Five decades seems like a long time, and there are a lot of stories to tell. For me, the story is very gratifying, because even before establishing diplomatic relations, Canada was here as a peacekeeper, and made the decision in 1973 to negotiate diplomatic relations, which opened the door to all kinds of new connections. Our early days of cooperation involved a lot of development assistance, supporting the Vietnamese Government’s efforts to pull people out of poverty and get businesses moving.
In the beginning, we were really focused on basic poverty reduction. But then, as Vietnam grew and the economy started to develop, we began supporting more and more small businesses and helped create the atmosphere that exists today. After 50 years, we are seeing the fruit of all these efforts. Vietnam has become our biggest trading partner within ASEAN. So, moving from those very early days of assistance and peacekeeping to this flourishing partnership and trade has been extremely gratifying to see.
I think that being the 14th-largest investor in Vietnam is a very good base. The thing to remember about Canadian investors, compared to others, is that they are quite conservative. For example, two of our biggest investors in Vietnam are insurance companies. Insurance and financial companies have to be somewhat conservative. As a matter of fact, despite all the turmoil in banking markets, insurance markets, and stock exchanges, Canada has fared better than most countries, because we have a very strong fiscal responsibility and a very disciplined approach to financing. There are good and bad sides to this, but Canadian investors tend to be quite conservative. That means that when considering Vietnam, they are looking at what the risks are and how are they going to balance the potential benefits and those risks. So, for them in particular, I think the regulatory environment, stability, transparency, and reliability are critical.
There are some areas where I think the regulatory environment is still being developed. And Canada is assisting in parts of that process. We will see more and more investment coming in, not just in manufacturing but also in portfolio investment and directly into companies. Canada has some of the world’s largest pension funds, and they seek to invest large sums of money in long-term projects, including infrastructure, but they need to know that those investments will be stable, that the risk is being shared and manageable, and that the risk is in fact shared between governments and the private sector.
So we are working with Vietnam, for example, on public-private partnerships and infrastructure, to maintain the regulatory environment to ensure that the balance of risks is attractive to investors. And I believe that reform and development will lead to much more investment and more diversity in investment in the future.
With an economy growing as fast as Vietnam’s, of course, you have to be conscious about a few things, especially the environment and ensuring that economic benefits go to everyone. Regarding climate change and clean energy, Vietnam is one of the most vulnerable countries in the world to climate change. You see it with changing weather patterns, flooding, and the coastal environment. Canada has therefore redirected some of our development assistance from basic human needs to support Vietnam’s clean energy transition. Canada is a proud partner of the Just Energy Transition Partnership (JETP) in Vietnam, and is contributing resources, technical expertise, and know-how to support the country’s transition to cleaner energy.
One way we are working is through our development assistance. We are already providing technical assistance to help manage smart coastal communities and to sustain forests in highland areas to offer economic benefits while preserving forests, which is a key issue around the world. We have already started to move forward in this direction and support Vietnam in its transition and environmental protection.
In addition, Canada was a founding member of the Global Plastic Action Partnership. And I, as Ambassador, sit on the leadership for Vietnam’s national Plastic Action plan. We are providing support and technical expertise for a long-term plan in Vietnam on how to reduce plastics. As we know, plastics end up in oceans. Vietnam depends on its oceans for fisheries, offshore wind energy, and tourism. It is therefore essential to reduce the amount of plastics in the environment. And Canada is a key partner of Vietnam in this matter.
Finally, Canada is, as I mentioned before, a member of the JETP. Through this partnership, we are elevating our assistance to help Vietnam not only increase renewable energy production but also to increase energy storage capacity, which is important for renewables, and to improve transmission. Because once you use radical renewables, you need a smart grid to be able to consume large volumes of electricity at certain times.
We are particularly excited about supporting carbon pricing in Vietnam. The Vietnamese Government has a plan to pilot carbon pricing by 2025 and have a national carbon market by 2028. Canada is one of Vietnam’s closest partners in supporting options to pursue this goal. And in fact, Canadian Prime Minister Justin Trudeau has announced the Global Carbon Pricing Challenge, which aims to get 60 per cent of global carbon emissions covered by carbon pricing, and we are inviting Vietnam to join that initiative. We therefore hope that we will soon make progress in this area.
