TIME FOR PLAN B

The Trump administration is forcing a new friend to look elsewhere for allies, writes Richard Cockett.

Just over a year ago, at the end of May 2016, President Barack Obama visited Vietnam. The people gave him a rock-star welcome; as well they might have done, for his trip seemed to put the seal on a new, more positive era in US-Vietnamese relations, 41 years after the last Americans scrambled aboard the evacuating choppers to end the Vietnam War. While there, Obama lifted the lethal weapons embargo that had been in place since the war, a move that, according to both sides, removed the ‘last hurdle’ to normalised relations.

Consider how far the two old foes had come since a conflict that cost over 50,000 American lives and countless more Vietnamese. After the opening up of the Vietnamese economy in the 1980s (the doi moi, or economic rejuvenation), the country had become an important centre of cheap offshore manufacturing for American companies. So much so that Vietnam now runs a nearly $32 billion trade surplus with the United States.

Developments on the geo-political side have been even more remarkable. Fearful of a resurgent China’s maritime ambitions in the South China Sea, after some initial hesitation Vietnam has increasingly looked to America as the military and diplomatic guarantor of its regional security. Vietnam welcomed Obama’s ‘Asia pivot’ more than most, just as it was one of the more enthusiastic signatories and supporters of the mooted Trans-Pacific Partnership (TPP), Obama’s trade pact that was supposed to bind together the nations of the Pacific rim in a pro-free trade, pro-American block. Vietnam, still a relatively poor country, was due to be one of the great beneficiaries of the deal.

To cap it all, in June 2013 President Truong Tan Sang met Obama at the Oval Office, only the second time that a Vietnamese president had visited the White House, and they agreed on a new Comprehensive Strategic Partnership between the two countries. The abuse of human rights in Communist Vietnam, the crackdown on bloggers and dissidents, always a concern for American administrations of whatever political stripe, was dealt with briefly; Vietnam promised to improve its record, in return for trade and further military co-operation.

Still a relatively poor country, Vietnam was due to be one of the great beneficiaries of the TPP

Given this neat alignment of interests, it wasn’t much of a surprise that almost exactly a year after Obama’s visit to Hanoi, the new American president, Donald Trump, should welcome Vietnam’s prime minister, Nguyen Xuan Phuc, to the White House. He was only the third Asian leader to meet Mr Trump.

However, the circumstances of Nguyen’s visit to Washington were utterly different from those prevailing at the end of Obama’s presidency. Largely because countries like Vietnam were going to do rather too well out of the TPP, supposedly at the expense of American workers, the new president scrapped it almost immediately after taking office. Furthermore, despite all the China-bashing of his election campaign, in the White House Trump had become less confrontational with China over the South China Sea. His hope was that Beijing might become more co-operative in finding a solution to the more imminent threats emanating from North Korea.

Such is the glorious unpredictability of democracy, all the more baffling, perhaps, to a political class that still takes its communism seriously. At a stroke, the Vietnamese leaders’ carefully constructed economic and strategic masterplan had been upended. So Mr Nguyen was eager to find out what the new American administration could offer Vietnam instead: more bilateral trade, apparently. This is the preferred trade mechanism of a Trump administration that is deeply suspicious, and resentful, of other countries’ trade surpluses with America.

The two countries announced $8 billion worth of trade deals, mainly for high-tech products with American companies like General Electric. The Trump administration will also follow through on certain military aid to Vietnam. A decommissioned American cutter was recently transferred to the Vietnamese Coast Guard, an ideal vessel for defending the littoral against possible Chinese aggression. The United States has also transferred six 45ft patrol boats to Vietnam, known as Metal Sharks.

In all, not a bad outcome, considering how much the Vietnamese had to lower their expectations. They also got a bit of flattery, Trump praising the prime minister for having done ‘a spectacular job, led so many different categories in trade and other things’. And no mention, this time, of human rights, at least not in public. That has clearly fallen down the agenda at the Trump White House, which is particularly pertinent to the American-Vietnamese relationship, since on June 18 Human Rights Watch, a New York-based lobby group, published a new report documenting the increasingly violent crackdown on political activists in Vietnam over the past few years.

But in case America does not turn out to be the dependable ally of yesteryear, Vietnam has been working up its Plan B. Sensible stuff by the Vietnamese leaders, but it must also be worrying to US officials who are concerned about signs of American retreat in the region, a consequence of Trump’s ‘America first’ rhetoric. If Vietnam quietly detaches itself from America’s orbit, who else might follow?

One of the six ‘Metal Sharks’ the US transferred to the Vietnam Coast Guard
One of the six ‘Metal Sharks’ the US transferred to the Vietnam Coast Guard

For a start, shortly before going to Washington Vietnam’s leaders hosted a meeting of the remaining TPP signatories in Hanoi. This included South-East Asian partners such as Malaysia and Singapore. Together with Japan, Vietnam is the prime mover in trying to revive the TPP without the United States. Though a TPP lacking the US will be less attractive for the likes of Vietnam, it would still be valuable, with big markets like Japan’s opening up to Vietnamese goods.

And then there is China. With the Americans dialling down the pressure on Beijing to get more co-operation on Korea, so countries like Vietnam now have good reason to be more accommodating to their giant northern neighbour. In particular, Vietnam might be much more interested in China’s rival to the TPP, the proposed Regional Comprehensive Economic Partnership. This would cover 16 countries: all ten members of the Association of South-East Asian Nations (Asean), as well as India, China, Japan, New Zealand, Australia and South Korea, and cover about 28 per cent of global trade.

Vietnam is learning how to do its own pivot, not out of choice but necessity

Again, Vietnam has been taking a lead in these negotiations. The third high-level ministerial meeting of the 16 countries involved also took place in Hanoi in May, just before the prime minister flew to Washington to see Trump.

China’s concept of the RCEP, as a low-tariff, free-trade area without many of the TPP’s more intrusive regulations on labour reform, clear air, the reduction of state subsidies and the reform of state-owned companies, should suit Vietnam well. But this vision of the RCEP is contested by some of the other more Westernised countries that want a more ‘high quality’ deal, covering labour rights, investments and services – a lot like the defunct TPP. It’s yet to be seen which view will prevail, but Vietnam will certainly be a Chinese ally in this regard. China wants the whole deal wrapped up by November.

For Vietnam, it is certainly useful to have both options on the table, the RCEP and TPP-lite. The forthcoming months will determine which is best for Vietnam’s geo-political interests, as the country’s leaders play off China against the West. Vietnam is learning how to do its own pivot, not out of choice but necessity. It is another shuffling of the deck in the new great game of Asian politics, the rivalry between the region’s two superpowers, America and China.


Dr. Richard Cockett was South-East Asia correspondent for The Economist from 2010 to 2014, based in Singapore. He is the author of several books on history and foreign affairs, including Blood, Dreams and Gold: The changing face of Burma. He is now a London-based staff writer for The Economist.

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