Vietnam has abandoned plans to ratify the Trans-Pacific Partnership trade pact following the election of Donald Trump, the first in a series of likely repercussions on relations between Hanoi and Washington.
The Prime Minister, Nguyen Xuan Phuc, told the National Assembly that the TPP would not be sent for ratification.
“The United States has announced it suspends the submission of TPP…so there are not sufficient conditions for Vietnam to submit its proposal for ratification,” he said in response to a question at the assembly session in Hanoi.
Some signatories to the pact had hoped that President Obama would send the TPP for ratification before the inauguration of the next president in January, despite the stated opposition of both major candidates.
However, the victory of Donald Trump, who aggressively denounced the pact on the campaign trail, made such a move untenable.
Mr Phuc said Vietnam would continue to integrate its economy with the eleven other signatories whether or not the TPP passed in its current form, and would continue to develop close ties with the US.
The best outcome it can hope for, say analysts, is a renegotiation of the agreement, which is hardly considered likely given the protectionist sentiments repeatedly expressed by the president-elect.
The failure of the TPP comes as an unwelcome setback for Vietnam, and not just in the economic sphere.
Vietnam was seen as the country with most to gain from the agreement, gaining an advantage over regional competitors by acquiring privileged access to the giant US and Japanese markets.
The pact’s apparent failure also delivers a heavy blow to the nascent labour movement in Vietnam, which had been guaranteed free and independent trade unions under a bilateral annex signed by the US and Vietnam.
The hope that American officials would have some oversight over the treatment of labour activists in Vietnam also gave hope to the broader pro-democracy and reform movement.
Tirades of protectionist rhetoric
Despite the concession over labour rights, and some initial ideologically based hesitation, the Communist party hierarchy had embraced the TPP enthusiastically, and not just for the economic benefits it would bring in increased foreign direct investment and exports.
The TPP represented a key pillar of President Obama’s “pivot to Asia” or “rebalancing” as it was later called; a clear move to confront the growing economic and strategic dominance of China.
The United States now appears to be confirming the fears of many, and the calculations of Beijing, that it is an inconsistent and unreliable partner.
China is now in a stronger position than ever to push its own regional trade pact, the Regional Comprehensive Economic Partnership (RCEP), long seen as a rival of the TPP.
Vietnam will be following the transition period in the United States with some apprehension.
It has skilfully balanced its relations between Beijing and Washington to strengthen its strategic position and show its resolve to resist China’s expansion in the South China Sea.
Virtually nothing is known about Mr Trump’s real intentions in foreign policy and a prolonged period of uncertainty now looks inevitable.
The only guide the Vietnamese and others have to go on, for now, are the tirades of isolationist and protectionist rhetoric the winning candidate vented so enthusiastically during the campaign.