Anglo-Vietnamese Relations

Kerry McCarthy Excerpts

Wednesday 25th April 2012 Westminster Hall

[Kerry McCarthy (Bristol East) (Lab)]

It is, as always, a pleasure to serve under your chairmanship, Mr Caton. I congratulate my right hon. Friend the Member for Knowsley (Mr Howarth) on securing the debate, on his work as chair of the all-party parliamentary group for Vietnam and on having the courtesy to talk to me in the Lobby about some issues that he wanted to raise. It is a pleasure to see the Minister. We tend to face each other in this Chamber rather more often than he ought to, given that this is, yet again, not one of the countries that he covers in his brief, but it is always a pleasure to see him here.

As we have heard, Vietnam is fascinating country with great potential that has made great strides in recent years, but it still faces many challenges. It has come a long way over the past decade, achieving middle-income status and improvements in the quality of life for much of its population. I hope that the friendship between Britain and Vietnam is a factor in helping it achieve that progress and will be a factor in helping it achieve much more over coming years.

Vietnam has already met a number of the millennium development goals, not least on infant mortality and eradicating extreme poverty. The hon. Member for East Dunbartonshire (Jo Swinson) mentioned the progress that has been made in raising child and maternal mortality rates. The poverty rate has decreased from 58% in 1992 to 15% in 2008, which is remarkable progress. UK aid, through the Department for International Development, is making an important contribution, totalling over £200 million over the past five years, with £25 million in debt relief since 2006. But with UK aid and the development partnership agreement due to end in 2016, it is crucial that Vietnam is left in a position not only to sustain the impressive improvements that it has made, but to make much further progress.

Of course, neither this Government nor the previous Labour Administration have focused solely on aid. The right way forward is to strengthen political and economic links, particularly trade links, between our two countries. That began in 2004, with the first official visit of a Vietnamese Head of State to the UK, followed by the first visit by a Vietnamese Prime Minister in 2008, on which occasion the then Prime Minister, my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown), signed a joint declaration on partnership for progress. Five priority areas were included in that partnership agreement: trade and investment; development, including good governance, accountability and the rule of law; international issues, including Security Council co-operation and climate change; education; and tackling illegal migration and organised crime.

The declaration was a landmark achievement in our bilateral relationship, laying the foundations for the strategic partnership signed by the current Foreign Secretary in 2010, the intention of which is to strengthen the relationship on seven fronts: political and diplomatic co-operation; global and regional issues; trade and investment; sustainable socio-economic development; education, training, science and technology; security and defence; and people-to-people links. Part of the political and diplomatic co-operation includes a biennial strategic dialogue, and I very much welcome the Foreign Secretary pursuing that dialogue in Vietnam as we speak—he is certainly in the far east. The Ministry of Defence subsequently signed a co-operation memorandum of understanding, and the UK is increasing its diplomatic presence in Vietnam.

Members of the law committee of the National Assembly visited London last year to discuss political and constitutional reform with hon. Members at one of a number study sessions. It was a good opportunity, and I met some of the delegation on that occasion. Such interchange between the two Parliaments is useful for everyone concerned.

Tourism is a growth sector in Vietnam. People who have perhaps been to Thailand and such places in the past now see Vietnam as the next frontier. The first direct flights from the UK start in December, and it is hoped that they will increase tourism as well as business links.

The partnership with Vietnam is therefore developing on a number of fronts. Strengthening the ties between the UK and Vietnam is of mutual benefit to both our countries, hence the Foreign Secretary’s decision to visit Vietnam this week to meet business leaders and UKTI’s designation of Vietnam as one of its high-growth markets. Vietnam is the second most popular investment destination in the emerging markets after China, and more than 100 UK companies have registered offices in Vietnam. UK-Vietnam trade, as mentioned, was worth more than £1.8 billion last year, with UK imports accounting for the vast majority of that sum, totalling over £1.5 billion, compared with exports of only £295 million. With the strategic partnership specifying a trade volume target of $4 billion by next year, can the Minister in his response set out the progress made and the likely balance of trade over the coming years?

