Professor Carl Thayer from the Australian Defence Force Academy spoke with VET's Xuan Son about Vietnam's diplomatic efforts this year and next.
2014 is coming to an end. What do you think about Vietnam’s foreign relations activities and its diplomatic stance regionally and globally over the course of the year?
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 into the global economy. These expressions may seem like catchphrases but they have demonstrated practical achievements. Vietnam upgraded its strategic partnership with Japan to an enlarged strategic partnership. It reinforced its bilateral relations with India by hosting a visit by the Indian President and by the State visit of Prime Minister Nguyen Tan Dung to New Delhi. Vietnam built on the 2013 agreement on a comprehensive partnership with the US through visits by Politburo member Pham Quang Nghi and Deputy Prime Minister and Minister of Foreign Affairs Pham Binh Minh. The US unilaterally lifted its restrictions on the sale of military weapons and equipment to Vietnam. Vietnam also paid attention to Europe, with Prime Minister Dung’s successful attendance at the Asia-Europe Summit Meeting and visits to Belgium and Germany.
Some say that 2014 has been “the toughest year” in decades for Vietnam, particularly with events in the East Sea. Do you agree with such sentiments?
Since Vietnam adopted “doi moi” in 1986 no year has ranked as badly as 2014 for tensions arising from disputes in the East Sea between Vietnam and China. China’s placement of the oil rig Haiyang Shiyou-981 with an armada of up to 100 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, and China evacuated several thousand of its workers and demanded compensation. Vietnam’s attempts to activate hotlines 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 oil rig crisis of 2014 was the worst crisis in three decades because tensions in the East Sea could have led to armed clashes at sea.
It seems ASEAN and China have not yet found a “good” way to resolve the dispute in the East Sea. Will the outlook be better in 2015?
ASEAN has elected to follow a low-key diplomatic approach to territorial disputes in the East Sea. It remains wedded to the 2002 Declaration on Conduct of Parties in the East Sea (DOC) because that is the only agreement ASEAN has with China. 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 East 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 to the Code of Conduct (COC). Thanks to Thailand’s role as ASEAN country coordinator for relations with China, 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 East 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 Haiyang Shiyou-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.
How can Vietnam resolve the matter in its relations with both China and ASEAN?
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 US - as well as 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.
Will the result in the mid-term elections in the US improve the prospects for the TPP negotiations wrapping up this year? If not, could they be concluded in 2015?
The new Republican-controlled Congress, and the Senate in particular, has tipped the scales in the US in favor of free traders. The Democratic Party was close to the American labor movement and protectionist sentiment ran strong. Key Democratic congressmen opposed the TPP. President Obama supports the TPP and after January 2015, 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.
What chance is there that Vietnam can conclude negotiations shortly?
Vietnam has been holding out on TPP negotiations because of the sensitivity of several issues, such as labor 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 he 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 then favor forward movement on the TPP.
If asked, what advice would you give to Vietnam for 2015 and 2016?
Vietnam should pay close attention to developments in three major areas: economic, defense and security, and political.
In economic developments, it should focus on its own domestic reforms in order to fulfill the objective of proactively integrating with the global economy. Vietnam should carry out reform of its banking system, end bad debts, step up the equitization of the State-owned enterprise (SOE) sector, and continue to root out large-scale corruption. At the same time Vietnam will have to closely study 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 (TPP).
As for defense-security developments, Vietnam will face a major challenge in modernizing its armed forces and building up the capacity of its Coast Guard and Fisheries Protection Force. Vietnam will have to make crucial decisions regarding how to use the $100 million Line of Credit extended by India. It will also have to make crucial decisions about similar purchases from the US. Vietnam will have to ensure that support from Japan and the US for maritime security is mutually reinforcing and does not lead to incompatibility of ships and systems.
Absorbing six Kilo-class submarines into its Navy is no easy task. Vietnam must maintain these submarines and their support system 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 to effectively 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 US and other countries in 2016. Vietnamese diplomats should 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 Chinese President Xi Jinping will increase his power as he prepares for a 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 Mr. 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.