Thayer Consultancy Background Brief

ABN # 65 648 097 123

Australian Prime Minister Visits
Vietnam
Carlyle A. Thayer
August 20, 2019

As PM Scott Morrison is paying a visit to Vietnam, I would like to seek your quick
assessment.
Q1: In addition to economy and trade, what would be discussed on the South China
Sea when PM Morrison visit Vietnam?
ANSWER: First, Prime Minister Scott Morrison’s visit to Vietnam will redress a lacuna
in relations between Australia and Vietnam. It will mark the first time in twenty-five
years that an Australian Prime Minister has made an official visit. It is very likely the
two government leaders will agree to meet on an annual basis, including the sidelines
of major multilateral meetings such as APEC.
Second, Morrison’s trip is in reciprocation of the visit by Prime Minister Nguyen Xuan
Phuc last year and its main purpose is to advance the Strategic Partnership adopted
at that time. This agreement included five major areas of cooperation: political;
economic cooperation and development; defence, law and justice, intelligence and
security; education, science and technology, labour, social affairs and culture; and
regional and international cooperation. In order to advance these objectives the two
sides will need to adopt a multiyear Plan of Action.
Third, the South China Sea will obviously feature prominently in discussions. Both
leaders will find common ground in supporting international law and the United
Nations Convention on the Law of the Sea and criticizing coercion and the threat of
the use of force. It is unlikely that the leaders’ joint statement will mention China by
name.
Australia is very keen to promote maritime security cooperation with Vietnam and the
two leaders can be expected to give their approval to discussions on practical matters.
In addition, Australia will offer continued support for Vietnam’s participation in UN
peacekeeping and cooperation in cyber security.
Q2: In The Australian, Peter Jennings said that “… Australia our most important
strategic area is Southeast Asia”. What do you say when it comes to Australia’s
strategic interests in Southeast Asia and Vietnam in particular?
ANSWER: Australia has long-standing interests in the security of Southeast Asia owing
to the legacy of post-colonial ties with Singapore and Malaysia. These ties take the
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form of the Five Power Defence Arrangements (FPDA) with the United Kingdom and
New Zealand. The FPDA is the only functioning defence arrangement in the region.
In 1974, Australia became ASEAN’s first dialogue partner. This reflected the
broadening of Australia’s interests to economic issues such as development
assistance, trade and investment. It is a little-known fact that Australia’s $93 billion
two-way grade with ASEAN is greater that Australia’s two-way trade with Japan and
the United States. In 2010, the Agreement Establishing the ASEAN-Australia-New
Zealand Free Trade Area (AANZFTA) came into force. More recently, Australia and
Vietnam have become members of the Comprehensive and Progressive Agreement
for Trans-Pacific Partnership.
In 1974, Australia and Vietnam established diplomatic relations and over the years it
became apparent that the two countries shared increasingly convergent views on
regional and global political and security issues. Bilateral relations have been
continually raised since 1995 when Vietnam became ASEAN’s seventh member. In
2009, for example, Australia and Vietnam agreed to a Comprehensive Partnership.
This was enlarged in 2015 and three years later bilateral relations were raised to a
Strategic Partnership.
Australia is a trading nation, heavily dependent on trade with Northeast Asia (China,
Japan, South Korea and Taiwan). Australia shares with Vietnam the same interests in
maintaining peace, security and stability in the South China Sea.
Australia and Vietnam share global concerns such as sustainable development,
addressing climate change issues, combating international terrorism and
transnational threats, non-proliferation of nuclear weapons, and UN peacekeeping.
This has resulted in coordination in multilateral bodies.
Australia recognizes and supports Vietnam’s constructive role in regional and
international security particularly as Vietnam becomes ASEAN Chair in 2020 and a
non-permanent member of the Security Council the year after.
Q3: Vietnam is planning to collect diplomatic supports from international community.
I can see that Vietnam has signed many free trade agreements recently. What do you
think about the role of such FTAs to Vietnam’s diplomatic strategy?
ANSWER: Vietnam has long pursued a policy of diversifying and multilateralizing its
external relations, including economic and political relations. China is Vietnam’s
largest trading partner and Vietnam has a large trade deficit. The U.S. is Vietnam’
largest export market, and Vietnam has a huge surplus.
Free Trade Agreements are important to Vietnam for several reasons. FTAs create a
common interest in promoting rules-based trade for mutual benefit among the
countries who are partners; Vietnam gains important market access. FTA’s create a
buffer against protectionism or unilateral actions by major economies. FTAs
demonstrate that Vietnam is committed to globalization and trade liberalization. FTAs,
including the Regional Comprehensive Economic Partnership, help boost Vietnam’s
productivity by raising standards and competitiveness and thus increasing exports.
Suggested citation: Carlyle A. Thayer, “Australian Prime Minister Visits Vietnam,”
Thayer Consultancy Background Brief, August 18, 2019. All background briefs are
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