The bilateral relationship not only strengthens co-operation between our two countries, but provides a greater presence for the UK in ASEAN and for Vietnam in the European Union, as my right hon. Friend the Member for Knowsley said. The UK was the 13th largest investor in Vietnam last year—we were the third European nation after the Netherlands and France—and the EU is Vietnam’s third largest trading partner after China and the US. With negotiations due to start on a bilateral free trade agreement between the EU and Vietnam, making Vietnam the EU’s third partner in the region after Singapore and Malaysia, it will be important for the UK to maintain a strong position in the market and during the negotiations.

While noting the economic benefits for our countries, however, we cannot overlook the need for ongoing political, economic and social reform in Vietnam, as has been said. Having initiated the “doi moi” reforms, joined ASEAN, been a member of the UN Security Council and made impressive progress on many of the millennium development goals, Vietnam has rightly been commended. It has improved its standing in the international arena, but Vietnam’s partners, such as the UK, have a duty to support further improvements, not least in human rights, and to ensure that economic growth does not leave the poorest behind.

The Foreign Office has stated:

“Corruption in Vietnam remains systemic”,

and in the 2011 corruption perceptions index, Vietnam scored only 2.9, ranking it 112th out of 182 countries. That is of both domestic and international concern, given that the Business Anti-Corruption Portal reports that

“weak enforcement means corruption continues to be cited as one of the most problematic factors for doing business in the country.”

What support, therefore, is the UK offering for the delivery of the anti-corruption strategy?

Vietnam is to be commended for its development efforts, and it is encouraging that its 10 year socio-economic development strategy connects economic growth to social progress and equality, but the previous UN resident co-ordinator, John Hendra, has expressed concerns about whether the Administration’s efforts would reach the most vulnerable. It is one thing for a country to be lifted to middle-income status, but the benefits are not necessarily felt by everyone in the country. There is concern that, in particular, informal workers, unemployed agricultural workers and ethnic minority groups from remote areas will be left behind; 70% of the population live in the countryside and are not necessarily benefiting from urban growth.

Growth has not brought economic stability, and the country is struggling with high inflation; the Financial Times reported that food prices had risen by 32% in the 10 months to October. The Vietnamese Government have raised the minimum wage in response, but 12 million people are still in poverty, and the poverty rate among ethnic minorities is at 50%. Land ownership is a particularly difficult issue, with confusion and conflicts developing where citizens have land-use rights but the land remains officially owned by the state. It is worth noting, as the EU has, that Vietnam has sought to improve living conditions for ethnic minorities, aiding social and economic integration, including support for education in minority languages, and it is important that the UK, too, supports such efforts. Will the UK Government work to ensure that the benefits of the expanding trade relationship with Vietnam help not only the UK, but more of the Vietnamese population?

Vietnam has attracted investment and overseas business with its cheap labour—wages in China are a third higher. Wages remain low, although, as I said, the Vietnamese Government lifted the minimum wage recently. The strategic partnership declaration referred to increasing Vietnam’s footwear, garment and textile exports, which will, of course, be a pivotal source of income for the country, but will the UK Government monitor workers’ rights and conditions and any implications for Vietnam’s agricultural workers?

As the hon. Member for East Dunbartonshire mentioned, economic growth can come at a high cost to the environment. Vietnam, as she said, is particularly vulnerable to climate change; it is among the top five countries most likely to be affected by rising sea levels. Will the UK continue to provide climate change assistance for adaptation and mitigation measures?

Human trafficking remains a serious concern, which is attributable partly to the uneven economic development to which I referred and to the trend for rural-to-urban migration. Over the past year, Vietnam has developed a national plan of action on human trafficking, and its anti-human trafficking law came into effect in January. The Child Exploitation and Online Protection Centre has identified Vietnam as the No. 1 source of potential victims in the UK. Will the UK Government therefore work with the Vietnamese authorities to ensure that their measures to end trafficking are effective and that victims are supported?

