Interview - Sky News on the Hour

Subjects: Vietnamese Economic Reform; Australia-Vietnam Bilateral Relations

NEWSREADER: Foreign Minister, Stephen Smith, has wrapped up talks with the Vietnamese Prime Minister in Hanoi. The official visit marks 35 years of diplomatic relations with Vietnam.

The Foreign Minister spoke to SKY's chief political reporter, Kieran Gilbert, a short time ago from Hanoi.

KIERAN GILBERT: Foreign Minister, Stephen Smith, thanks for your time today from Hanoi. You've been holding talks with the Vietnamese Prime Minister previously raising concerns that the Vietnamese need to undertake further economic reform; is that something you've raised with the Vietnamese PM today?

STEPHEN SMITH: Yes, Kieran, it was one of the things that we discussed. The relations between Australia and Vietnam are very strong, very good. We've had growing investment and trade in recent years.

A lot of this has come about Vietnam's reforms, called doi moi which started in the 1980's, and we've been encouraging this openness and these reforms to continue, because that opens up the prospect of investment from Australian companies into Vietnam. Prospects such as the ANZ getting a fully-fledged foreign licence and our minerals and resources companies like BHP and others getting into the development - the responsible development of Vietnam's mineral resources.

GILBERT: And trade between the two nations has doubled over the last five years, apparently worth $6 billion last year. So it is one of our more significant trading partners in Southeast Asia.

SMITH: Well that's certainly right, but we think we can do even better. We've got a very good bilateral relationship with Vietnam. A lot of that comes from our early recognition of Vietnam by the Whitlam Labor Government, and my trip marks the 35th anniversary.

But we think we can do better not just on the trade and investment front but also working closely with Vietnam in our region, in ASEAN and ASEAN-related forums, and also internationally in organisations like the WTO - the World Trade Organisation - and the United Nations itself.

So we see a lot of further potential for this relationship not just in trade and investment but working together in the region and multi-laterally.

GILBERT: You pointed out that your trip marks 35 years of diplomatic relations between Vietnam and Australia. It's also the first official bilateral visit by a Rudd Government minister. Talk us through how important the people-to-people links are because we know there were tens of thousands of refugees in the wake of the conflict that came to Australia and form a major part of the Australian multicultural population.

SMITH: Well that's absolutely right. In my conversations with Prime Minister Dung and with Foreign Minister Khiem, we've underlined not just those trade and investment relationships but also the people-to-people exchanges. And, yes, we've got a very robust Australian-Vietnamese community, and we have those historical links with Vietnam.

But one of the things which holds us in good stead in Vietnam is that our Overseas Development Assistance Program with Vietnam has been strong. And this year, for example, it will be $100 million per year. And a lot of that development assistance is in the education area with scholarships, so there are growing people-to-people exchanges firmly based in education. So that's also a very important modern day aspect of the relationship between Australia and Vietnam.

GILBERT: You referred to the $100 million in developmental funding to Vietnam; it's number five on our list in terms of recipients of Australian aid. Is that something that was discussed in your talks with the Vietnamese Prime Minister and, for that matter, your foreign ministerial counterpart? Is that - were they happy with that amount or did they lobby for more in terms of development funding?

SMITH: No, Vietnam is very pleased with what we do on the development assistance front. And one of the great icons of the relationship between Australia and Vietnam is the My Thuan Bridge, which was a project by the Keating Labor Government. So there's great affection for both the Whitlam and the Keating Labor governments through early recognition and that bridge project.

The discussion we had was about increasing scholarships, increasing education. I also announced a very important program which will further our links in the security and police cooperation and anti-narcotics front. At the request of the Communist Party of Vietnam, through our Development Assistance Program, we're providing a half-a-million dollars for anti-corruption training of Communist Party officials, and we'll do that through a project based at the Australian National University in Canberra.

So there is a whole range of things that we do. Education and building capacity of the Vietnamese Government and its officials is also an important part of that relationship.

GILBERT: And, Stephen Smith, just finally, you head from Hanoi to Bangkok this evening; it's the first visit - first ministerial visit by an Australian Government minister since the coup in Bangkok in 2006. What are you hoping to achieve during your talks there?

SMITH: Yes, tonight I travel to Thailand where I'll be having a formal bilateral with my Thai counterpart. It's the first visit by an Australian minister to Thailand since the coup, and the first visit since the re-establishment of democracy in Thailand.

And I'll be making the point very clearly that a democratic Thailand is very important not just to Australia but also to our region. Thailand is potentially a very significant player in our region, and it's very important that the starting point be a democratic basis for Thailand's entry into the region and onto the global stage.

GILBERT: Stephen Smith, from Hanoi, thank you very much for your time.

SMITH: Thank you, thanks Kieran. Thanks very much.

Media Inquiries: Foreign Minister's office (02) 6277 7500