Singapore, Vietnam to explore enhanced air services pact

Hanoi People's Committee chairman Nguyen Duc Chung calling on PM Lee at a hotel in Vietnam's capital city yesterday.
Hanoi People's Committee chairman Nguyen Duc Chung calling on PM Lee at a hotel in Vietnam's capital city yesterday.ST PHOTO: JAMIE KOH

Easing of travel, trade barriers has benefited both countries: PM Lee

Singapore and Vietnam will explore ways to strengthen air links between their countries and beyond, the outcome of which can benefit business on both sides, Prime Minister Lee Hsien Loong said yesterday.

Mr Lee and Vietnam's Prime Minister Nguyen Xuan Phuc had agreed there was room to further grow passenger and cargo traffic.

Speaking to Singapore reporters at the end of his four-day official visit to Vietnam, he also noted the easing of travel and trade barriers had benefited both countries.

Further measures in this area will strengthen both economies, he said in the interview, during which he also touched on the Vietnam-Singapore Industrial Parks and the need for substantive regional trade pacts.

Mr Lee said he raised the issue of liberalising air services with Mr Phuc because the traffic is growing rapidly in tandem with closer bilateral ties."I made the pitch to him that we should enhance the air services agreement... because that will develop the traffic further and develop the business further. He was receptive, so we will talk to their officials.

"I hope we will make progress."

Every year, about 400,000 Vietnamese travel to Singapore and 250,000 Singaporeans head to Vietnam, and flights between the two countries are often full.

Mr Lee added that flights beyond the two countries - known as fifth and sixth freedom flights - should also be looked at as part of the pact.

The two PMs, who met on Thursday, asked their officials to work closely on regional forums such as the Asia-Pacific Economic Cooperation forum, which Vietnam is chairing this year, and Asean, which Singapore will chair next year.

They agreed to promote Asean's solidarity, unity and centrality and build capacity for member nations to deal with traditional and non- traditional security challenges.

They also discussed the Trans-Pacific Partnership (TPP) and Regional Comprehensive Economic Partnership (RCEP) pacts.

Both countries are part of the multilateral trade agreements, and Mr Lee said he encouraged Vietnam to take a "forward-leaning approach" towards the RCEP, which is being negotiated among the 10 Asean nations and China, India, Japan, South Korea, Australia and New Zealand.

The United States has withdrawn from the 12-nation TPP, effectively putting the deal in limbo. But the rest, including Japan, are trying to find a way forward for the pact.

"The TPP is important, but it is not the only way to promote trade liberalisation. The RCEP is another important path and we hope we will have a substantive RCEP."

Meanwhile, Singapore will ratify the TPP, said Mr Lee. This hinges on Singapore being able to reap the benefits of the pact in a timely way.

Responding to media queries, the Trade and Industry Ministry said that at a recent meeting in Chile, the TPP parties "reaffirmed our commitment to a rules-based international trading system".

Singapore looks forward "to working with the others to making this happen, including continuing with preparations for domestic ratification", its statement added.

The TPP ministers will gather again in May at an Apec meeting.

Vietnam, however, has deferred its ratification but is watching other partners' actions, including that of the US, Mr Lee said.

Other regional issues discussed included the South China Sea. It was not the visit's main focus but it was covered, he said.

A major part of bilateral ties, however, is economic cooperation.

Six agreements were signed during Mr Lee's visit, including a possible eighth joint industrial park and an innovation park.

Such parks help attract Singapore companies to Vietnam because the environment is familiar and includes other Singapore firms with similar work styles, Mr Lee said. "It is a way of going overseas as Singapore Inc, because it is the whole team."

UOB is set to get a banking licence by June, and this will further promote investments from Singapore to Vietnam, he added.

Singapore industrialists, retailers and food entrepreneurs feel opportunities are good in Vietnam, he said. "They know this is a developing economy, so not everything is perfect... (but) you can achieve success if you are willing to venture."

A version of this article appeared in the print edition of The Straits Times on March 25, 2017, with the headline 'S'pore, Vietnam to explore enhanced air services pact'. Print Edition | Subscribe