Thayer Consultancy Background Briefing:

ABN # 6s 648 097 123

Vietnam: Trump's Visit and
Arms Sales
Carlyle A. Thayer
November 5, 2017

Q1. How significant is Trump's visit to Vietnam?

ANSWER: President Trump's visit to Vietnam is significant for both countries. By
attending the APEC summit in Da Nang Trump is demonstrating support for one of
the region's most important multilateral institutions. By paying an official visit to
Hanoi Trump is demonstrating that the convergence in strategic outlook between
Washington and Hanoi can lead to cooperation and partnership on issues of mutual
concern most notably the East Sea disputes.
For Vietnam, Trump's visit to Hanoi is a visible symbol that the U.S. Administration
is committed to enlarging the comprehensive partnership negotiated during
President Obama's term in office. The United States is a vital market for Vietnam and
Vietnam is seeking a pathway to deepen economic and commercial ties in spite of
Trump's withdrawal from the TPP.

Trump's visit will take place coincidently with President Xi Jinping's visit. This is
significant because Vietnam wants to maintain its autonomy and stay out of the
orbit of any major power. Both Xi and Trump will conclude that they both must
support Vietnam to remain independent because without such support Vietnam
might be swept into the orbit of the other major power.

Q2. Apart from trade issues, how high up on Hanoi's agenda is Vietnam's desire
to buy US weapons?
ANSWER: Vietnam's defence budget is largely determined by its economic growth.
There are no signs that the defence budget will be increased dramatically. With the
exception was Vietnam's purchase of over sixty T-90 tanks from Russia. Vietnam has
not made any big-ticket arms procurements in the wake of its purchase of the
enhanced Kilo-class submarines. So large-scale purchases of U.S. weapons are
unlikely forthe foreseeable future. They are expensive and besides Vietnam's
maintenance and logistics support is all based on Russian technology. The only major
purchase likely is a second Hamilton-class cutter.

Q3. A Washington, D.C.-based branch of Vietnamese army-owned Viettel has

hired a local company to do lobbying related to weapons issue in the United States.
What is your assessment of the prospects of this development?
 2

ANSWER: The 2015 US-Vietnam ioint Vision Statement on Defence Cooperation

included a new development possible cooperation in defence technology and
technology transfer. This is Viettel's forte. Vietnam is likely to be scouting around for
defence technologies that will network its various systems and act as force
multipliers, such as greater maritime domain awareness. There is also possible
cooperation in the cyber field and in space. Viettel's hiring of a lobby group in
the United States is a major development and indicates that cooperation in defence
technology is very likely.

Suggested citation: Carlyle A. Thayer, "Vietnam: Trump's Visit and Arms Sales,"
Thayer Consultancy Bockground Brief , November 5, 20t7. 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.
 Thayer Consultancy Background Briefing:
ABN # 65 648 097 123
Presidents Quang and Trump to
Meet: Let's Make a Deal?
Carlyle A. Thayer
November 11, 2017

Ql- What is your expectation on the meeting tomorrow between President Donald
Trump and Prime Minister Nguy6n Xu6n Phric?
ANSWER: The meeting will be a set piece affair because Prime Minister Phuc met
with Trump at the White House on May 31. Then they spoke for half an hour through
interpreters. A lengthy joint statement was released obviously hammered out by
senior officials including the Secretary of State and Minister of Foreign Affairs. The
two leaders will recommit to enlarging the comprehensive partnership negotiated
when Obama was president. So the Trump-Phuc meeting will be an easy one. Trump
will bask in his centrality and Phuc will bask in the knowledge that Trump's visit will
balance Xi Jinping's, ln 2015 Vietnam hoped to host both Xi and Obama but Obama
postponed until May the following year.

Q2. What wording/announcement will you be looking out for and what do you think
the Americans want most?
ANSWER: There will be three baskets of issues but they will be listed serially. The
first basket will concern trade and investment issues that will be dealt with in later
meetings by specialists under the TIFA (trade and investment framework
agreement). Vietnam ranks sixth in the list of countries with a trade imbalance with
the U.S. Vietnam will agree to open its market to American companies and address
trade imbalance. When Prime Minister Phuc visited the U.S. billions of dollars in
deals were announced but there is a wide discrepancy on the amount involved
(ranging from S8 billion to S15 billion).

The second basket of issues will deal with a range of opportunities for further
development - science and technology, education, people-to-people exchanges etc.
The third basket will focus on defence and security cooperation and will include
Vietnam's purchase of a second Hamilton-class Coast Guard cutter, U.S. assistance
for maritime security capacity building, defence technology exchanges, U.S. support
for Vietnam's commitment to UN peacekeeping, and a visit by a U.S. Navy aircraft
carrier to Cam Ranh lnternational Port next year.

