Still Much Scope for Further Cooperation between Singapore and Vietnam

Bilateral cooperation between Singapore and Vietnam are excellent, characterised by robust and growing trade and investment ties, and supported by regular exchanges at all levels. Our leaders also share close personal ties cultivated through frequent high-level visits: Singapore Prime Minister Lee Hsien Loong visited Vietnam in September 2013 during which bilateral relations were elevated to a Strategic Partnership, while Speaker of Parliament Halimah Yacob visited Vietnam in April 2015. Vietnam Prime Minister Nguyen Tan Dung also visited Singapore twice in 2015, once in March for the State Funeral of Singapore’s founding Prime Minister Mr Lee Kuan Yew, and again in August to celebrate Singapore’s 50years of independence.

 

Economic cooperation between Singapore and Vietnam has grown from strength to strength. Singapore is currently Vietnam’s third largest foreign investor, with US$34.7 billion invested in more than 1,500 projects. In 2015 alone, two new Vietnam-Singapore Industrial Parks (VSIP) were established in Hai Duong and Nghe An provinces, bringing the total number of VSIPs across Vietnam to seven. These industrial parks have become a strong symbol of the close economic ties that our two countries share. Singapore companies are also actively involved in the real estate, manufacturing (including food processing and electronics components) and services sectors (such as port operations and logistics).

 

People-to-people ties have also flourished with greater connectivity, tourist and business links between Singapore and Vietnam. The establishment of the ASEAN Economic Community in December 2015 will also bring about more opportunities for economic cooperation and interactions between our two peoples, contributing significantly to regional growth and integration.

 

The ASEAN Economic Community (AEC) is a critical milestone in ASEAN’s efforts to establish an economic community. Through the AEC, ASEAN has progressively removed trade barriers to facilitate a free flow of goods, services, and investment. This will enhance market access between ASEAN Member States and raise regional competitiveness. Deepening regional economic integration will strengthen trade and investment flows between Singapore and Vietnam and the wider ASEAN region. For instance, the ASEAN Trade in Goods Agreement enables virtually all goods to flow throughout the region tariff-free. Other than the elimination of tariffs, AEC also focuses on removing non-trade barriers, which will further benefit businesses in Singapore and Vietnam. The AEC also brings greater harmonisation with respect to arbitration practices and competition laws, and facilitates trade between ASEAN Member States. The AEC will forge close ties between Singapore and Vietnam as our enterprises will have access to a wider network of business and increased standardisation will attract more investments from Singapore into Vietnam.

 

Apart from the greater trade and investment links within the region, the AEC will also encourage more foreign companies to look at the value proposition offered by ASEAN as a whole, and consider locating their operations and supply chains across ASEAN. For example, a multinational company could decide to set up their regional headquarters in Singapore, while locating their manufacturing plant in Vietnam to leverage on our respective competitive advantages. This creates complementary synergies between both countries. Furthermore, as Vietnam’s economy moves up the value chain, the integration of ASEAN through the AEC will present new opportunities for collaboration. In addition, under the ASEAN Framework Agreement on Services, businesses can enjoy a progressive reduction of services barriers, such as a lowering of barriers to foreign equity. This will improve both Singaporean and Vietnamese businesses’ market access to more services sectors.

 

Singapore and Vietnam are also members of the Trans-Pacific Partnership (TPP), a comprehensive, high standard free trade agreement that aims to advance regional integration amongst countries in the Asia-Pacific region and serve as a possible pathway to an eventual Free Trade Area of the Asia Pacific (FTAAP). TPP countries represent 40 per cent of global GDP, one-third of world trade, and comprise a population of 800 million, making the TPP the largest regional trade agreement to date. The conclusion of the TPP negotiations in October 2015 was a very significant milestone. The TPP will help businesses in Vietnam, Singapore, and other TPP countries better integrate into regional value chains, allowing them to garner a larger portion of regional trade and investment flows. It will also improve the efficiency of trade by putting in place transparent and effective procedures to trade across borders. This will lead to companies becoming more competitive. Beyond increasing market access in goods, the TPP updates rules in traditional areas, such as technical standards and sanitary and phytosanitary measures, services and investment. It also addresses emerging business challenges in a 21^st century economy by establishing enforceable disciplines to help the digital economy, innovative industries, companies, and workers to compete fairly in the global marketplace. The TPP holds much promise for all members, and we look forward to working with Vietnam towards the successful ratification of the TPP.

 

The AEC and TPP will provide many opportunities for workers across the participating countries. At the same time, increased opportunities within ASEAN and across the Asia-Pacific region will bring about increased competition. For the workforce of all member states, including Vietnam, to fully take advantage of the opportunities provided by the AEC and TPP, workers must continue to upgrade their skills. This will pave the way for higher wages as their productivity increases and as they move up the value chain with more job responsibilities. In particular, the TPP has a high-standard Labour chapter, including a comprehensive article on cooperation where TPP Parties can share good practices with each other and work together to raise labour standards in the TPP.

 

Singapore places great importance on human resource development and we have a long-standing cooperation with Vietnam to share our experiences and expertise with government officials and educators. This is done through the Singapore Cooperation Programme where regular courses are conducted in the Vietnam-Singapore Training Centre (VSTC) and in Singapore. To date, more than 15,000 Vietnamese officials have participated in our courses. The Government of Singapore also awards scholarships to outstanding Vietnamese students to study in Singapore. We encourage these students to return to Vietnam after their studies to contribute to Vietnam’s economy and become part of a modern, competent workforce in Vietnam.

 

There continues to be much scope for further cooperation between Singapore and Vietnam. As Vietnam continues to liberalise and develop its economy, there will be more opportunities for cooperation in a variety of areas, including urban management, info-communication, education, logistics, finance, hospitality and tourism. For example, Singapore can share our experiences in harnessing info-communication technology and innovative solutions to establish smart cities, which is an area Vietnam is interested in. We will also focus on the strengthening of people-to-people ties, so as to foster greater understanding between our two peoples.