Australia-Vietnam ties deepen with closer trade links, ‘convergent’ views on South China Sea

Australian PM Albanese visited Vietnam with a view to making it one of Canberra’s ‘top-tier’ partners as it seeks to diversify away from China
Analysts say Vietnam seeks Australia’s South China Sea support, while Canberra counts on Hanoi as a bridge to strengthening ties with Asean

Australia

Maria Siow

Published: 9:45am, 7 Jun 2023

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Vietnamese banh mi and beer took centre stage in highlighting the growing relationship between Australia and Vietnam, as Australian Prime Minister Anthony Albanese wrapped up his first official visit to the Southeast Asian nation over the weekend.

“Australia and Vietnam are on a roll,” Albanese said on social media after prominent Vietnamese chef Sam Tran, who has worked in Australia, gave him the food and drink.

“The banh mi and beer tasted even better knowing that it was made with Australian wheat and barley,” added Albanese, who noted that virtually every drop of Vietnamese beer was made using Australian barley, and “a lot of” banh mi, or Vietnamese baguettes, were made with Australian wheat.

While stronger trade and people-to-people relations were on display, Albanese’s trip also allowed the two countries to address their joint concerns over China, analysts said.

Albanese is the first Australian leader in nearly four years to visit Vietnam. Photo: EPA-EFE

Albanese, the first Australian leader in nearly four years to visit the country, told his counterpart Pham Minh Chinh during the two-day trip that he wanted Vietnam to be one of Australia’s “top tier” partners.

The Australian prime minister signed agreements with Vietnamese officials to share intelligence on money-laundering and establish regular trade meetings. Australia also committed US$105 million to support Vietnam’s clean-energy transition and help it update its mining law – to attract foreign investment and develop Vietnam’s critical minerals resources.

Both countries pledged to upgrade their diplomatic ties to a comprehensive strategic partnership by the end of the year, in Vietnam’s fifth such partnership after Russia, China, India and South Korea.

Canberra has been seeking to diversify away from China, its biggest trading partner. Albanese’s visit came amid confrontations between Vietnam’s coastguard and Chinese vessels in waters claimed by Hanoi and Beijing. Last week, Vietnam accused a Chinese survey vessel and its escorts of violating its sovereignty in the disputed South China Sea.

Analyst Carl Thayer said Australia viewed Vietnam as an important partner because of its political stability, economic growth and “convergence of strategic outlook”.

“Both countries share a convergence of views on regional security that includes respect for sovereignty, territorial integrity, freedom of navigation and overflight, trade liberalisation, multilateralism, and a rules-based order,” said Thayer, a Southeast Asia regional specialist who is also an emeritus professor at The University of New South Wales.

Though Australia did not issue a statement on preserving peace in the South China Sea that Vietnam had earlier hoped for, Thayer said both Hanoi and Canberra had long shared similar views on the disputed waterway.

In a 2019 statement, both sides stated their joint concern about the situation in the South China Sea and affirmed their commitment to promote peace and stability in the region, following the establishment of a strategic bilateral partnership.

Vietnamese Prime Minister Pham Minh Chinh (left) and Albanese with the Vietnam women’s national team and Australia women’s national U20 football team at the United Nations International School in Hanoi on Sunday. Photo: EPA-EFE

When asked if Australia would expand freedom of navigation operations to support Vietnam, Albanese told reporters in a doorstop interview over the weekend that Canberra supported the UN Convention on the Law of the Sea and freedom of navigation in the South China Sea.

Tam-Sang Huynh, an international-relations lecturer at the Ho Chi Minh City University of Social Sciences and Humanities, said Albanese might not be willing to explicitly condemn China due to its desire to reset economic ties with Beijing, even as Chinese expansion in the South China Sea continued to be an issue.

“Albanese would support Vietnam’s peaceful approach towards managing tensions in the disputed sea, but assuming that Australia would provide Vietnam unwavering support at the expense of damaging its ties with Beijing is too idealistic,” Huynh said.

In recent weeks, Australia and China have agreed to resume high-level economic and trade dialogue mechanisms; economic ties between the two had deteriorated sharply in recent years due to concerns of Chinese political influence in various sectors of Australian society and Canberra’s call for an international inquiry into China’s response to the Covid-19 outbreak.

Economic dynamics, instead of political ones, should drive the maturity of Australia-Vietnam relations.

Tam-Sang Huynh, Ho Chi Minh City University

Huynh added that Vietnam viewed Australia as a crucial partner while Canberra counted on Hanoi as a bridge to strengthening ties with the Association of Southeast Asian Nations.

“Vietnam needs to internationalise the South China Sea issue and seek support from like-minded powers such as Australia,” Huynh said.

He added that Vietnam’s bolstering of ties with Australia, an Aukus member, was a “subtle strategy … to balance against China’s South China Sea ambition”.

Aukus, a defence alliance launched in 2021 to counter China, comprises Australia, Britain and the United States.

Vietnam is Australia’s 10th-largest trading partner, whereas Australia is Vietnam’s seventh-biggest trading partner. Trade with Vietnam in 2021 stood at US$11.8 billion, according to Australian government data.

Huynh said despite the lack of ideological compatibility between Vietnam and South Korea, both countries reached a comprehensive strategic partnership in December last year, and the same would apply to a similar partnership with Australia.

“Like-minded allies should mean that both nations are working together to invest elements of statecraft to make an Indo-Pacific region that is stable, secure, and prosperous,” he said. “Economic dynamics, instead of political ones, should drive the maturity of Australia-Vietnam relations.”

Hai Hong Nguyen, an honorary research fellow at the University of Queensland’s Centre for Policy Futures, said that education was a prominent area of cooperation between Hanoi and Canberra.

“Australia has emerged as one of the top foreign education markets,” Hai wrote in an article on the Voice of Vietnam website on June 1.

As of December last year, there were more than 22,000 Vietnamese students in Australia, making Vietnam one of its top five sources of international students, he wrote.