Q3, Do you expect any developments with respect to the South China Sea issue?
ANSWER: The two leaders are singing from the same sheet of music. They will
uphold the peaceful settlement of disputes under international law including the UN
 2

Convention on the Law of the Sea, the full implementation of the Arbitral Tribunal
Award in the case the Philippines -v- China, the adoption of a legally binding Code of
Conduct, freedom of navigation and overflight, and unimpeded lawful commerce.
Both will oppose further militarisation. Of note is whether the reference to the
arbitral award is softened to "legal and diplomatic processes."
Q4.- What are yourthoughts about Trump's trip so far in Vietnam? ln Danang, it
almost felt like the Trump team started to relax a bit after the "big" meetings in
South Korea and in China.
ANSWER: Trump's speech was a strong reaffirmation of "all eggs in one basket"
approach to "free and fair" trade. The basket, of course, is Trump's emphasis on
bilateral trade agreements. lt was disconcerting to see Trump address APEC, the
region's premier multilateral institution that promotes trade and
investment liberalisation among its 2L members, and in effect rubbish multilateral
efforts. Trump is conceding leadership on promoting regional economic integration
to China. Xi Jinping will promote his Belt and Road lnitiative and champion ASEAN's
Regional Comprehensive Economic Partnership.

Q5, ls Vietnam of strategic importance to the U.S.?

ANSWER: Unequivocally yes and that is why Vietnam's Prime Minister was the first
government leader from Southeast Asia to meet with Trump at the White
House. Vietnam is a positive and strong contributor to ASEAN unity and regional
security. There is a growing convergence of strategic interests in balancing China
and maintaining security in the South China Sea. Vietnam has no reservations in
supporting Trump's leadership on defeating international terrorism and Vietnam is a
supporter of non-proliferation on the Korean Peninsula. Vietnam is campaigning for
non-permanent membership on.the UN Security Council.
Q6.- Do you think Trump's talk on lndo-Pacific is meaningful for Southeast Asia? Or is
it the Administration's way of boxing in China?
ANSWER: The concept of the lndo-Pacific region is not new but it has become
prominent because Trump has promoted it. lt was an idea first proposed by then
Prime Minister Shinzo Abe in 2007 and revived when he was returned to office. lt
has been widely discussed by Japan and lndia and of course picked up by Rex
Tillerson when he visited New Delhi. The term lndo-Pacific region has been invoked
for the last three-four years in the Australia-U.S. defence community. lt should be
noted that the U.S. Pacific Command's area of operation includes lndia. Prime
Minister Modi has shown an increased willingness to work with other likeminded
democracies and partners in pursuit of his Act East policy.
The term lndo-Pacific privileges the maritime domain stretching from lndia's east
coast through the South China Sea to the Western Pacific. This term has resonance in
Southeast Asia, especially to Singapore, Malaysia, lndonesia, and Vietnam because it
means major maritime powers, including the United States, will remain engaged and
they counterbalance China's growing naval reach.
 J

Suggested citation: Carlyle A. Thayer, "Presidents Quang and Trump to Meet: Let's
Make a Deal?," Thoyer Consultancy Background Brief, November L1-,2OL7. 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.
 Thayer Consultancy Background Briefing:
ABN # 65 648 097 123
Vietnam: Significance of Trump
Official Visit
Carlyle A. Thayer
November 11, 2017

Ql. What's the significance of President Donald Trump's visit to Vietnam?

ANSWER: The significance of Trump's visit to Hanoi is that it provides reassurance to
Vietnam that the United States is committed to enlarging the comprehensive
partnership agreed to in 2013. lt also signifies a growing convergence of strategic
interests - opposing proliferation on the Korean Peninsula, countering terrorism,
maritime security in the South China Sea, Vietnam's participation in UN
peacekeeping. Each side has issues it wants the other to address. Vietnam wants the
United States to continue to fund programs that address the legacies of the Vietnam
War such as unexplored ordnance and dioxin (Agent Orange) poisoning. Trump
wants Vietnam to address the trade imbalance and to make it easier for American
companies to do business in Vietnam. Both sides will accommodate the other, win-
win is not just a deal with Chinese characteristics.
Q2. How does Trump's engagement on human rights issues compare to Obama?
ANSWER: Trump and Prime Minister Nguyen Xuan Phuc addressed human rights in
their May 31st joint statement. Human rights was the last of nine chapters in the
2013 joint statement on comprehensive partnership. Trump has addressed human
rights issues selectively and transactionally for political advantage: attacks on the
Assad regime in Syria, criticism of Venezuela, and most notably North Korea in his
address in Da Nang. The bilateral human rights dialogue begun under Obama will
continue. But a meeting by Trump with civil society activists probably never even
featured in advance planning for Trump's trip.

