Australia and Vietnam to sign off on a strategic partnership

12 Mar 07:30 PM
Lisa Murray, Laura Tingle, Angus Grigg
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Australia will upgrade diplomatic ties with Vietnam this week as Canberra looks to expand its influence in the region and set up a network of security agreements to hedge against a more assertive China.

The strategic partnership will be signed when Vietnamese Prime Minister Nguyen Xuan Phuc visits Canberra later this week, strengthening defence and trade ties.

The visit follows Labor leader Bill Shorten's recent comments calling out Vietnam, China and India as countries which may see Australia as a "soft touch" and seek to dump cheap steel into the local market.

Mr Phuc is visiting Canberra ahead of a special ASEAN-Australia summit in Sydney at the weekend, which, according to Prime Minister Malcolm Turnbull, will have an overwhelming focus on security issues rather than economic ones.

Nine of the 10 leaders from the Association of Southeast Asian Nations are flying in for the special summit, the first time such a meeting has been held in Australia.

"Australia and ASEAN are close strategic and economic partners, and the Special Summit is an opportunity to make our region more secure and more prosperous," Mr Turnbull told The Australian Financial Review.
"The summit marks a coming of age of Australia's relationship with Southeast Asia. ASEAN is one of Australia's top three trading partners, and we have strong co-operation on countering security threats facing our region".
The upgrade in the Australia and Vietnam relationship comes as the two countries' strategic priorities are increasingly aligned. Vietnam is a key player in territorial disputes in the South China Sea, where its claims overlap with China. It has been one of the few countries advocating a tougher stand against Beijing's moves to construct and militarise artificial islands to strengthen its claims.

Vietnam is also one of the more supportive countries in the region for the revived Quadrilateral Security Dialogue between Australia, the US, India and Japan.

"Australia is pushing for Vietnam to have more self-confidence to play a stronger role in the region," said Carl Thayer, an emeritus professor of politics at the University of NSW.

Mr Turnbull stressed "defence and security co-operation" would be the focus of upgraded ties with Vietnam, when he outlined plans for the Strategic Partnership last November.

At the same time, he noted Vietnam is the fourth biggest source of international students for Australia, the sixth largest market for agricultural products and more than three quarters of the bread used for Vietnam's signature dish, banh mi, came from Australian wheat.
The focus on the strategic nature of the relationship with Vietnam is also contained in the Prime Minister's language about the ASEAN summit to be held in Sydney between Friday and Sunday.

Mr Turnbull said he would be discussing "ways to increase our engagement on education, economic co-operation, countering terrorism and other security challenges".

"We will discuss the ongoing threat posed by North Korea and the importance of maintaining pressure through economic sanctions," he said.

"The global community, and the peace of our region, requires the denuclearisation of the Korean Peninsula."

Canberra and Hanoi first agreed to start the process of upgrading the relationship in 2015.

Last year, at the Asia Pacific Economic Co-operation Summit in Danang, a decision was finally made to upgrade, with a formal signing set to take place later this week.

Hanoi has comprehensive or strategic partnerships with 16 countries, including Japan, India, and Russia.

Australia and Vietnam are both signatories to the revamped Trans-Pacific Partnership trade deal, which had to be renegotiated after the withdrawal of the US under the Trump administration. Australia also has the second largest Vietnamese population outside the country, having received a large number of refugees during the 1970s and 80s.

While Hanoi is careful to balance its relations with the big powers in the region, including China, in recent years it has vastly improved ties with the US. Last week, Danang hosted a US aircraft carrier, the USS Carl Vinson, for the first time since the end of the war in 1975.

"The strategic environment for Vietnam is very tense with China's militarisation of the islands and [Chinese President] Xi Jinping's growing power as he's only going to become more ambitious," said Huong Le Thu, senior analyst at the Australian Strategic Policy Institute.

"Both Vietnam and Australia are very supportive of a free and open Indo-Pacific and greater co-operation in the maritime domain, which in the future will be the main arena for strategic competition. Vietnam and Singapore are the main strategic players in the region."

Mr Thayer pointed out Vietnam was also one of the only countries in the region building up its military. According to the Stockholm International Peace Research Institute (SIPRI), Vietnam was the eighth largest arms importer in the world from 2011 to 2015. Mr Thayer said while Vietnam had dropped back to tenth, it was still a significant importer of weapons.

Canberra's move to upgrade strategic ties with Vietnam could be complicated by Mr Shorten's comments last week naming Vietnam as one country which may seek to dump cheap steel into the local market, after the Trump administration's imposition of new import tariffs in the US.

Mr Shorten said Labor would not allow "trade cheats" to dump goods into Australia and it would triple penalties for circumventing trade remedies, while expanding the powers of the Australian Anti-Dumping Commission and its resources.

"Labor's announcement has been backed by industry and responds to a threat to jobs identified by the Anti-Dumping Commissioner," opposition trade spokesman Jason Clare said on Sunday.

"This is about making sure the system is fair and that everyone follows the rules. It has nothing to do with our relationship with any particular country and to say so is nonsense."

There will be two major lead-in events at the ASEAN-Australia summit: a Business Summit and a Counter-Terrorism Conference.

Mr Turnbull said: "The Business Summit will encourage Australian small businesses to take up economic opportunities offered in Southeast Asia, while top Australian and ASEAN CEOs discuss ways to enhance economic engagement.

"The Counter-Terrorism Conference will strengthen regional collaboration between Australia and ASEAN to combat terrorism and violent extremism."



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