On human rights, the bi-annual EU-Vietnam human rights dialogue is an important initiative and a sign of Vietnam’s commitment, as is the ASEAN Intergovernmental Commission on Human Rights. Worryingly, though, as mentioned, restrictions on freedom of expression have been tightened over the past couple of years, and the suppression of political dissent has continued. Human rights campaigners this month called for the release of the three bloggers referred to by the hon. Member for East Dunbartonshire—the founding members of the Club for Free Journalists—who have been accused of conducting propaganda against the state and could face up to 20 years in prison. Can the Minister tell us what representations the UK Government have made on the cases of those three bloggers in particular and on the more general issue of internet freedoms, freedom of expression, freedom of religion and an independent judicial system?

While Vietnam is moving forward, it is worth remembering this morning how the past continues to affect the lives of many in the country. More than 100,000 Vietnamese have been killed or injured by land mines since the Vietnam war and, according to the UN, 6.6 million hectares remain polluted, which Vietnam estimates will take decades to clear. The US ambassador to Vietnam reports that the USA has provided $62 million, but have the UK Government had any discussions with officials in either the USA or Vietnam about efforts to remove the land mines?

My right hon. Friend the Member for Knowsley spoke movingly about the effects of Agent Orange, which is another tragic legacy of the conflict. Two years ago, the UN announced a $5 million project to help clean up contamination, after the Vietnam Government had reportedly spent $5 million building landfill for contaminants on one of the three main sites affected. Vietnamese officials, however, estimate that they might need at least another $60 million to decontaminate those three bases. The US Government have contributed, and they have given some funds to help Vietnamese living with disabilities as a result of Agent Orange. Has the Foreign Office recently assessed Vietnam’s ability to clear the contamination and help its victims and what international aid could be given to assist the country?

As I mentioned earlier, the Labour Government signed a memorandum of understanding for UK-Vietnam co-operation by 2013, which included pursuing objectives in ASEAN and the EU, expanding trade, and the pursuance of the “doi moi” agenda. As we celebrate the 40th anniversary of diplomatic relations next year, it is encouraging that the UK continues to develop a closer relationship with Vietnam and to expand trade opportunities. I urge the Minister to ensure that the UK supports Vietnam in helping to spread such benefits as evenly and as widely as possible. I wish both countries the best success in pursuing their friendship in the years to come.

--- Later in debate ---

[Alistair Burt]

I am not as familiar with visa issues affecting Vietnam as I am with those in countries of which I have more intimate knowledge, but I think the problems are common and similar. We are trying to operate a regime that will encourage people to come to the United Kingdom within the limits set by the Home Office on security, numbers, and everything else. The balance is always difficult. I will raise with the Minister of State, Foreign and Commonwealth Office, my hon. Friend the Member for Taunton Deane the issues relating specifically to Vietnam, and I presume that he has already been in close touch with the Home Office. The balance is difficult. It is not easy anywhere, and I will ensure that the hon. Lady’s concerns are reflected back.

Education and its spin-over into the general partnership with the United Kingdom put us in a good position not only to be a leading partner in educational development but, as a result of English language use, in various commercial opportunities. I will speak about trade and investment before coming to human rights and other issues.

Vietnam’s impressive potential makes it attractive to UK businesses, which are already doing well in Vietnam. The UK is already Vietnam’s biggest foreign investor in financial services. Other sectors where there are opportunities include education, which I touched on a moment ago, real estate and retail. Bilateral trade in goods reached almost £2 billion in 2011, up by 33% on the previous year. UK exports grew by 18%, reaching £325 million. As I am sure hon. Members will recall, the strategic partnership includes a joint commitment to double trade by 2013—the hon. Member for Bristol East made the point about where our balance of trade should be heading—and our UKTI team has trade officers in Hanoi and Ho Chi Minh City to help UK companies looking to establish or expand their presence in Vietnam. However, in a rapidly growing market it is necessary to take a longer perspective, and we are working with the Vietnamese through the Joint Economic and Trade Committee to identify priority areas and boost our trade and investment relationship. Those bilateral talks include issues of market access and other points of concern to UK companies.

We are well placed to share UK expertise in the financial services, and as I have indicated, the UK is already the biggest investor in that sector in Vietnam. The UK has recently signed a memorandum of understanding with the Vietnamese Ministry of Finance under which we will co-operate on a financial framework for public-private partnerships, public debt management and sovereign credit ratings.