Suggested citation: Carlyle A. Thayer, "Vietnam: Significance of Trump Official Visit"

Thayer Consultancy Bockground Brief, November LL,20L7. 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.
 Thayer Consultancy Background Briefing:
ABN # 65 648 097 123
Vietnam Hosts Trump and Xi:
Challenges & Opportunities

Carlyle A. Thayer
November L2,2017

We request your assessment of Vietnam-US and Vietnam-China ties (the meaning,

most outstanding points, future forecast)
ANSWER: The APEC leaders' summit has now concluded and both presidents Donald
Trump and Xi Jinping have paid official visits to Hanoi to meet with Vietnam's top
leaders. Vietnam is now on notice that there will be continued friction as well as
cooperation between Washington and Beijing mainly focused on different
approaches to trade and how to prevent nuclear proliferation in North Korea.
Tensions on the trade front could rise if North Korea tests another ballistic missile.
Trump mistakenly believes China holds the key to Kim Jong-un's behavior.
Vietnam faces some challenges but also opportunities on the economic front.
President Trump has pushed high-standard bilateral free trade agreements (FTA).
This provides Vietnam with an opportunity to reach a reciprocal agreement to
continue to gain access to the American market at lower tariffs and perhaps achieve
market economy status in the future.
At the same time, Vietnam can continue to participate in the discussions on the
renamed Comprehensive and Progressive Trans Pacific Partnership with the aim of
getting lower tariffs from the other ten members. Also, Vietnam can continue down
the track and participate in negotiations for the Regional Comprehensive Economic
Partnership backed by ASEAN and Xi Jinping.
Vietnam can take advantage of the willingness of Trump and Xi, respectively, to
expand their bilateral comprehensive partnership and comprehensive strategic
cooperative partnership, with Vietnam. Vietnam can benefit from more involvement
by American companies operating in the domestic market and benefit from Chinese
investment in Vietnam under the Belt and Road lnitiative.
Vietnam is not faced with an either/or choice. Any bilateral trade agreement with
the United States will take a long time, especially as Trump Administration officials
have revealed that there are not enough trade negotiators to do too many FTAs at
the same time.
Vietnam and the United States share a convergence of strategic outlook on the
South China Sea and Vietnam can expect the U.S. Navy to maintain a continuous
 2

presence in the region. Vietnam should thank Trump for his offer to mediate on the
South China Sea issue but let this offer stay on the table.
Vietnam and US defence relations can grow at a pace confortable to Hanoi under the
new three-year MOU. Trump's offer to sell missiles to Vietnam should be quietly
explored bearing in mind the cost and reaction by China.
Of course the ASEAN summits and the East Asian Summit are about to take place.
Once they are over it will be clear how ASEAN, China and the United States will act in
the coming period over disputes in the South China Sea. Discussion on the Code of
Conduct should serve to dampen China's assertiveness for the moment.

Suggested citation: Carlyle A. Thayer, "Vietnam Hosts Trump and Xi: Challenges &
Opportunities," Thoyer Consultancy Bockground Brief, November L2, 20L7. 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.
 2

presence in the region. Vietnam should thank Trump for his offer to mediate on the
South China Sea issue but let this offer stay on the table.
Vietnam and US defence relations can grow at a pace confortable to Hanoi under the
new three-year MOU. Trump's offer to sell missiles to Vietnam should be quietly
explored bearing in mind the cost and reaction by China.
Of course the ASEAN summits and the East Asian Summit are about to take place.
Once they are over it will be clear how ASEAN, China and the United States will act in
the coming period over disputes in the South China Sea. Discussion on the Code of
Conduct should serve to dampen China's assertiveness for the moment.

Suggested citation: Carlyle A. Thayer, "Vietnam Hosts Trump and Xi: Challenges &
Opportunities," Thayer Consultoncy Bockground Brief, November 12, 2077. 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 in2OO2.
 Thayer Consultancy Background Briefing:
ABN # 65 648 097 123
Vietnam: Assessing the
Significance of Trump's Visit

