What to Expect from the Vietnam–South Korea Comprehensive Strategic Partnership

HISTORICAL BACKGROUND

Vietnam–Korea relations have a long history. Records of early interactions between the two peoples date back to the 13^th century when Vietnamese Prince Ly Long Tuong of the Ly Dynasty migrated to Korea and joined forces with the ruling Goryo Dynasty of Korea to fight against two Mongolian invasions. From the 16^th to the 19^th century, Korean and Vietnamese envoys exchanged poems during tributary missions to Ming-Qing China. During the colonial period, patriotic intellectuals and revolutionaries from Korea and Vietnam conducted exchanges and published books on the history of their nations “to learn lessons and to enlighten their peoples” while sharing “sympathies as enslaved peoples”.

During the Cold War, Korea and Vietnam were both victims of great-power politics. Korea was divided into North and South in 1953, and Vietnam underwent the same fate in 1954, shortly after which the Vietnam War began. The Vietnam War was a tragic watershed in the relations between the Republic of Korea (ROK) and Vietnam. From 1964 to 1973, South Korea—as an American ally—deployed over 300,000 troops to Vietnam to fight alongside the US against North Vietnam. Hostilities persisted even after the war ended in April 1975. In July 1978, diplomats from South Korea, North Korea and Vietnam engaged in trilateral negotiations on the release of three South Korean diplomats still detained in Saigon. These failed, and the issue was only resolved in April 1980.

Despite the lack of official engagements, South Korea’s economic success began to catch Vietnam’s attention in the late 1980s. With the launch of the Đổi Mới (Renovation) policy in 1986, Vietnam became interested in studying the South Korean experience in development. At a CPV Central Committee meeting in April 1986, Truong Chinh, then-Chairman of the State Council, expressed deep appreciation for South Korea, which, according to him, “became an industrialized country despite gaining little FDI inflows”. In 1988, the Vietnamese Central Institute for Economic Management published a book titled “The South Korean Economy”, lauding Seoul’s industrialization model.

On the diplomatic front, the 1988 Seoul Olympics Games facilitated the ROK-Vietnam rapprochement by allowing a Vietnamese delegation to conduct unofficial exchanges with their South Korean counterparts. Thanks to “Olympics diplomacy” and the visits of Vietnamese officials such as Nguyen Xuan Oanh, Chairman of the Economic Office under Ho Chi Minh City Party Secretary (Văn phòng Kinh tế của Bí thư Thành ủy), and Vu Tuan, Vietnam’s Minister of Light Industry, to South Korea from 1987 to 1989, bilateral relations became warmer. In 1990, the two countries began full-scale negotiations toward diplomatic normalization.

However, Vietnam’s military intervention in Cambodia remained a major hurdle. The then-South Korean Foreign Minister, Lee Sang-ok, stated that a political settlement of the Cambodian issue should be achieved before the normalization of bilateral relations could happen. Seoul’s concern dissipated after the Paris Peace Agreement on Cambodia was signed in 1991. Several subsequent developments were also conducive to the ROK-Vietnam relations. These were the Sino-Vietnamese diplomatic normalization achieved in November 1991, the positive progress in US-Vietnam ties, and the improved relations between Vietnam and ASEAN member states. Vietnam’s diplomatic advancements and economic reforms strengthened the ROK’s resolve to normalize ties with Hanoi.

On 22 December 1992, the ROK and Vietnam signed a joint statement to establish full diplomatic relations. This important milestone largely aligned with the two countries’ mutual economic and geopolitical interests in the post-Cold War era. On the part of Vietnam, its economic interests and foreign policy of “diversification and multilateralization” served as the basis for cultivating ties with Seoul.

In 2002, the ROK and Vietnam upgraded their relationship to a “comprehensive partnership in the 21st century”. They further elevated ties to the level of a “strategic cooperative partnership” in 2009. Most recently, the two countries announced the establishment of a comprehensive strategic partnership during a visit by Vietnamese President Nguyen Xuan Phuc to Seoul in December 2022.

THE COMPREHENSIVE FOUNDATION FOR BILATERAL TIES

The current relationship between Vietnam and South Korea has been built on a solid foundation based on the strengthening of mutual trust, growing people-to-people ties, and robust economic cooperation.

