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Thayer Consultancy Background Brief:

ABN # 65 648 097 123


Vietnam’s Leaders Face
Challenges in Relations with the
Biden Administration
Carlyle A. Thayer
January 16, 2021
We are planning a curtain raiser for Vietnam’s thirteenth national party congress and
would appreciate you analytic inputs to the following four questions:
Q1. What will be the main challenges facing the Vietnam Communist Party in its new
term?
ANSWER: The new leaders of Vietnam will face at least seven major challenges over
the next five years.
First, they must combat the coronavirus by vaccinating the Vietnamese people while
at the same time restrict the entry into Vietnam of persons from COVID-19 infected
areas.
Second, resume economic growth by continuing to restructure state-owned
enterprises, assist businesses and industries to recover from COVID-19.
Third, fully implement the obligations in free trade agreements with Europe, Eurasian
Economic Union, Regional Comprehensive Economic Partnership and the
Comprehensive and Progressive Trans-Pacific Partnership.
Fourth, fully take advantage of the Fourth Industrial Revolution by developing the
digital economy and protecting Vietnam in the cyber domain.
Fifth, maintain autonomy and the capacity to navigate major power rivalry safely.
Sixth, defend national sovereignty and maintain territorial integrity in the East Sea in
the face of Chinese intimidation.
Seventh, protect the environment on land and in maritime areas and mitigate the
impact of climate change.
Q2. How will tension between Washington and Beijing impact Vietnam over the next
five years?
ANSWER: If relations between China and the United States grows more tense Vietnam
will come under increased pressure to take sides and have less options to maintain its
autonomy. If relations between China and the United States improve, and evolve in
the direction of a G-2 type arrangement, Vietnam’s interests, especially in the South
China Sea, could be impacted negatively.
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However, if China-United States relations evolve into a mixture of cooperation and


less intense rivalry, Vietnam can gain leverage to maintain its autonomy and
independence for action.
Q3. What 8s your outlook on the South China Sea disputes over the next five years?
ANSWER: Maritime disputes in the South China Sea will remain intractable due to
China’s continuing persistence to exert control over this maritime area and to extract
the marine resources, including hydrocarbons, for its own benefit. China will continue
to militarize the South China Sea by increasing it naval footprint.
It is unlikely that an effective legally binding Code of Conduct (COC) will be agreed
among ASEAN member states and China. China will continue to manipulate
differences among ASEAN members “to divide and rule.” If a COC is agreed, it will not
contain provisions for enforcement.
Q4. The Trump administration labelled Vietnam a currency manipulator, and the U.S.
Trade Representative could move to impose tariffs on Vietnamese goods. How will
this will fare under the Biden Administration and what should Vietnam’s new leader
do about that?
ANSWER: On 15 January, the United States Trade Representative (USTR) issued a
finding that Vietnam’s “acts, policies and practices including excessive foreign
exchange market and other intervention and other related actions, taken in their
totality, are unreasonable and burden or restrict U.S. commerce.” These actions
“harm U.S. workers and businesses, and need to be addressed.”
However, the USTR announced it was “not taking any specific actions… at this time
but will continue to evaluate all available options.”
The Biden Administration is more likely to engage with Vietnam at the working level
to resolve economic and commercial disputes rather than unilaterally pursue an
ideologically motivated campaign of slapping tariffs and other sanctions on Vietnam.
This is Vietnam’s preferred route. During the Trump Administration, Vietnam
demonstrated a willingness to meet U.S. demands half way and there is every reason
that Vietnam will continue this approach.
The Biden Administration also is likely to view relations with Vietnam in their totality
rather than segregate out economic and commercial issues. This approach will be
conducive to resolving outstanding issues through dialogue and negotiations.

Suggested citation: Carlyle A. Thayer, “Vietnam’s Leaders Face Challenges in Relations


with the Biden Administration,” Thayer Consultancy Background Brief, January 16,
2021. All background briefs are posted on Scribd.com (search for Thayer). To remove
yourself from the mailing list type, UNSUBSCRIBE in the Subject heading and hit the
Reply key.

Thayer Consultancy provides political analysis of current regional security issues and
other research support to selected clients. Thayer Consultancy was officially
registered as a small business in Australia in 2002.
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