UK companies are world leaders in managing large infrastructure projects and that will be an important area for Vietnam in coming years. It is estimated that an investment of around $160 billion will be required over the next decade, and given the scale of that investment, new models of funding for those projects will be required. We have actively shared our experiences of the public-private partnership model with the Vietnamese, and we hope that UK companies will continue to contribute their world-class expertise.

However, despite that background and the UK’s involvement in trade and investment and commercial opportunities, we acknowledge that Vietnam must do more to meet its commitments. Vietnam has reaped the benefits of its accession to the World Trade Organisation in 2007, but its obligations must also be prioritised. We regularly encourage Vietnam to liberalise its markets further, and negotiations on an EU-Vietnam free trade agreement will start soon, which will bring additional benefits to the UK and Vietnam.

Bureaucracy and corruption remain major problems; Vietnam is ranked 116th on Transparency International’s corruption perceptions index—a long way below China and Thailand. The hon. Member for Bristol East raised that issue and asked what more we can do to help, and the UK remains keen to work with Vietnam to address those problems, including through the anti-corruption dialogue. We believe that tackling corruption has become a priority for the Vietnamese Government. They have developed a comprehensive legal framework on anti-corruption measures, and in 2009 they signed the United Nations convention against corruption. Although there has been good progress, the enforcement and impact of the convention remains patchy at best. Therefore, a joint in-country team from the Department for International Development and the Foreign and Commonwealth Office has been formed to lead our anti-corruption work. Such work is given high priority in Vietnam because it has a direct impact on UK interests and we believe that we can make a difference in a fast-emerging market. Corruption is holding back economic development in too many countries in the region, as well as in other parts of the world. It is an endemic and cultural problem, and needs to be tackled. I am confident, however, that our efforts will assist Vietnam in its attempts to deal with that problem.

Before looking at human rights, I would like to mention one or two regional issues and respond to the right hon. Gentleman’s comments about the South China sea. As Vietnam’s economic power grows, so does its political power. Through our bilateral relationship we are encouraging Vietnam to play an active and responsible role on the global stage, and to use its influence in the region and through ASEAN on issues of importance such as Burma, counter-proliferation and climate change.

As the House will be aware, the Government are concerned about tensions in the South China sea, which is a vital global trade artery. The UK has an interest in maintaining freedom of navigation in the region, and we hope that all parties can resolve disputes peacefully and in line with international law. The UK continues to call for all parties to show restraint and abide by international norms for the safe conduct of vessels at sea. We hope that the Vietnamese can build on recent discussions with all relevant parties and reach an agreement.

We recognise, however, that the dispute in the South China sea is long-standing and complex. It centres on a maze of overlapping territorial claims and the associated right to exploit maritime resources, by China, Vietnam, the Philippines, Malaysia, Taiwan and Brunei. Oil and gas reserves in the sea are significant. The South China sea is a vital global trade artery and some 50% of world trade passes through it.

As the right hon. Gentleman made clear, China, Vietnam and the Philippines have been vigorous in stating their claims. Earlier this month, Philippine and Chinese naval vessels were involved in a tense stand-off over 12 Chinese fishing vessels that were anchored in disputed waters off the north-west coast of the Philippines. Although such incidents continue to be relatively low level, the UK remains concerned about the potential for a minor skirmish to escalate quickly through a miscalculation on either side.

Our role is to encourage all those involved to seek agreement through international negotiation and existing processes. The right hon. Gentleman asked about advice from the United Kingdom, and as an island nation with a long history and involvement in such matters, our advice on maritime issues and territorial disputes will continue to be available to all parties. It is essential to find a peaceful way forward. We understand that ASEAN and China have agreed to develop a code of conduct for the South China sea, and we continue to support that process.

Let me turn to human rights, and the issue of Agent Orange that was mentioned by the right hon. Gentleman. While that remains primarily an issue for the United States and Vietnam, we share a concern about the circumstances of the past. We continue to pay close interest to the issue—I know that during a visit to Vietnam in September last year, members of the all-party group for Vietnam, together with staff from our embassy, visited a number of sites affected by the use of Agent Orange.

