UK Foreign Secretary: “Vietnam is, and will continue to be, an important trading partner for the UK”

UK Foreign Secretary David Miliband has attended exchanges with and answered lots of questions from Vietnamese public through an online forum on the Yoosk website at www.yoosk.vn/ukvn.

 

David Miliband emphasised the need to maintain global trade and free markets and stated that “Vietnam is, and will continue to be, an important trading partner for the UK”.

 

The project has generated a good deal of interest amongst the Vietnamese Press and public, and already more than 15,000 people have paid almost 20,000 visits to the site and posted in excess of 100 questions.

British Ambassador Mark Kent says, "Reaching out to the whole of society and promoting people to people contacts is a key element of British diplomacy. Foreign Secretary David Miliband has participated actively in our exciting agenda with Vietnam. First he and Sir Alex Ferguson sent a Tet Video message and now he has taken part in the Yoosk project. A great start to the year!"

 

 

UK’s attention to Vietnam has actively changed in recent years, especially in the last year. Why has the UK paid such special attention quickly?
The UK has a strong bilateral relationship with Vietnam: over 5,000 Vietnamese students study in the UK each year, our trade and investment relationship is going from strength to strength, and Vietnam is a key partner on the UN Security Council. 

 

The Partnership for Progress, signed during the visit of Prime Minister Dung in early 2008, provides an excellent framework for co-operation. The joint UK/Vietnam Vision Paper signed earlier this year is a great example of how our two governments are working together to progress areas of mutual interest like trade and investment, the fight against organised crime and combating illegal immigration. 

 

Vietnam has taken on the role of lead co-ordinator for the Free Trade Agreement between ASEAN and the EU. I know progress to date has been slower than hoped. But Trade Ministers on both sides are working for an agreement that will enhance economic relations and stimulate trade and investment between our two regions.

 

For further information, you may wish to visit the EU websites (http://ec.europa.eu) and ASEAN website (www.aseansec.org).

 

Many of us around the world are affected by the global financial crisis. But this is no time to retreat into nationalism and protectionism. The UK is a staunch supporter of fair global trade and free markets. Both the UK and Vietnam depend on trade for our prosperity, so we have a shared interest in fighting any protectionist tendencies. It is important that we follow these principles in order for us to get through the current crisis and emerge ready to prosper again. 

 

One way to ensure this happens is to maintain and deepen economic ties between the UK and emerging markets, such as Vietnam. Vietnam is, and will continue to be, an important trading partner for the UK. UK Trade and Industry do great work on promoting bilateral trade, for more information on this, see their website, www.uktradeinvest.co.uk..

 

By and large, I am a dollar bull over the long term. America is the only major economic power with a healthy demographic structure, as well as the strategic and scientific depth to maintain leadership. A lot of people were caught off guard by the dollar rally in H2 of last year. They will be caught off guard a second time when the euro gets into very serious "existential" trouble.

Gold will do well when it becomes clear that a) the US intends to inflate its way out of this crisis b) that the euro is not a viable alternative. Indeed, the eurozone is a dysfunctional monetary union. It was created for political reasons, ignoring the warnings of their own economists. It is already causing real suffering in Spain, Ireland and other countries - which cannot take offsetting action to buffer a severe "asymmetric" shock.

 

I am afraid I know little about Vietnam. Broadly speaking, I think it is a mistake for countries to hold down their currency to boost exports. This works for a while, but ultimately creates huge problems - inflation "blow-back" because the central bank cannot sterilize the stimulus, over-dependence on exports, and excess investment.

The Anglo-Saxon countries went to the other extreme, spending too much and investing too little. That is no good either. There is a happy medium between the two. It is too late for Asia's exporters to avoid the errors of the last cycle. They can only try to pursue a more balanced strategy in the next cycle.

Vietnam seems to be a special case because it has a current account deficit, so perhaps what I said does not really apply to your country.

It is very hard to lessen the impact once a boom has been allowed to occur, and then turns to bust. I think monetary policy is the best tool. I am suspicious of very aggressive fiscal policy. Japan tried that. It left the country with a huge national debt (160pc of GDP at one point). Now we are doing it in the West. Highly questionable.

 

The UK and Vietnam are working closely to strengthen legal and judicial co-operation. In September 2008, an agreement was signed which underlined both countries’ commitment to this. We have also agreed to implement a package of measures to enhance co-operation, including by the exchange of texts and research material and encouraging links between our professional legal and judicial bodies. 

 

Additionally, both the UK and Vietnam are committed to promoting increased legal migration, whilst working together to tackle illegal migration, organised crime and the harm it causes.

 

As a diplomat, what do you consider the most important thing to make Vietnamese - UK relationship better and deeper?
Dialogue and a mutual understanding and respect for each other’s perspectives, not just at government level, but throughout society.