This is an ambitious goal, but is a great goal. One of the means by which we can foster closer and deeper economic exchanges is through the Joint Economic Committee. In 2022, our ministers of trade agreed that we should have a committee to look at how can we further promote and boost trade. The first meeting of this committee took place in July 2022, between the deputy ministers of trade. We agreed at the time to establish a secretariat to monitor trade flows, and also working groups. One is on trade facilitation, which focuses on things like supply chains, shipping logistics, and trade policy to ensure that we are creating an enabling environment for more two-way trade. The other working group is on clean energy, which focuses on how to mobilize not just development assistance but also to encourage technology companies and commercial enterprises to contribute to clean energy. So that mechanism provides us with a really good framework to guarantee the maintenance of this very rapid growth in bilateral trade.
Absolutely. Since the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) came into force here in Vietnam in 2018, exports to Canada have grown rapidly. In fact, about 93 per cent of total two-way trade is Vietnamese exports to Canada. Vietnamese products, seafood, fruit, furniture, shoes, clothing, and electronics are all finding huge markets in Canada. Canadians love them. Though all economies are experiencing some challenges, including high inflation and uncertainty, Canadians are still shopping. Within the G7, spending is the highest in Canada. So Canadians will continue to buy high-quality Vietnamese products. We expect that low tariffs and preferential treatment will increase the volume of Vietnamese products finding markets in Canada.
We have good mechanisms with the Vietnamese Government, and we will continue to enhance our engagement in this regard. Through Canada’s new Indo-Pacific Strategy, we have a number of new programs that will help support trade with Vietnam. We are increasing our footprint. That means more people and more diplomats like me will be here in Hanoi in 2024 to support trade relations and help Canadian companies find Vietnamese partners. We also have some regional initiatives that will further support trade partnerships. We hope that, in 2024, on the 30th anniversary of the establishment of the Canadian Embassy in Hanoi, we will see a Team Canada Trade Mission to Vietnam, which is a large-scale government-led mission with business involvement, to really make some solid introductions between businesses from the two countries.
In addition, we still have work to do to promote the CPTPP. Not all companies, importers, or exporters are aware that tariffs are lower and in fact are close to zero in many cases. We need to do more to promote the use of this trade agreement and make sure that people understand that Canada is a great partner.
Finally, we do not yet have direct transport links between Vietnam and Canada. Most of our exports are transshipped through Singapore and Shanghai. As volumes continue to grow, I think it is time for us to look at how we can establish direct links between Hai Phong and Vancouver, or Ho Chi Minh City and Prince Rupert. Direct shipping and direct flights will be a goal for us in 2024.
I think we are only scratching the surface. We have seen a kind of quantum leap in our relationship over the past 50 years, from establishing diplomatic relations and opening embassies to signing the Comprehensive Partnership. I think Canada and Vietnam are now aiming for our next quantum leap. Bilateral relations are very strong, and trade is a prime example.
I believe that the next quantum leap will be a partnership for the benefit of the world. How can we carry forward the strong partnership and understanding that we have developed to contribute to a rules-based international order and respect for international law? How can we work together to foster more peace and stability in ASEAN, in the Indo-Pacific and beyond? How can we ensure that we are doing our best on environmental issues, such as negotiating an international treaty on plastics? We will increasingly look to Vietnam to join us, say, as a middle power, to negotiate new agreements to foster together a more peaceful, stable, and prosperous world.
Vietnam’s international role has only been growing, and I think you can see that the government and the people have increasing confidence in playing their role on the global stage. Part of that comes from economic growth. Vietnam is meeting this region and perhaps the world when it comes to economic development. The world is increasingly looking to Vietnam to be a center of manufacturing excellence. And soon, Vietnam will not just manufacture, it will also innovate. People will not only buy products made in Vietnam, but also products invented in Vietnam. So the future is very bright.
Globally, within ASEAN, we believe that Vietnam will play a leading role. ASEAN is an increasingly important organization, a great example of consensus-building and multilateralism. And Vietnam’s diplomacy, with a great history of fine diplomats, plays a really critical role in bringing consensus to that group. More broadly, I think Vietnam can play a leadership role beyond the region. And with a partner like Canada, there is no limit to what it can do.