Since 2001, the Governments of the US and Vietnam have worked together on the potential environmental and health issues related to Agent Orange and dioxin contamination. The Joint Advisory Committee that advises both the US and Vietnam on activities related to Agent Orange and dioxin contamination, including research and environmental remediation, met for its fourth annual meeting in September 2009. In December 2010, the US and Vietnam signed a memorandum of intent to start work on dioxin clean-up in Da Nang, to be completed in 2013. Although it is primarily a matter between the US and Vietnam, we take a close interest in it and our officials have raised the issue directly with the United States. The right hon. Gentleman can be assured of our sympathy and understanding in relation to those concerns.

Other issues of human rights have been mentioned, including freedom of expression, the blogosphere, freedom of religion and freedom of politics. As the Foreign Secretary has said, human rights are essential to and indivisible from the UK’s foreign policy objectives. As hon. Members will know, the FCO publishes an annual human rights report. The 2010 report, published in April 2011, identified Vietnam as one of 26 countries of concern and highlighted the concern that there were no signs in the short term that the human rights situation there would change. I encourage all colleagues to look at the report for 2011, which is due to be published shortly.

Supporting Vietnam in improving its record on human rights remains a priority for the UK and is very much part of the strategic partnership. We engage Vietnam on human rights bilaterally and through the EU, which holds an annual human rights dialogue with Vietnam. Our overarching objective is to strengthen accountability, which would lead to increased freedom of expression, effective oversight mechanisms and a more robust response to corruption. Our efforts are focused on building engagement with the Government and the Communist party of Vietnam on key areas of concern; supporting the development of the media; enhancing openness, transparency and Government accountability; and tackling corruption.

The hon. Member for East Dunbartonshire referred to freedom of expression, which is our main human rights concern in Vietnam. The Vietnamese authorities maintain a tough stance against any political dissent and a firm grip on print, broadcast and online media across the country. We have concerns about the Vietnamese Government’s treatment of peaceful activists, bloggers and land rights campaigners. National security laws are regularly used against political dissidents and human rights defenders and often lead to lengthy prison sentences. We continue to urge the authorities to adopt a more tolerant approach, stressing the links between Vietnam’s future macro-economic development and its willingness to encourage free speech, open debate, innovation and creativity, which are all important in developing a modern, vibrant and industrialised economy.

The hon. Lady mentioned the death penalty, and I can assure her of the UK’s belief that it is wrong in all circumstances. We will continue to raise the issue with nations that do not hold that view.

The hon. Lady raised the issue of freedom of religion. In recent years, the Vietnamese Government have made progress in implementing their legislative framework to protect freedom of religion and belief. However, there are still isolated reports of harassment of religious groups by local government officials, as well as delays in approving the registration of religious groups. We and our partners in the EU continue to encourage the Vietnamese authorities to ensure that religious freedoms are respected consistently across the country and that central Government policy is understood and implemented appropriately by provincial and local authorities. There have been a number of incidents involving Christian and Buddhist sites as part of land disputes between religious groups and local authorities. In such cases, we have always urged all parties to seek a peaceful resolution, and we have urged the Vietnamese authorities to ensure that property registration procedures are applied consistently across the country.

The hon. Lady mentioned migration and trafficking, about which we are very concerned. The Vietnamese are one of the top three nationalities encountered in the UK as potential victims of trafficking. None the less, the scale of the problem is small compared with illegal migration from Vietnam. Many people are complicit in their illegal entry, but once they are in the UK, organised crime groups target those who are vulnerable and traffic them internally within the country. Sadly, Vietnamese adults are almost as likely to be trafficked for sexual exploitation as they are for labour exploitation. The key to tackling trafficking is to decrease the smuggling of Vietnamese nationals to the UK.

We are also concerned about Vietnamese minors. Between April 2009 and February 2011, 75 out of 96 victims were identified as minors. The majority arrive in the UK as clandestine entrants and are then targeted for labour exploitation, especially cannabis cultivation.

