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Vietnam in 2014: Foreign Policy in Review

Carlyle A. Thayer, C3S Paper No.2076

1. 2014 is coming to its closing months. What do you think of Vietnam’s foreign policy activities and the country’s diplomatic stance regionally and globally when you look the whole year of 2014?

ANSWER: Vietnam’s diplomacy in 2014 showed the wisdom and foresight of party leaders who adopted an external policy of multilateralizing and diversifying Vietnam’s foreign relations and pursuing proactive integration with the global economy. These expressions may seem like catchphrases but they have demonstrated practical achievements. Vietnam upgraded its strategic partnership with Japan to an enhanced strategic partnership. Vietnam reinforced its bilateral relations with India by hosting a visit by India’s President and by the state visit of Prime Minister Nguyen Tan Dung to New Delhi. Vietnam built on the 2013 agreement on comprehensive partnership with the United States through the visits of Politburo member Pham Quang Nghi and Deptuy Prime Minister and Foreign Minister Pham Binh Minh. The U.S. unilaterally lifted its restrictions on the sale of military weapons and equipment to Vietnam. Vietnam also paid attention to Europe with Prime Minister’s Dung successful attendance at the Asia-Europe Summit Meeting and visits to Belgium and Germany. European leaders made favourable comments on the East Sea.

2. Some says that 2014 “is the toughest year” in decades for Vietnam, particularly with what happened in the East Sea/South China Sea. Do you agree with this? Why?

ANSWER: Since Vietnam adopted doi moi in 1986 no year ranks as bad as 2014 for tensions arising from disputes in the East Sea between Vietnam and China. China’s placement of the oil rig HD 981 with an armada of up to one hundred ships was unprecedented. Not only did it provoke a six-week confrontation at sea between their respective maritime enforcement agencies but China’s actions produced both non-violent political protests as well as violence and the physical destruction of Chinese and other foreign-owned enterprises in several industrial zones. There were fatalities; China evacuated several thousand of its workers and demanded compensation. Vietnam’s attempts to activate hot lines among responsible officials and initial requests to send a special envoy to Beijing were rebuffed. Vietnam also suffered some collateral economic damage through the drop in Chinese tourism and sporadic economic sanctions.

The oilrig crisis of 2014 was the worst crisis in three decades because tensions in the East South could have led to armed clashes at sea.

3. It seems ASEAN and China have not yet found out a “good” way to resolve the dispute in the East Sea/South China Sea. Will this case have better outlook in 2015 in your view? Why?

ANSWER: ASEAN has elected to follow a low-key diplomatic approach to territorial disputes in the South China Sea. It remains wedded to the 2002 Declaration on Conduct of Parties in the South China Sea (DOC) because that is the only agreement ASEAN has with China on this issue. The DOC was in fact a compromise. It is a non-binding political statement. China has seized on this to dictate the pace and scope of consultations on the South China Sea. It took nine years between the DOC and the adoption of Guidelines to Implement the DOC. As of today not one single cooperative project or confidence building measure has been approved.

ASEAN leaders have always adopted a conciliatory posture in their public remarks. They continually state that would like to see an early conclusion of the COC. Thanks to Thailand’s role as ASEAN country co-ordinator for relations with China that the pace of working level consultations has been stepped up. A leaked copy of the draft Joint Statement to be considered by the ASEAN Summit takes note of progress but no details are forthcoming.

ASEAN is a necessary player in the search for a peaceful settlement of territorial disputes in the South China Sea. But ASEAN alone is not sufficient to bring about a settlement. China bears major responsibility. Only Beijing can determine whether it will act with restraint in 2015 by refraining from redeploying the HD 981 to Vietnam’s Exclusive Economic Zone. Only China can end the stand-off with the Philippines over Scarborough Shoal and Second Thomas Reef. And only China can halt its massive land reclamation activities in the Spratly islands.

4. In your view, how could Vietnam resolve the case in relations with both China and ASEAN?

ANSWER: Vietnam should continue to pursue the same strategy that is has in the past. The first is to continue to build up Vietnam’s capacity to defend its sovereignty and territorial integrity by modernizing its air, naval and maritime enforcement agencies. Second, Vietnam must remain unified at both national and society-wide level. There must be a national consensus on the foreign policy strategy to be adopted. Third, Vietnam must continue to conduct bilateral diplomacy with each of its fellow ASEAN members to ensure that ASEAN does not backtrack. Vietnam must lobby for a stronger ASEAN role. Fourth, Vietnam must continue to build up its strategic and comprehensive partnerships with the major powers, Russia, Japan, India, and the United States as well as relations with the European Union. Fifth, and most importantly, Vietnam must continually engage China to work out a modus vivendi in the East Sea. Good relations with ASEAN and its members as well as the major powers will strengthen Vietnam’s hand in relations with China. Any improvement in China-Vietnam relations will also strengthen Vietnam’s hand in conducting foreign policy in general.

5. With recent result of US Congress’s mid-term election, do you think the prospect for TPP conclusion by 2014 is achievable? Why? If not, could TPP be concluded in 2015?

ANSWER: The new Republican Party-controlled Congress, and the Senate in particular, has tipped the scales in the United States in favour of free traders. The Democratic Party was close to the American labour movement and protectionist sentiment ran strong. Key Democratic congressmen opposed the TPP. President Obama supports the TPP and after January 2014 when the Republicans take their seats in Congress they will find common ground in promoting the TPP. If agreement is reached President Obama is likely to win fast track approval for the TPP once negotiations are completed. Fast track approval means that Senators can only vote yes or no on the TPP. They are not permitted to make amendments or add other qualifications.

