EU and Vietnam: From A Parental to A Competitive Relationship?

This paper discusses the changing relationship between the EU and Vietnam, and asks whether there is a shift from a “parental” to a “competitive” relationship. The focus of the paper is on the shift from aid to trade as the main interface between the EU and Vietnam. Aid relationships are often understood as hierarchical, linking a benevolent donor to a needy recipient, whereas commercial relationships are typically expected to involve a more competitive relationship. However, we argue that the bilateral relationship was never a “parental” one, even at the time when Vietnam’s relation to the EU was limited to aid. The reason is largely Vietnam’s historical experiences from the aid relationship with the Soviet Union, which created dependence and eventually an economic crisis when aid flows dried up in the late 1980s. Instead, there has been substantial tension between the donor community and Vietnam during most of the period since the early 1990s, when aid flows from the EU started growing. Regarding trade relations, we note that the EU’s increasing use of antidumping tariffs against Vietnamese exporters during the past years could be an indication of a less friendly and more competitive attitude towards Vietnam. However, it is likely that the antidumping measures used by the EU are not primarily directed at Vietnam, but rather at China. This means that Vietnam is affected by the re-polarization of the world economy through its proximity to and links with China, but that the relation is perhaps not as bad as the increasingly frequent trade conflicts may suggest.