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US – Vietnam Relations and the China factor; By Carl Thayer

President Donald Trump, left, and Vietnamese President Tran Dai Quang shake hands at the Presidential Palace, Nov. 12, 2017, in Hanoi, Vietnam. Image Courtesy: by ABC News

Article No. 37/2019

The following is a compilation of Dr. Carl Thayer’s consultancy briefs on Vietnam – USA Relations as seen in the context of the China factor.

[Carlyle A. Thayer is an Emeritus Professor at the University of New South Wales, Australian Defence Force Academy, Canberra. The views expressed are his own. Thayer Consultancy provides political analysis of current regional security issues and other research support to selected clients. The views expressed in this article are of the author.]

A backgrounder on Vietnam Communist Party General Secretary Nguyễn Phu Trong’s trip to U.S. expected to take place this October, 2019 and the China Factor. Could you address the following questions:

Q 1. Are there any new developments expected from this trip?

ANSWER: On 27 February this year President Donald Trump met in Hanoi with President Nguyen Phu Trong prior to the second summit between Trump and North Korea’s leader Kim Jong-un. At their meeting President Trump invited President Trong to pay an official visit to the United States to discuss measures to intensify their bilateral comprehensive partnership. The White House has not yet officially confirmed the dates for President Trong’s visit.

According to Hanoi-based observers, after Prime Minister Nguyen Xuan Phuc’s successful visit to Washington in May 2017, Vietnam lobbied the U.S. for an invitation for Vietnam Communist Party Secretary General Trong to visit Washington. The U.S. side preferred a meeting of equals, that is, between two presidents. It was only after the death of President Tran Dai Quang in September 2018 and the decision of the Vietnamese leadership to appoint Secretary General Trong to the concurrent post of state president that Trong’s visit became a possibility.

Three factors in particular appear to account for Trump’s official invitation. First, Vietnam was singled out in the U.S. National Security Strategy and National Defense Strategy as a potential strategic partner. In 2020 Vietnam will assume the Chair of the Association of Southeast Asian Nations (ASEAN). Secondly, Trump attended the APEC Economic Leaders’ Summit in Da Nang in November 2017 before meeting Vietnam’s leaders in Hanoi. Third, at short notice, Vietnam agreed to host the second summit meeting between Trump and Kim in February 2019.

Q2. Why is the trip of significance for Vietnam?

ANSWER: Vietnam has been treated well by President Trump and his Administration; nonetheless, there are a number of unresolved trade, investment and economic issues that need to be addressed. Both sides share a growing convergence of views on a range of issues and this provides the opportunity to review and update their 2013 comprehensive partnership. Hanoi-based observers reported in May that the United States suggested raising bilateral relations with Vietnam to a formal strategic partnership. U.S. defence officials reportedly wanted approval for annual visits by a nuclear-powered aircraft carrier.

Q3. What do you expect from this incoming trip?

ANSWER: An official visit of this nature is expected to result in “deliverables” for both sides. The United States and Vietnam are currently negotiating a revised bilateral trade agreement in which the U.S. trade imbalance ($39 billion in 2018), increased market access for American companies, and protection of U.S. intellectual property rights will feature prominently. Vietnam would like to see the Trump Administration end tariffs on shrimp, catfish and aluminum and steel and grant Vietnam “free market” status.

In the past, Vietnam has always announced major purchases of U.S. goods, such as 50 to 100 Boeing aircraft, on the occasion of high-level visits. However, the crash of Boeing’s 737-MAX jets caused Vietnam to suspend licenses for this aircraft. During President Trong’s visit Vietnam could announce it would lift this suspension if Boeing meets new safety standards.

Vietnam will press the United States to continue to address war legacy issues such as Agent Orange or dioxin contamination and disposal of unexploded ordnance. Vietnam will expect a firm U.S. commitment to continue to assist with dioxin remediation at Bien Hoa airbase.

One unresolved major issue is Vietnam’s status under the Countering America’s Adversaries Through Sanctions Act (CAATSA). CAATSA is aimed at imposing sanctions on countries, like Vietnam, that purchase defence equipment and weapons from proscribed Russian defence entities.

CAATSA contains a provision for a waiver if countries take steps to decrease their dependency on Russia. When James Mattis was Secretary of Defense he sought waivers for India, Vietnam and Indonesia. A country is not qualified for a waiver if it maintains contact with Russian entities involved in hacking in the United States. A waiver cannot be automatically extended unless a country can demonstrate that it has taken steps to reduce its dependency on Russia. Vietnam procures over eighty percent of its defence technology and weapons from Russia.

A new irritant has arisen recently as a result of the U.S.-China tariff war, namely shipping Chinese manufactures to Vietnam where they are relabeled “made in Vietnam” and then transshipped to the United States. The issue of designating Vietnam a currency manipulator was recently threatened but is dormant for the moment.