Even during the Covid-19 pandemic, Seoul and Hanoi continued their efforts to cultivate mutual trust. For example, bilateral parliamentarian cooperation reached a new height, with reciprocal visits in 2021 by Park Byeong-seug, Speaker of the ROK’s National Assembly, and Vuong Dinh Hue, Chairman of the Vietnamese National Assembly. Their visits resulted in an agreement to conduct high-level exchanges by establishing friendship groups of young and female parliamentarians.As of February 2022, the ROK had donated 1.4 million Covid-19 vaccine doses to Vietnam, while South Korean firms and friendship organizations had contributed more than US$20 million to Vietnam’s Covid-19 Vaccine Fund. Meanwhile, Vietnam’s export of 200 tons of urea, though modest, contributed to South Korea’s efforts to deal with China’s urea export restrictions that began in mid-October 2021. Vietnamese leaders have also held direct talks with Korean firms to exchange views on Vietnam’s investment policies, and Vietnamese local authorities have actively extended support to Korean firms operating in their localities.

People-to-people ties also enhance the resilience of the bilateral relationship. The Korean community in Vietnam comprises more than 7,000 companies and 180,000 expatriates, while there are 240,000 Vietnamese living in South Korea. Korean-Vietnamese multicultural families are considered “public diplomatic messengers”, who have contributed to the strengthening of bilateral ties. Hallyu (한류), or the Korean Wave, characterized by the promotion of Korean popular culture, has been growing popular in Vietnam, particularly among those in their 20s and 30s. Some Korean cultural products, such as TV drama series, are well received by Vietnamese audiences. Additionally, the influence and popularity of Park Hang-seo, the South Korean head coach of the Vietnamese national football team (2018-2023), have contributed to Vietnamese people’s positive perception of South Korea.

Robust economic cooperation has served as the backbone of the Vietnam-South Korea relationship, with the Vietnam-Korea Free Trade Agreement (VKFTA), which took effect in December 2015, playing an important role. As of end-2021, South Korea was Vietnam’s largest foreign investor, with the accumulative registered capital reaching US$78.5 billion. Korea’s investments cover a wide range of economic sectors, ranging from processing and manufacturing to real estate, retail and construction. With a population of more than 99 million people and an average GDP growth rate of 5.33 percent in the period 2017-2021, Vietnam is an ideal gateway for Korean investors to expand into Southeast Asia, especially the Mekong subregion.

Enhancing economic ties with South Korea helps Vietnam reduce trade dependence on China, which is seen by some Vietnamese policymakers as a security issue, given the South China Sea dispute between the two countries. South Korea is currently Vietnam’s third-largest export market, after America and China, with an export turnover of US$21.95 billion in 2021. Vietnam ran a trade deficit of US$34.25 billion with South Korea in 2022 following the setting up of operations there by major Korean firms. However, this is not seen as a major issue as the majority of Vietnam’s imports from the ROK are production materials and inputs rather than consumer goods.

South Korea is currently Vietnam’s third-largest export market, after America and China, with an export turnover of US$21.95 billion in 2021.

South Korea’s leading chaebols such as Samsung, SK, LG, Lotte and Hyundai have expanded their operations in Vietnam, helping to deepen Seoul’s economic linkage with Hanoi. For example, Samsung—Vietnam’s biggest foreign direct investor—has invested US$18 billion in Vietnam, and has plans to increase the investment to US$20 billion. The trend of South Korean companies relocating their manufacturing facilities to Vietnam has accelerated in recent years, partly due to their efforts to diversify away from China amidst disruptions caused by the US-China trade war. Vietnam’s stable economic environment and conducive foreign direct investment policies have turned the country into a preferred choice for Korean investors.

Burgeoning bilateral economic ties have also been facilitated by South Korea’s New Southern Policy (NSP) – which was launched by former President Moon Jae-in to cultivate the ROK’s ties with ASEAN member states and India to reach the same level that the country maintains with the US, China, Japan and Russia. Vietnam has been hailed as the centrepiece of the NSP. In the words of former President Moon Jae-in, Korea’s relations with ASEAN are “indispensable for our prosperity and peace, and Vietnam is at the center of that relationship”. Some scholars even branded Moon’s NSP as the “New Vietnam Strategy”.

ADDING SUBSTANCE TO THE NEW COMPREHENSIVE STRATEGIC PARTNERSHIP

With the two countries announcing their comprehensive strategic partnership (CSP) in December 2022, South Korea has become the first middle power to have a CSP with Vietnam. Previously, Vietnam only had CSPs with three major powers, namely China (2008), Russia (2012), and India (2016). The upgrade of the ROK-Vietnam relationship to a CSP shows that South Korea is among Vietnam’s most vital partners.

