British PM offers loan, touts trade potential on Vietnam visit

By Martin Petty

HANOI, July 29 (Reuters) - Prime Minister David Cameron pushed to step up trade with Vietnam on Wednesday to capitalise on "enormous" opportunities for British firms in an economy Britain would support with 500 million pounds in infrastructure loans.

Making his fourth stop on his sweep through Southeast Asia, Cameron met Vietnamese counterpart Nguyen Tan Dung in Hanoi and oversaw agreements between companies of both countries in infrastructure, engineering, insurance and energy.

A British business delegation has joined Cameron on his trip to Indonesia, Malaysia, Singapore and Vietnam, his first venture outside Europe since winning an election in May.

He is seeking to expand Britain's trade relationships beyond Europe, parts of which remain struck in an economic rut.

"Our trade with Vietnam accounts for just 0.5 pct of the UK's total global trade and I think that indicates the enormous opportunity that there is," Cameron told a news conference.

"We want to go much, much further ... we believe there's much more to come."

Britain would provide 500 million pounds ($783.8 million) in credit finance for Vietnam's infrastructure development, which he said would also provide opportunities for UK firms.

Vietnam's $184 billion economy, about one-fifteenth of the size of Britain's, is growing at 6.28 percent, one of Asia's fastest rates.

Britain is the third-biggest European Union investor in Vietnam at $2.7 billion, with Rolls-Royce Standard Chartered and Marks and Spencer among UK companies operating in the communist country.

Bilateral trade has doubled in the past three years and reached $2.5 billion in the first half of 2015, mostly exports of textiles, footwear and cellphones to Britain, according to Vietnamese government data.

Vietnam is pushing through a series of economic reforms, attracting foreign firms like Intel Samsung and LG (KSE: 003550.KS - news) to its manufacturing sector, buoyed by its pursuit of numerous multilateral free trade agreements slashing export tariffs to major markets.

They include a FTA with the EU, which Dung said would "open up great opportunities" for firms from Britain and Vietnam.

Among agreements reached on Wednesday were a $1.4 billion, 20-year deal between Vietnam Airlines and Rolls-Royce and the issue of a 100 million pounds sovereign bond by Vietnam's Finance Ministry to Prudential (SES: K6S.SI - news) .

In a veiled reference to the assertiveness of neighbour Beijing in the South China Sea, Dung said he and Cameron "share deep concern" over recent developments that threatened security and freedom of navigation, "particularly the large scale land reclamation activities". (Additional reporting by Mai Nguyen; Editing by Janet Lawrence)