Prime Minister Scott Morrison has expressed serious concern over developments in the South China Sea as China and Vietnam remain locked in a tense stand-off.
Relations between Hanoi and Beijing have soured in recent weeks with a Chinese oil exploration ship and its coast guard escorts sailing in Vietnam's exclusive economic zone.
Mr Morrison met with Vietnamese Prime Minister Nguyen Xuan Phuc in Hanoi on Friday, with the leaders agreeing on a joint statement addressing the issue.
They called out disruptive activities in relation to long-standing oil and gas projects in the sea.
Australia and Vietnam stated that international law should be followed despite China continuing to ignore a 2016 ruling against their actions in the South China Sea.
Mr Morrison said countries in the Indo-Pacific should be free to pursue their own interests.
"It is about ensuring that each and every nation in the region can have confidence in its own independence and sovereignty," he told reporters.
But both leaders stopped short of explicitly naming China, continuing to call out the behaviour rather than the perpetrator.
"I am not here to make accusations or do anything of that nature. We do not take sides," Mr Morrison said.
Mr Phuc said the countries were united in their position on the South China Sea.
"We are deeply concerned about recent complex developments in the South China Sea and agreed to cooperate in maintaining peace and stability, security, safety and freedom of navigation," he said through an interpreter.
The prime ministers urged all parties to refrain from the threat or use of force in settling disputes in accordance with international law.
Overnight, the United States stepped up its condemnation of China's interference in Vietnamese waters, saying the deployment was an escalation by Beijing to intimidate other countries out of developing resources.
Mr Morrison said he didn't want to agree or disagree with the US, stressing Australia's position was consistent.
"We are carefully calibrated with what we say but most importantly, respectful."
He didn't rule out an individual free trade agreement with Vietnam, hinting there could be movement on a deal in the future.
"Australia and Vietnam are friends. Today, to use Australian parlance, we've gone from friends to mates," he said.
The visit was the first stand-alone bilateral visit to Vietnam by an Australian prime minister since Paul Keating in 1994.
Australia and Vietnam signed five memorandums of understanding across a range of areas including combating drug and human trafficking, trade and digital transformation.
Mr Morrison was given a ceremonial welcome at Hanoi's Presidential Palace replete with military fanfare and flag-waving.
He visited Ho Chi Minh's stilt house at the back of the palace where the Vietnamese founding father lived on and off between 1958 and his death in 1969.
The prime minister also toured a military hospital to meet with Australian-trained Vietnamese peacekeepers before going to the construction site of the Hanoi Formula One Grand Prix.
Australian Associated Press