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Philippines and Vietnam in the South China Sea: A Burgeoning Alliance

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It was bound to happen. For decades, the Philippines (liberal democracy) and Vietnam (communist) have developed a lukewarm partnership -- within the confines of regional bonds of solidarity -- despite the increasing convergence of their strategic interests. But as China steps up its territorial claims in the South China Sea, the two Southeast Asian countries have inched closer to a genuine alliance.

The recent meeting between Philippine President Benigno Aquino and Vietnamese Prime Minister Nguyen Tan Dung (May 21) saw "productive discussions" over establishing a bilateral strategic partnership, marking a critical step towards deepening economic and political cooperation between the two countries. Finally, they have decided to move from semi-passive neighborly relations to institutionalized strategic cooperation, especially in the realm of maritime security and regional stability.

Previously, the two countries adopted distinct approaches to managing their territorial disputes with China: In recent years, the Philippines has opted for a combination of confrontational language and high-profile legal protestation, anchored by deepening military alliance with Washington, while Vietnam has largely relied on low-key, patient bilateral diplomacy to push for joint-development schemes with China. When the Philippines decided to file an arbitration case against China before a special United Nations (UN) Arbitral Tribunal in The Hague, Vietnam was conspicuously quiet.

However, China's recent decision to unilaterally dispatch a giant oil rig to Vietnam's 200-nautical-miles Exclusive Economic Zone (EEZ), which led to a nail biting showdown between Vietnamese and Chinese naval forces and massive anti-China protests in Hanoi, has changed the complexion of regional diplomatic calculations. Even the ASEAN couldn't hide its panic in the recently-concluded summit in Myanmar. So Vietnam has decided to move closer to the Philippines' position, with Hanoi now also threatening to file a similar legal complaint against China.

Deepening partnership between the two countries has paved the way for the emergence of a "security diamond" of like-minded states in the Western Pacific, especially as Japan, Australia, and India step up their counter-measures against rising Chinese maritime assertiveness in the Pacific waters.

From Rivalry to Synergy

During the Cold War, the Philippines and (North) Vietnam were placed in ideological opposition, as the U.S. and Soviet Union directed their Southeast Asian allies against each other. The two countries also competed for a myriad of contested islands in the Spratly chain of islands in the South China Sea. The end of the Cold War, in turn, saw the emergence of the Philippines and (united) Vietnam as competitors in a new age of economic globalization, as the two economies fought for a greater share of Foreign Direct Investments (FDI), especially in the realm of low-cost manufacturing.

Nonetheless, the Philippines welcomed the integration of Vietnam as an integral member of the Association of Southeast Asian Nations (ASEAN). Filipino policy-makers believed that Vietnam's integration into existing regional mechanisms would transform the communist country into a partner for stability and prosperity in East Asia, putting a definitive end to a bitter history of Cold War rivalries in the Indo-China theater. And they were correct in that assumption.

Leveraging its cheap labor, strategic developmental policies, and regulatory stability, Vietnam managed to outshine ASEAN countries such as the Philippines in the aftermath of the 1997 Asian Financial Crisis. Up until the 2007-08 Great Recession, Vietnam was largely seen as the "Little China" of global manufacturing, as the medium-sized Southeast Asian country attracted one of the largest amounts of FDI (as a share of GDP) in modern history. Rising production costs and widespread labor unrest in neighboring China also encouraged massive relocation of Chinese production facilities to Vietnam.

No wonder, the Obama administration saw Vietnam as a perfect partner in its pan-regional Trans-Pacific Partnership (TPP) free trade agreement. Vietnam was increasingly seen as a serious economic player in Asia. Naturally, many in the Philippines were worried about being left behind by another neighboring country, just as Indonesia, Thailand, Malaysia, Singapore, Taiwan and South Korea managed to do in preceding decades. As the Philippines struggled to attract FDI, and witnessed the relocation of multinational companies to its neighbors, Vietnam seemed to be poised for turbo-charged industrialization, thanks to massive inflow of investments from Japan, Taiwan, Singapore, China, and South Korea.