The timing of President Trong’s visit could not be more fortuitous given the on-going naval standoff between Vietnam and China in the Vanguard Bank in the South China Sea. While a clutch of observers argue that Chinese pressures will push Vietnam closer to the United States, the range of unresolved issues – coupled with Vietnam’s inherent caution if not suspicion of the United States – suggest Vietnam will act cautiously. It should be noted Vietnam and the United States have different conceptions of a strategic partnership. To Vietnam, a strategic partnership is a broad-based agreement covering many areas of cooperation of which defence and security is one; the United States gives greater emphasis to defence and security cooperation. There are three possible outcomes of President Trong’s visit to Washington:

  1. Following the pattern set by Australia the two sides could agree to enhance their comprehensive partnership;

  2. The two sides could announce they will hold high-level negotiations on raising bilateral relations to a strategic partnership;

  3. The two presidents could issue a joint statement on establishing a strategic partnership.

We would like to ask for your assessment of the following three sets of issues:

Q 1. While there, is there a realistic chance he would flip the policy towards China? If not, what will General Secretary Nguyen Phu Trong and US President Donald Trump will talk about? Do you think General Secretary Nguyen Phu Trong be healthy enough to go to America this October?

President Nguyen Phu Trong since 14 May when he reappeared in public after his ill health in April was finally confirmed by party officials. This month rumours circulated that Trong would travel to Washington to meet President Trump. But neither side has made any official announcement of a visit. Secretary General Trong has also kept a low profile in the Vietnamese media with the bulk of reports noting his role as party Secretary General in chairing regular meetings of the Politburo and addressing the tenth plenum of Vietnam Communist Party Central Committee in May. This past week Trong was reported to have received Malaysia’s Prime Minister Mahathir and General Secretary of the Lao People’s. Revolutionary Party, Bounnhang Volachith. President Donald Trump met President Nguyen Phu Trong in Hanoi on 27 February prior to the second U.S.-North Korean summit. At their meeting President Trump invited President Trong to pay an official visit to the United States to discuss measures to intensify their bilateral comprehensive partnership. This will be the center-piece of discussion if the trip eventuates.

There are three likely possibilities:

  1. The two presidents will agree to enlarge their 2013 comprehensive partnership,

  2. The two presidents will announce negotiations on raising bilateral relations to a strategic partnership

  3. The two presidents will sign a joint statement on strategic partnership.

Any one of these three possibilities will signal that Vietnam will move to enhance its relations with the United States in response to Chinese intimidation and bullying in the South China Sea in recent months.

Trade, investment and protection of intellectual property rights will figure prominently in discussions, given Vietnam’s growing trade surplus with the U.S.

Finally, war legacy issues such as remediation of dioxin (Agent. Orange) poisoning at Bien Hoa airfield will be discussed.

Q 2. If Mr. Nguyen Phu Trong resigns from his post as the General Secretary, who of the following people, Trần Quốc Vượng, Nguyễn Xuân Phúc and Nguyễn Thị Kim Ngân, has the highest chance in becoming the next party chief, why and why not?

ANSWER: Who will be the next party Secretary General will be determined by whether or not the posts of state president and party Secretary General are officially combined or kept separate. Current regulations require candidates to the office of president to have substantial experience in government affairs. This requirement would seemingly rule out Trần Quốc Vượng whose career has been based within the Vietnam Communist Party.

All three persons mentioned in your question will be over 65 if the thirteenth national party congress meets on schedule in early 2021. Vượng will be the oldest at 68, while both Nguyễn Xuân Phúc and Nguyễn Thị Kim Ngân will be 67. All three will have to pass stringent medical tests to qualify and then be granted an exemption to the 65 years retirement age.

If the posts of party leader and state president are combined the choice would come down to Phúc and Kim Ngân in my opinion. Nguyễn Phú Trọng became party Secretary General after serving as Chair of the National Assembly. This precedent would favour Kim Ngân; but she would be the first woman to hold this post. Phúc’s track record as prime minister has been a competent one and Vietnam’s interests are best served by keeping him in that post, in my opinion.

Q 3. After more than a month of tension in the South China Sea, the Haiyang Dizhi 8 vessel first entered just moved closer to within 185km of Vietnamese coast. Do you think this will help push Vietnam closer to the US?

ANSWER: According to diplomatic sources in Hanoi, the United States suggested to Vietnam this year that they raise bilateral relations from a comprehensive to a strategic partnership. At the same time, U.S. defence officials have requested Vietnam’s agreement on an annual visit by a nuclear-powered U.S. Navy aircraft carrier. Both initiatives were broached before China deployed the Haiyang Dizhi 8 to waters around Vanguard Bank inside Vietnam’s Exclusive Economic Zone. The United States has repeatedly issued strongly worded statements condemning China’s bullying and interference with Vietnam’s long-standing oil exploration activities. If Secretary General Trong visits The White House and meets with President Trump in October, the timing will be fortuitous for both sides to step up cooperation in maritime security.

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