6. Then, what are the possibilities for Vietnam to conclude its TPP participation in time in your views?

ANSWER: Vietnam has been holding out on TPP negotiations because of the sensitivity of several issues, such as labour rights and transparency in procurement contracts for state-owned enterprises. Vietnamese negotiators were quite aware that President Obama faced domestic difficulties and the fact that Obama made no effort to secure fast track authority meant that Vietnam could afford to wait and see. Now, if the Republicans give priority to the TPP Vietnam will come under pressure to deliver sooner rather than later. Human rights remain a wild card that could interrupt negotiations. The Obama Administration has noted some progress in Vietnam. It remains to be seen whether the human rights lobby can influence Republican Senators to take a harder line than before. The Republicans have stated that they will give priority to improving the domestic economy and that should favour forward movement on the TPP.

7. 2015 will be the key time for Vietnam as the country prepares for Party Congress in 2016. Do you think there will be some major and breakthrough changes/improve-ments to the nation’s top leadership? What are the changes in your opinions?

ANSWER: The Vietnam Communist Party appears to be a creature of habit. The party has set a retirement age of 65 and a limit on two terms in high office. In the past an exception was made on the age limit for the party Secretary General. Also, to hold one of the top five political positions in Vietnam (party Secretary General, state President, Prime Minister, chairman of the National Assembly and head of the party Secretariat) a candidate must have served one five-year term on the Politburo. This structure severely reduces the choice that the party committee looking at future leadership will have in making its recommendations. There are two general possibilities to consider. The first is that a consensus is reached among the present top leaders about who will retire and who will stand for future office. In the past when consensus has been difficult there is pressure on the individuals concerned to step down. Second, party delegates to past national party congresses have pushed to have a greater say in the selection of top leaders even including a choice. The current Central Committee has demonstrated its role as the party’s executive authority. The groundwork has been laid for a possible change in how leaders are selected. In 2005 the British politician Harold Wilson remarked that “a week is a long time in politics.” It is too early to make definitive predictions about leadership changes in Vietnam in 2016 at present.

8. Between now and 2016, what should Vietnam’s foreign affairs sector do more to facilitate the country’s on-going efforts to woo more “trusted and best friends” in your view?

ANSWER: Vietnam’s foreign affairs sector is divided between the party’s external relations committee and the Ministry of Foreign Affairs. Their efforts need to be coordinated. First, the party must decide that the Foreign Minister should be included on the Politburo as was Pham Gia Khiem in the past, to ensure effective oversight and coordination. The basic parameters for Vietnam’s foreign policy have been set. Second, Malaysia will assume the chair of ASEAN for next year. Vietnam must make special efforts to engage with their Malaysian counterparts. Third, when Thailand relinquishes its role as ASEAN country co-ordinator for China Vietnam will also need to engage closely with the new incumbent; and Vietnam should use its role as ASEAN country-coordinator for India to increase India’s influence within ASEAN.

Fourth, as already mentioned, Vietnam needs to engage closely will all of ASEAN’s members to be able to lobby them effectively on matters of concern to Vietnam, especially East Sea issues. Fifth, again as already mentioned, Vietnam needs to engage closely with the major powers and the European Union. Sixth, Vietnam must give extra priority to its relations with China, including party-to-party, military-to-military and not least government-to-government relations.

9. If asked to brief Vietnam in 2015 and 2016, what will you say?

ANSWER: Vietnam will need to pay close attention of developments in three major areas: economic, defence and security and political.

As for economic developments, Vietnam will need focus on its own domestic reforms in order to fulfill the objective of proactively integrating with the global economy. Vietnam needs to carry out reform of its banking system, end bad debts, step up privatization of the state-owned sector and continue to root out large scalecorruption. At the same time Vietnam will have to study closely the implications of possibly joining two regional economic integration schemes at the same time, ASEAN’s Regional Comprehensive Economic Program and the US-backed Trans-Pacific Partnership.

As for defence-security developments, Vietnam will face a major challenge in modernizing its armed forces and building up capacity of its Coast Guard and Fisheries Protection Force. Vietnam will have to make crucial decisions regarding how to use the US $100 million Line of Credit extended by India. It will also have to make crucial decisions about similar purchases from the United States. Vietnam will have to ensure that support from Japan and the United States for maritime security is mutually reinforcing and does not lead to incompatibility of ships and systems.

Absorbing six Kilo-class submarines into Vietnam’s Navy is no easy task. Vietnam must maintain these submarines and their support systems along with the demands for servicing other high-end military platforms, such as missile guided frigates and corvettes as well as Sukhoi-30 aircraft. A key concern is Vietnam’s ability effectively to network these systems to provide maximum synergy, including accurate targeting. Vietnam will most likely need a satellite with military capabilities.

As for political developments, three issues spring to mind. The first concerns leadership transitions in Russia, the Philippines, the United States and other countries in 2016. Vietnamese diplomats must be on their toes to anticipate who the new leaders will be and how this will impact on Vietnam’s interests.

Second, Vietnam will have to closely monitor how Prime Minister Abe fares in domestic polls in Japan as his term of office comes to an end in 2016, and the conduct of relations between Japan and China. As time passes it is likely Xi Jinping will increase his power as he prepares for his second term in office as party leader, head of the military affairs commission, and state president.

Third, Vietnam will have to look beyond the current term of Le Luong Minh as ASEAN Secretary General in 2017. Vietnamese diplomats should monitor likely candidates and effectively lobby for a strong candidate to lead ASEAN.

(Article reprinted with the permission of the author Carlyle A. Thayer, Emeritus Professor,The University of New South Wales at the Australian Defence Force Academy, Canberra email:

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