Photographer: Luong Thai Linh/Bloomberg

Vietnam Recalibrates After Trump-Duterte Combo Upsets Strategy

  • Leaders hold high-profile meetings with China, U.S. and Japan
  • Setbacks include TPP trade deal, South China Sea disputes

Vietnam is moving to firm up key relationships after the rise of unpredictable politicians in the U.S. and the Philippines upset its trade and security strategy.

A trio of high-profile diplomatic exchanges over the next week highlight a careful balancing act as Donald Trump prepares to take office. Communist Party chief Nguyen Phu Trong began a four-day visit on Thursday to China -- Vietnam’s biggest trading partner -- that includes a meeting with President Xi Jinping. Outgoing U.S. Secretary of State John Kerry arrives in Hanoi on Friday for talks. And next week Japanese Prime Minister Shinzo Abe makes his first trip to Vietnam since 2013.

During their meeting on Thursday, Xi said the two countries were as "comrades and brothers," telling Trong that China viewed relations with Vietnam from a long-term perspective, and hoped that the two countries would properly manage and control disputes, according to the official Xinhua News Agency. Xi also proposed expanding military and security cooperation, and coordinating on global issues.

Vietnam in recent months has watched as key parts of its economic and foreign policy were thrown into question. Trump vowed to kill the Trans-Pacific Partnership -- a trade deal in which Vietnam was seen as one of the biggest winners -- while new Philippine President Rodrigo Duterte shifted toward China, eschewing a more coordinated approach with Vietnam over territorial disputes in the South China Sea.

Vietnam’s leaders are concerned about political changes in Europe, the U.S. and the Philippines, said Tran Viet Thai, deputy director general of the Diplomatic Academy of Vietnam in Hanoi, where the country’s diplomats are trained.

“It’s a fast-changing world, an unpredictable world,” Thai said. “We have to react very carefully.”

Ton Nu Thi Ninh, a former ambassador of Vietnam to the EU and Belgium between 2000 and 2003, and former vice chair of the Vietnam National Assembly’s Foreign Affairs Committee, said the focus would now be on the new administration in the U.S. and said she didn’t think Vietnam would move closer to China economically if TPP was unsuccessful. “Vietnam already is a member of several free-trade agreements,” Ninh said. “Vietnam is a member of the Regional Comprehensive Economic Partnership, in which China is a member. Vietnam has also boosted trade relations with Russia and Europe.”

War, Suspicion

Relations between China and Vietnam, shaped by decades of war and suspicion, have been strained in recent years by Beijing’s moves to reclaim thousands of acres of land and increase its military presence in the South China. Ties hit a low in 2014, when China sparked an international incident by placing an oil rig within Vietnam’s exclusive economic zone.

Tensions dissipated somewhat after Prime Minister Nguyen Xuan Phuc’s six-day trip to China in September, his first since taking office in April. Chinese state media heralded it as “a new era of stronger bilateral ties.” Vietnam state media used similar language to preview Trong’s trip this week, saying it showed the country wanted to to deepen its ties with China and create a peaceful and stable environment.

“China and Vietnam do have sources of tension on the national interests level that cannot be easily reconciled, such as maritime conflict and trade tension,” said Zhang Mingliang, a professor at the Southeast Asia Research Institute under Jinan University in Guangzhou. “However, at this moment of geopolitical uncertainty, it’d serve the interests of both to aim for a steady, working bilateral framework under which business can be done.”

Duterte’s embrace of China has particularly stung Vietnam. He has softened the Philippines’s position on the South China Sea, sought to negotiate disputes bilaterally instead of as a group and downplayed a July international court ruling that rebuffed China’s claims to more than 80 percent of the waters.

“The Vietnamese feel that Manila’s decision not to push for Chinese compliance with the July arbitral award short-circuited any effort to bring international pressure to bear on Beijing,” said Gregory Poling, a Southeast Asia specialist at the Center for Strategic and International Studies in Washington. “They are not alone -- Singapore, Japan, Australia, the U.S. and others feel the same.”

‘Bigger Role’

Duterte’s move to distance the Philippines from the U.S., its longtime ally, contrasts with Vietnam’s improved relations with Washington under the Obama administration’s so-called Asia pivot. The two countries have started joint naval drills and two U.S. warships paid a visit to Cam Ranh Bay in October for the first time in decades.

The Obama administration was also the key driver of the TPP trade deal, which would represent nearly 40 percent of global economic output worth $30 trillion if it came into force. Japan’s Abe has been a key advocate of the agreement, and has sought to convince Trump of its merits.

Abe will look to strengthen ties on his trip to Vietnam, including cooperation in the South China Sea such as improving coast guard capacity in the region.

“We expect a bigger role from Japan in security and defense,” said Thai of Vietnam’s diplomatic academy. “The game is changing.”

As for Trump, he said, Vietnam’s leaders are at a loss.

“The way he does politics will be quite different -- whether or not it will be good or bad we don’t know," Thai said. "However, we do not think the U.S. national interests in Asia will change.”

(A previous version of this story corrected the gender of former ambassador to the EU, Ton Nu Thi Ninh)

— With assistance by Ting Shi, Luu Van Dat, and Isabel Reynolds

(Updates comment from former ambassador to the EU in 7th paragraph.)
    Before it's here, it's on the Bloomberg Terminal.