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Trade, Security Issues to Dominate Vietnam’s ASEAN Tenure

FILE - Vietnam's Prime Minister Nguyen Xuan Phuc takes the gavel from Thai Prime Minister Prayuth Chan-Ocha who hands over the ASEAN chairmanship to Vietnam during the closing ceremony of the 35th ASEAN Summit and related summits in Bangkok, Nov. 4, 2019.
FILE - Vietnam's Prime Minister Nguyen Xuan Phuc takes the gavel from Thai Prime Minister Prayuth Chan-Ocha who hands over the ASEAN chairmanship to Vietnam during the closing ceremony of the 35th ASEAN Summit and related summits in Bangkok, Nov. 4, 2019.

Vietnam chairs the Association of Southeast Asian Nations, or ASEAN, this year, with trade and security expected to top the agenda. Analysts say that as Vietnam builds on its success at hosting international gatherings, like the U.S.-North Korea summit in 2019, its success may be tempered by challenges like the coronavirus outbreak and the need for consensus in ASEAN.

Of several announced priorities for Hanoi's ASEAN chairmanship, the two areas where observers expect the bloc to make the most progress are on economic and defense cooperation. Other objectives include increasing the level of solidarity among the 10 member states and raising the global awareness of ASEAN as a regional bloc of 600 million people.

Historically, ASEAN has struggled to issue group decisions because its model of unanimity allows each member a de facto veto, according to Richard Javad Heydarian, a political science professor at De La Salle University in the Philippines. This is particularly true of thorny issues like refugee policies or the Rohingya crisis, as thousands of Muslim Rohingya have fled violence in Myanmar for refuge in Bangladesh.

So supporters have turned to areas where they have a better chance of getting results, namely, in trade. Members succeeded in forming the ASEAN Economic Community in 2016 and followed through on decreasing tariffs and allowing citizens to move across one another’s borders to work. This year, Vietnam said it will push for more tariff reductions, including making its own sacrifice of dropping sugar tariffs, an important industry for domestic firms.


This resolve to conduct more trade in the region has made foreign investors optimistic about Southeast Asia, said Eduardo Pedrosa, secretary general of the nonprofit Pacific Economic Cooperation Council.

“We believe this [optimism] is because there is strong momentum towards integration in the region with the ASEAN economic community,” he said.

As the rotating ASEAN chair, Vietnam will probably have more luck in pushing trade than did the 2019 chair, Thailand, according to Chen Chen Lee, associate director at the Singapore Institute of International Affairs.

She noted that Thailand was particularly preoccupied with domestic politics last year, given that it held its first national election since the military coup of 2014. By contrast, she said, Vietnam has a stable one-party government, and it has shown that economics is a priority by signing more trade agreements than any of its neighbors.

“Vietnam’s chairmanship of the grouping in 2020 has the potential to continue with ASEAN’s constructive role in deepening trade integration,” Lee wrote in a blog post for the University of Melbourne. Jocot De Dios, managing director for government affairs and policy at General Electric Asia Pacific, is part of a business council working with Vietnam to hold exchanges among corporate and government officials. He expressed optimism that as chair, Vietnam’s emphasis on the economy would strengthen ASEAN, “especially given the current instability in global trade.”


While most member states say they want to do more trade, it is much harder for them to reach consensus on another issue, defense. ASEAN does not constitute a military alliance; however, on issues like sovereignty in the South China Sea, analysts say the odds are higher this year for making progress on a code of conduct at sea.

Several ASEAN members claim parts of the South China Sea, but the one that has most vigorously voiced its claims is the current chair, Vietnam. That is a departure from past years, such as in 2019, when the bloc was chaired by Thailand, which does not lay claim to the sea, or when it was chaired by Laos, which was less willing to assert the region’s claims against China.

Hanoi has all the more reason to rally its neighbors around a code of conduct, after Beijing made repeated incursions into the South China Sea last year. Vietnam is also bolstered by its relationship with the United States, which appears to be closer than ever and which also wants to ensure no single power dominates the sea.

The U.S. sent an aircraft carrier to Vietnam last week for a major port call, only the second time it has done so, signaling closer ties.

After the port call, the commander of the U.S. Pacific Fleet, John Aquilino said it strengthened the relationship between the two nations, and that he looked forward to having more such events. When asked about Chinese moves to control the South China Sea, he said, “The U.S. will sail, steam, or fly anywhere international law allows, anytime.”

He also expressed support for Vietnam’s claims, saying, “The United States stands by Vietnam as it upholds its sovereignty and independence.”


The ASEAN chair’s ability to increase cooperation will be out of its hands, particularly amid the COVID-19 epidemic, analysts say.

The spread of the infection from China meant some benefits for ASEAN, such as investors wanting to diversify to decrease reliance on China; however, there have been more harmful impacts, as a decrease in Chinese tourism and trade hurts Southeast Asia.

Most governments in the region have introduced fiscal aid for workers and businesses, as well as travel restrictions. The decreased travel may also make it harder for Vietnam to host ASEAN events throughout 2020.

Moody's Investors Service said these impacts will exacerbate problems already in Asia. For instance, it noted existing demographic challenges to Thailand's economy, which has an aging population and worker shortage, and that COVID-19 won’t help.

“The outbreak of the coronavirus has added a further dent to growth prospects at a time when economic growth trajectories throughout the region were already declining," Deborah Tan, assistant vice president at the company, said.

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