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Global Insider: Vietnam-Philippines Relations

By The Editors | 11 Nov 2011 Philippine President Benigno Aquino and Vietnamese President Truong Tan Sang signed an agreement last month to allow the two countries navies and coast guards to better monitor foreign incursions in the waters around the disputed Spratly Islands. In an email interview, Carlyle A. Thayer, an emeritus professor at the University of New South Wales at the Australian Defense Force Academy, discussed VietnamPhilippines relations. WPR: What is the recent trajectory of Vietnam-Philippines diplomatic and trade relations? Carlyle A. Thayer: Vietnam and the Philippines were on opposing sides during the Vietnam War. They exchanged diplomatic relations in July 1976, but political and economic ties remained minimal even after Vietnam joined the Association of Southeast Asian Nations (ASEAN) in 1995. Two-way bilateral trade stood at only $541 million in 2000. Relations began to develop after adoption of the Framework on Bilateral Cooperation in the Next Quarter Century and Beyond in 2002. Bilateral trade reached $1 billion in 2005 and $2.2 billion in 2008. The trade balance is weighted heavily in Vietnams favor. The Philippines imports 2 million tons of rice annually in addition to coffee and electronic components. The Philippines exports chemical fertilizers, minerals, oil and gas and electronic components. Investment is extremely modest. In 2009 the Philippines ranked 26th on Vietnams investment ladder, with 43 projects and a total capitalization of $300 million. Vietnamese investment in the Philippines is negligible. WPR: How have the disputes over the Spratly Islands and the South China Sea impacted relations? Thayer: Vietnam and the Philippines have overlapping territorial claims in the South China Sea. In 2005, when the national oil companies of China and the Philippines reached agreement to undertake a joint seismic survey, Vietnam initially protested. Vietnam later joined in, but the trilateral agreement lapsed in 2008. The two countries have been brought closer together in the face of increasing Chinese assertiveness in the South China Sea. This year, Chinese civilian maritime enforcement ships have been involved in a number of aggressive assertions of sovereignty, including interfering in the lawful commercial activities of Philippine and Vietnamese exploration vessels operating in their own waters. The Philippines was so angered that it officially renamed the South China Sea the West Philippine Sea and lodged a protest with the United Nations. Both the Philippines and Vietnam lodged complaints with China but to no avail. Both countries then moved to shore up their bilateral relations. WPR: What are the main areas of potential cooperation moving forward, and what are some of the obstacles to closer ties?

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Thayer: Bilateral cooperation on South China Sea issues will feature prominently. In October, the two presidents agreed to a Joint Action Plan for 2011-2016, including cooperation on political, defense and security matters, among others. They also agreed step up cooperation between their two navies and between the Philippine coast guard and Vietnams marine police. Vietnam also endorsed a diplomatic initiative by Philippine President Benigno Aquino to create a Zone of Peace, Freedom, Friendship and Cooperation in the South China Sea. The two presidents did not feel that the bilateral relationship had developed sufficient depth to declare a formal strategic partnership. Two key issues include the current trade imbalance and lack of Vietnamese investment. Both sides now aim to reach a target of $3 billion in two-way trade by 2015. Overall, however, the Philippines and Vietnam will continue to coordinate their external policies in ASEAN, the ASEAN Regional Forum, and other multilateral forums such as the Asia Pacific Economic Cooperation group.

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