Carlyle A. Thayer
November 13, 2017

Question L: President Donald Trump' visit to Vietnam was made in the first year of
his presidential term and in the context that the comprehensive partnership
between Vietnam and the United States has seen positive development, especially
after the successful official visit of Prim Minister Nguyen Xuan Phuc to the U.S. in
May. What is the significance of the President Trump's visit to Vietnam for relations
with the United States?
ANSWER: The significance of President Trump's visit is that he decided to make a
separate official visit to Hanoi after his attendance at the APEC Summit in Da Nang.
Trump's visit is being touted by Administration spokespersons as the longest trip by
an American president in many years and it is well-known that Trump complained
that it was too long. He initially withdrew from the East Asian Summit and then
decided to extend his visit to attend. There was never any question that Trump
wouldn't honour his commitment to make an official visit to Vietnam. ln other
words, President Trump acknowledged the importance of Vietnam in regional affairs
and his approval to expand the comprehensive partnership. This is a development of
strategic importance to Vietnam and Southeast Asia.
Question 2: Attending the Asia Pacific Economic Cooperation or APEC summit and
having an official state visit to Vietnam is considered a "two-in-one" visit by
President Trump. What is your assessment? ls this a success for Vietnam's
diplomacy?
ANSWER: Absolutely. Vietnam was very quick to make contact with president-elect
Trump when Prime Minister Nguyen Xuan Phuc called him to offer congratulations.
Later, as the result of work between Ambassador Pham Quang Vinh in Washington
and Ambassador Ted Osius in Hanoi, Prime Minister Phuc was the first head of
government from Southeast Asia to be received by President Trump at the White
House. This resulted in a very detailed joint statement reaffirming the commitment
by both leaders to enlarge the comprehensive partnership and this was reinforced
when Trump met with Vietnam's top leaders in Hanoi. The success of Vietnamese
diplomacy is clear, after APEC presidents Trump and Xi both visited Hanoi as well as
the government leaders from Canada (that resulted in an agreement on a strategic
partnership) and Chile.
 2

Question 3: What is President Trump's message to the region in his speech at the
APEC CEO Forum in Da Nang? ls "lndo-Pacific", the new term Trump is using to refer
to Asia in his speech a larger "strategic system" in U.S .policy?
ANSWER: Trump's main message to APEC was that the United States would no
longer support or become involved in multilateral trade agreements. Trump
unequivocally argued that all trade agreements must be fair and reciprocal and on a
bilateral basis.
The idea of an lndo-Pacific Region is not new. lt was first proposed by Prime Minister
Shinzo Abe in 2007. He repeated it when he returned to power and raised it with
lndia and Australia. The lndo-Pacific Region has been used by defence planners in
the U.S. and Australia over the past three-four years. lt reflects the importance of
the maritime domain and the linkage of the Western Pacific-South China Sea-lndian
Ocean. This geographic region lies in the area of operations of the U.S. Pacific
Command.
The most recent iteration of lndo-Pacific has been encouraged by Prime Minister
Modi who shifted lndia's policy of Look East to Act East. And Secretary of State Rex
Tillerson gave support to the term lndo-Pacific during his recent visit to lndia.

Question 4: What is your assessment about the last step in promoting the Trans
Pacific Partnership (TPP) trade deal without the US after eleven nations have agreed
in principle in a closed door meeting on sidelines of the APEC summit? And what will
come next?
ANSWER: The original TPP was an agreement between developed and developing
- -
countries. The developed countries the United States in particular wanted high
standard in services, intellectual property rights, environment, and labour rights not
normally a part of free trade agreement. The developing countries * Vietnam in
particular - wanted market access. Now that the U.S. has withdrawn, the remaining
eleven members have agreed to proceed with a Comprehensive and Progressive
TPP. This means the original agreement must be rewritten and the terms of trade
adjusted to suit the interests of both developing and developed countries. Japan and
Australia would like the CPTPP to be drawn up in such a way that the United States
could join at a later date. We will see further negotiations in 2018.

Question 5. What is your assessment about the prospects for the Vietnam - U.S.
relations after President Trump's visit?
ANSWER: ln 2OL7 we have witnessed two high-level meetings between Vietnam and
the United States. lt is clear that both sides are fully committed to enlarging the
comprehensive partnership. Vietnam can now be reassured of continued
engagement by the Trump Administration. This commitment will be reciprocal.
Vietnam must negotiate hard for a free trade agreement under the structure of the
Trade lnvestment Framework Agreement. Both sides will step up cooperation in
science and technology, education, people-to-people exchanges and other areas.
The U.S. will continue to support capacity building in Vietnam for maritime security.
And defence relations will continue under a new three-year indicative plan. Vietnam
now ranks only second to Singapore in Southeast Asia in the closeness of ties with
the United States.
Suggested citation: Carlyle A. Thayer, "Vietnam: Assessing the Significance of
Trump's Visit " Thoyer Consultoncy Background Brief, November t3,20t7. 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 in2OO2.

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