Under the new CSP framework, leaders from both sides have agreed to intensify their collaboration in the areas of maritime security, national defence, and the defence industry. Since 2012, the two countries have held annual bilateral defence dialogues to foster mutual understanding and promote joint actions in addressing common security challenges, such as maritime and aviation security, as well as nuclear threats in the Korean peninsula. In 2021, Seoul and Hanoi vowed to uplift cooperation in maritime security, arms production, and defence education and training. South Korea helped Vietnam strengthen its naval capabilities by transferring two second-hand Pohang-class corvettes to the Vietnam People’s Navy. South Korean Navy’s destroyers also made three port calls to Da Nang in 2017, 2018 and 2019, and participated in communication exercises with the Vietnamese Navy. Humanitarian assistance and disaster relief activities, as well as search and rescue operations, are also noteworthy areas of bilateral security cooperation, as stated in the Vietnam-South Korea Joint Vision Statement on Defence Cooperation with a vision towards 2030.

South Korea now ranks third among Vietnam’s top five major arms suppliers (after Russia and Israel), accounting for 6.6 percent of Vietnam’s arms imports in the period 2017-2021. As Vietnam is seeking to reduce its arms dependence on Russia, there is an opportunity for South Korea to become a reliable arms partner for Vietnam. At the 10^th senior-level defence dialogue in September 2022, Seoul and Hanoi also pledged to boost ties in arms industry.

South Korea now ranks third among Vietnam’s top five major arms suppliers (after Russia and Israel), accounting for 6.6 percent of Vietnam’s arms imports in the period 2017-2021

Among the South Korean defence hardware that Vietnam may be interested in are the KF-21 supersonic fighter jets which are reportedly “fairly affordable”. In seeking potential deals, Hanoi could benefit from Seoul’s coordinated policies to support customers through “loans, repayment flexibility, outgoing offset packages, technology transfers, investments and industrial collaboration in sectors that often go beyond defence”. Another relatively easy measure for South Korea to step up defence ties with Vietnam is to increase its naval visits to Vietnam. Such visits, when conducted frequently, could help promote the ROK’s engagement with Vietnamese leaders and local communities while underscoring the bilateral commitment to boosting defence cooperation. Seoul should also consider Hanoi’s recent request for another corvette transfer, a move that will not only help strengthen bilateral naval relations but also incentivize Vietnamese defence planners to consider serious arms deals with Seoul in the future.

It should be noted that the new CSP framework between Vietnam and South Korea is not limited to defence and strategic cooperation only. It also covers cooperation in other fields that are strategically significant for both countries, including in the economic and technological domains. For example, to navigate global supply chain disruptions, the ROK pledges to work with Vietnam to develop the latter’s rare earth mineral industry, while Hanoi looks to deepen its cooperation with Seoul on “chip, battery, and auto production”.

According to South Korean President Yoon Suk-yeol, Vietnam “is a core partnering nation in South Korea’s Indo-Pacific strategy and the Korea-ASEAN Solidarity Initiative”. President Yoon also stated that South Korea would closely collaborate with Vietnam to promote Korea-ASEAN and Korea-Mekong cooperation. With this vision, Hanoi will likely continue to play a prominent role in Seoul’s Southeast Asia policy going forward.

However, obstacles also lie ahead for the bilateral relationship. For example, although bilateral security and defence ties have been strengthened, they are still modest, while joint activities have not been well institutionalized and thus remain infrequent and inconsistent. At the same time, although South Korea’s defence industry could benefit from Vietnam’s push for military modernization and arms diversification, the two countries’ military industrial cooperation remains limited.

Meanwhile, the idea of amplifying defence and maritime exchanges has become prominent in bilateral discussions, but neither side has elaborated on any additional steps or details, such as the frequency of interactions or topics to be covered, to actualize this vision. Seoul and Hanoi should develop concrete plans for advancing their cooperation.

The two countries should also reframe their partnership to better reflect their growing role and status, as well as their shared interests, particularly in promoting regional security, stability, and a rules-based order. The question is, how should the upgraded relationship be reframed? One way for them to do so is to frame their relationship as middle powers joining hands to forge multilateralism in the Indo-Pacific. In February 2022, Vietnamese Ambassador to South Korea Nguyen Vu Tung stated that Vietnam and South Korea have long promoted multilateralism, especially based on the perspective and interests of middle powers, and enhanced the vitality of multilateral cooperation mechanisms, including ASEAN. The two countries should work together to further promote such a joint vision, which will not only help strengthen bilateral ties and promote the two countries’ interests, but also contribute to the rules-based order and to cooperative multilateralism in the Indo-Pacific region.

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This is an adapted version of ISEAS Perspective 2023/04 published on 30 January 2023. The paper and its references can be accessed at this link.