To reduce such threats, we have developed an excellent relationship with the Vietnamese Ministry of Public Security on migration issues. That is particularly significant, given that the UK is clearly the demandeur in the relationship. We are increasing work on organised crime through the Serious Organised Crime Agency, which will post a full-time officer to Vietnam in 2013. For the time being, the work is covered by a Bangkok-based officer, who visits Vietnam twice a month. Through the risk and liaison overseas network, the UK Border Agency is increasingly active in Vietnam, and it will become still more active following the agreement of the memorandum of understanding on immigration information exchange.

Colleagues raised a couple of issues about climate change. Across the Government, we will launch a new trilateral relationship with the Government of Vietnam and the World Bank, and we have been working closely with Vietnam on that. As part of the strategic partnership, the Department for International Development will fund a £3 million project covering key gaps in capacity in five Vietnamese partner Ministries, and that will include adaptation and low-carbon growth analysis.

On adaptation, DFID is developing a project on coastal adaptation in the Red river delta. We hope that will be funded by the international climate fund, which is designed to address climate change internationally. The hon. Lady was right to recognise the particular geography of Vietnam, whose river deltas put it at maximum threat from climate change. That is a further reason why we should act bilaterally with Vietnam, as well as acting on our international obligations.

The right hon. Member for Knowsley mentioned development and poverty, and I am keen to respond. On development, we recognise that economic and commercial growth and opportunities in Vietnam are perhaps the biggest drivers in raising living standards and dealing with poverty. Vietnam has made considerable progress against key development indicators and is seen as something of a success story in reducing poverty. In 2011, it ranked 128th out of 187 countries on the human development index, which is well above what could be expected, given the country’s current national income. However, challenges still remain. Some 12 million people still live in poverty, and the poverty rate among ethnic minorities is particularly high, at 52%.

Since 2006, we have granted Vietnam more than £25 million in debt relief through our DFID office in-country. Based on a 10-year development partnership agreement, the UK has provided more than £448 million in grand-aid to Vietnam. When the development partnership agreement concludes in 2016, DFID will graduate from its programme in Vietnam. As part of that transition plan, DFID will focus on ensuring that interventions are sustainable beyond the period of its presence. Long-term activities on issues such as governance, climate change, and trade and investment are increasingly taken forward as part of the strategic partnership. We are also working on that with multilateral organisations.

The hon. Member for Bristol East mentioned labour conditions and wages. As part of Vietnam’s work with the UK Government, we are discussing capacity building and sharing our experience on labour laws, union participation and economic development in conversations with partners in Vietnam.

[Kerry McCarthy]

Will UK trade unions be involved in that, perhaps under the umbrella of the TUC? Will they work with labour organisations in Vietnam on these issues?

[Alistair Burt]

If I may, I will raise that with the Minister of State, Foreign and Commonwealth Office, my hon. Friend the Member for Taunton Deane. However, I saw Brendan Barber quite recently regarding trade union activity in countries in transition in north Africa, and we have a good relationship with the TUC in taking forward work on trade unions in places where that may have been difficult historically. I am sure the same partnership opportunities will exist in Vietnam.

I hope that covers the issues colleagues have raised. If anything has been left untouched, I will, of course, ensure that it is dealt with by letter. I hope the time we have spent on the debate and the points that have been raised confirm that my right hon. Friend the Foreign Secretary’s visit to Vietnam today is timely and builds on the good relationship between the UK and Vietnam, which has been built up over a number of years. The strategic partnership between us, as well as our common concern to use the opportunities provided by trade and investment and to recognise Vietnam’s growing political power and responsibilities in the region, are all good reasons why my right hon. Friend should be there today building our relationship and looking to the future.

I also hope that what I have said about the UK’s commitments and engagement—whether on commerce, poverty or human rights—shows that we have the right balance in our relationship. We want to encourage development right across the board in Vietnam, while not holding back on addressing issues that may be detrimental to its development, as well as those issues that any country, on an international basis, will want to put right over a period of time. In the UK, Vietnam has a good partner on those issues. We will offer advice and support as Vietnam continues its progress through the century.