the situation in the South China Sea, where Vietnam is one of several parties with overlapping claims to the resource-rich Spratly islands.

Mr Lee is accompanied by Ms Ho Ching, Mr Lim, Foreign Affairs Minister George Yeo and officials.

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