More than five years after the Great Recession, the Philippines has emerged as an increasingly confident emerging market, thanks to an unprecedented period of political stability and above-average growth amid stable inflation and interest rates. As the new toast of the town among global investors, the Philippines hosted the 2014 World Economic Forum (WEF) on East Asia, formally announcing its arrival on world stage. Meanwhile, Vietnam has been struggling with rising inflation, economic slow-down, and growing anxieties among foreign investors, largely due to the recent anti-China protests, which ended up in massive destruction of factories owned by, among others, China and Taiwan.

As the Philippines overcomes its economic insecurities, and achieves a more balanced competition with its neighbors, the scope (and vision) for cooperation with fellow ASEAN members has expanded. The Philippines is no longer just obsessed with attracting more investments and strategic support from Pacific powers such as the U.S., Australia, Japan, and South Korea, but it is also reaching out to smaller neighbors with similar interests.

The Perfect Alliance

In light of the intensifying territorial disputes in the South China Sea, Vietnam represents a perfect partner for the Philippines, and vice-versa.

As influential members of the ASEAN, the two countries have been concerned with the lack of a unified regional response to China's growing assertiveness in the Western Pacific. Despite a decade-long agreement on developing a robust maritime conflict-prevention mechanism, the ASEAN has yet to finalize a legally-binding Code of Conduct (CoC) with China. So greater diplomatic coordination and strategic engagement between the two countries has become indispensable to establishing greater synergy within the ASEAN. The two countries can no longer afford to simply chart their own independent paths, since maximum coordination has become a strategic imperative.

Together, the two countries also hope to bring other claimant states such as Malaysia on board. So far, Malaysia has agreed to participate in trilateral dialogues with Vietnam and the Philippines to forge a common approach to the South China Sea disputes. The ASEAN's informal leader, Indonesia, has also moved closer to Vietnam and the Philippines. In recent months, Jakarta has openly criticized China's notorious "nine-dash-line" doctrine as a quasi-legalistic claim with no basis in international law, while finalizing a new border agreement with Manila, ending two decades of territorial squabbles.

Beyond diplomatic coordination, the Philippines could also advice Vietnam on crafting a separate legal action against China. In this way, both Manila and Hanoi could utilize existing international arbitration mechanisms to undermine China's sweeping claims across the South China Sea. More importantly, the two countries are moving closer to establishing regularized joint-exercises among their maritime forces. Obviously, the way forward is to institutionalize various defense-related mechanisms such as deeper intelligence-sharing vis-à-vis developments in the South China Sea, annual exercises between Vietnamese and Filipino coast guard and naval forces, and regular high-level dialogue between the two countries' leaders, strategists, and eminent academics.

The greater salience of the burgeoning Philippine-Vietnam strategic alliance, however, is the potential consolidation of a network of alliances in the Pacific theater, largely led by Washington. As Japan astutely works around post-War constitutional restrictions to play an increasingly important military role in the region, Washington hopes that Tokyo can play a more visible role in enhancing the deterrence and maritime capabilities of weaker Southeast Asian states such as Vietnam and the Philippines.

By pushing for the doctrine of "collective self-defense", the Abe administration is paving the way for a more robust Japanese defense role in the region. After all, the ultimate aim is to allow Japanese Maritime Self Defense Forces (MSDF) to be in a position to assist American troops if a war were to erupt in the South China Sea, presumably between China and the Philippines, a U.S. treaty ally. As Japan relaxes self-imposed restrictions on defense exports, it is also in a position to provide more concrete military support for the Philippines and Vietnam.

Meanwhile, Australia and India have also emerged as (a more willing and capable) counterbalance to China's rising military profile. While Canberra has upgraded its joint-military exercises with Washington, with growing focus on maritime military operations, a new nationalist government in India, led by the charismatic Prime Minister Narendra Modi, is also expected to step up India's strategic footprint in Southeast Asia.

Overall, what is clear is that China's relentless territorial push into adjacent waters has inspired growing strategic cooperation among a wide range of like-minded states, which have sought to deter a large-scale military conflict across Sea lines of Communication (SLOC) by compensating for Washington's increasingly alarming strategic retrenchment in recent years.

The ultimate aim is not to contain China, which has become the pivot of economic prosperity in Asia, but to constrain the sharp edges of China's inexorable rise in recent decades.