Russia-Vietnam: Balancing Strategies

Since 2012, relations between Russia and Vietnam have been described as a comprehensive strategic partnership. Compared to other countries in Southeast Asia, the dynamics of the contacts at the highest level are characterized by a much higher degree of intensity. So, in June 2017, Vietnam’s President Tran Dai Quang visited Russia; in September 2018, General Secretary of the Central Committee of the Communist Party of Vietnam Nguyen Phu Trong (President of Vietnam since October 2018) visited Russia. President Putin has visited Vietnam five times (most recently in 2017 as part of the APEC summit in Danang). Prior to November, Prime Minister Medvedev visited Vietnam in 2015 and as President of the Russian Federation in 2010.

The two countries maintain a strategic dialogue at the deputy defense minister level. Intergovernmental commissions on military-technical cooperation, trade, economic, scientific and technical cooperation are active as well. Russia and Vietnam are on the same page regarding many strategic issues related to the need to form a polycentric international system in the APR based on common security principles that do not imply dividing lines in the region. Russia officially supports full compliance with the Declaration on the Conduct of Parties in the South China Sea adopted by China and the ASEAN countries in 2002, and the early signing of the Code of Conduct between them, which was designed to alleviate the controversy over disputed islands in the South China Sea which are claimed by China, Vietnam, the Philippines, Malaysia and Brunei.

Vietnam’s Old New Course: Between China and the United States
Vladimir Petrovsky
Vietnam wants to establish closer economic relations with the United States. However, its economic dependence on China is too strong.

Russia and Vietnam are implementing unparalleled bilateral projects in the economic sphere, such as the Vietsovpetro oil and gas joint venture in Vietnam. Rusvietpetro companies operate in Russia (developing hydrocarbon fields in the Nenets Autonomous District since 2008) as does Gazpromviet (in the Orenburg Region and the Yamal-Nenets Autonomous Area). Novatek plans to build a terminal for liquefied natural gas in the Vietnamese province of Binh Thuan. In September, Vladimir Putin and Nguyen Phu Trong officially spoke in support of these plans. An agreement on a free trade area (FTA) between the Eurasian Economic Commission and Vietnam was signed in 2015 and entered into force in 2016. So far, this is the only agreement of this kind between the EAEU and a country in Southeast Asia.

The existence of regular visit exchanges and the availability of a comprehensive institutional infrastructure for cooperation sets Vietnam apart from the rest of the ASEAN countries and allows Russia to rely on Vietnam as a key partner in the region.

However, it would be a mistake to assume that Vietnam fully relies on interaction with Russia. Like many ASEAN countries, Vietnam is now seeking to implement several balancing strategies.

 For example, in military-technical cooperation, Vietnam is actively diversifying its ties through cooperation with the United States and several other countries. In 2018, Vietnam participated for the first time in RIMPAC military exercises organized by the United States. Prior to the United States leaving the Trans-Pacific Partnership Agreement in 2016, Vietnam also participated in it, thus seeking to gain access to the American market and technology.

The American Gambit: Did the US Really Quit the TPP?
Alexander Rogozhin
The United States’ foreign trade priorities was the key issue during Donald Trump’s electoral campaign, and  quiting the Trans-Pacific Partnership was one of his main promises. On March 8, the Chilean Foreign Ministry reported that the new version of the agreement was signed without the United States’  participation. Nevertheless, as Valdai club expert Alexander Rogozhin supposes, nothing prevents the US from signing an updated version of the agreement in the future – and that is what it is most likely to do.

Despite the general uptrend in trade and the economy, trade volumes have nonetheless dropped on two occasions in 2014 and 2016. The goal, formulated in 2010, to increase trade to $10 billion by 2020 is not likely to be achieved any time soon. In 2017 trade totaled $3.55 billion and $3.45 billion for the first nine months of 2018. The EAEU-Vietnam FTA project, apparently, made it possible to resolve some problems related to declining trade and bring trade and economic relations back to a track of progressive development. The FTA mechanism itself has so far failed to provide breakthrough economic results, but without it, mutual trade would most likely stagnate. 

With that in mind, the EAEU-ASEAN FTA nevertheless appears to be a one-of-a-kind project, since it is the basis for further interaction between the EAEU and ASEAN (including from the point of view of implementing the idea of ​​the “integration of integrations” advanced by Vladimir Putin in 2015), even if the EAEU decides to sign FTA agreements with individual ASEAN countries (Singapore is next), rather than with the Association as a whole.

The stagnation of bilateral megaprojects is a separate area of concern. Thus, the project to build the first NPP in Vietnam was frozen in 2016. The agreement to build it was signed during Medvedev’s visit to Vietnam in 2010. Instead, the parties are now trying to build, with Russian help, a Centre for Nuclear Science and Technology in Vietnam. Because of the sanctions against Russia, which impede the process of obtaining export earnings by the Power Machines company which is building the Long Fu-1 TPP, this project is also in jeopardy now (it has been underway since 2014 and is scheduled for completion in 2019). Thus, Russia and Vietnam are entering the anniversary year of 2019, which marks 25 years since signing the Treaty on the Fundamentals of Friendly Relations, with a set of difficult questions, the answers to which will require a strategic approach.

Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.