Canada and Vietnam's Healthy Relationship

Canada and Vietnam's Healthy Relationship

The Vietnam-Canada relationship has seen impressive development in recent years, with Canada providing Vietnam much aid for development. Could you briefly tell us of the significance of Canada's development assistance program and ODA projects implemented in Vietnam?

Canada's development assistance program has provided technical assistance to support reforms in agriculture and rural development, natural resource management, environmental sustainability and private sector development. Technical assistance has enhanced the ability of all branches of the government to analyze and develop policy in areas critical to Vietnam's economic competitiveness.

Canadian development assistance has also helped poor rural communities to plan and carry out their own development projects by providing training in planning, primary health care, and savings and credit management. The support to the government infrastructure program has aided the construction of primary schools, irrigation, transportation and electricity networks while assistance to vocational training institutions is helping prepare the labour force for the market economy. Skills training and credit for new small businesses, especially among women, has boosted rural enterprises and helped increase family incomes in poor areas.

The Government of Vietnam places a high priority on its reform program and on the coordination of donors and their activities, with increasingly positive results. Canadian ODA will continue to support Vietnam's reform process and its poverty reduction plans as it pursues its goals in socio-economic development.  To do this, Canada has recently approved a new ODA program framework which will concentrate on governance, agriculture, rural development and basic education. This framework was prepared in close consultation with the government of Vietnam and will seek to strengthen government systems and harmonize donor aid programs in Vietnam.

The two countries signed the first Agreement for Air Transport on the occasion of the 30th anniversary of diplomatic relations. Do you think it will boost the development of Vietnam's tourism?

With more than 30,000 Canadians visiting Vietnam each year, for tourism, business, and family reasons, the agreement between our countries is growing in importance.  We have not yet reached a point where Canadian planes are travelling to Vietnam, but we think that this is something that we will see within the next few years.  Vietnam is becoming a mainstream destination for Canadian travellers to Southeast Asia, and barring any unforeseen circumstances, our tourism numbers will continue to rise.

What about Trade? What do you think of the growth of bilateral trade and investment in recent years? What advice can you give Vietnam to increase commercial relations between both countries?

Two-way trade between Canada and Vietnam has increased at a rate of approximately 20% in each of the last two years and now stands at more than vs $400 million per year. With Vietnam's exports to Canada accounting for roughly 80 per cent of this value, Vietnam enjoys a significant trade surplus. Not surprisingly, Vietnam's exports to Canada, notably footwear, clothing and apparel, fish and seafood, food products and furniture are some of Vietnam's commercial and export strengths. Conversely, Canadian products imported into Vietnam consist primarily of fertilisers, electrical or electronic machinery and equipment, mechanical appliances, cereals and paper products.

On the investment front, Canada is not yet an important player in Vietnam but investment prospects are attracting Canadian interest. According to Vietnamese reports, Canada had the highest level of foreign licensed investment for the first quarter of 2004. In brief, bilateral trade and investment between both countries is on the rise and there is strong potential for further expansion - as well as greater balance - in Canada-Vietnam bilateral trade and investment ties.

In Vietnam, most sectors offer opportunities to Canadian commercial interests and such market potential is increasingly recognised within the Canadian business community. However, Vietnam's business environment, while improving, remains a challenging one due to several factors such as the high levels of bureaucracy and red tape, and the need for a level playing field with greater transparency. Vietnam's continued efforts towards administrative and legislative reform and towards integration into the global economy should lead to a more stable and welcoming business and investment environment for Canadian companies and, in turn, increased commercial relations between both countries.

What do you think about Vietnam's possible accession to the WTO? 

Canada strongly supports Vietnam's bid for WTO accession and is providing technical training and assistance to Vietnam, both bilaterally and through APEC. Regarding the recently held WTO working party meeting in Geneva, we would agree with the assessment of others: good progress has been made but there is still a long way to go. Vietnam must accelerate and implement its market access and market reform efforts, if it wishes to stay on track for its accession.

• Reported by Thu Huyen