US, Vietnam Gear Up To Build Stronger Ties To Take On China – Analysis

After having strengthened economic and political relations during the last two decades, the United States and Vietnam have now embarked on a new course to deepen the bilateral cooperation in new areas such as law enforcement, transnational crimes, maritime security and cyber security.

This year both countries are celebrating the 20th anniversary of normalization of diplomatic relations. As part of the commemoration of this historic event, Vietnam’s Public Security Minister Tran Dai Quang visited the US last week and met with several key senior officials and senators, including the US Secretary of Homeland Security Jeh Johnson and Republican Senator John McCain.

During his week-long historic visit, Minister Quang, a politburo member of the Vietnam’s communist party and a powerful official in the Vietnamese government, expressed his satisfaction and happiness about the progress in cooperation between both countries in the fields of politics, diplomacy, economy, science and technology, education, environment, health, humanitarian issues, defense and security.

Basically, the main purpose of the visit was to promote the existing comprehensive partnership between the two countries on one side and explore more avenues for cooperation in the new fields on the other. The comprehensive partnership agreement was signed in 2013. Indonesia signed the similar agreement with the US in 2010.

While meeting Johnson, Quang discussed the possible cooperation in law enforcement, information sharing, transnational threats, human trafficking, intellectual property rights, maritime and cyber security.

Quang also signed a letter of agreement with the Federal Bureau of Investigation (FBI) regarding the transfer of DNA testing software.

During the Vietnam war, Americans dropped more than 7 million tons of bombs on Vietnamese people and more than three million people were killed in the entire war. But today Americans and Vietnamese are good friends and their countries on a fast track to become strategic partners. Vietnamese people have forgotten the bloody past and openly welcomed Americans. We can see today Starbucks, McDonalds, CFC outlets in major Vietnamese towns and cities.

Perhaps, the rising of China, both economically and militarily, might lead to the birth of this strange relationship between former foes. Indonesia, the de facto leader of ASEAN, has relatively good relationship with the world’s sole power. But now Vietnam is emerging as an important partner of the US in the region, outperforming the US traditional allies the Philippines and Thailand.

Vietnam says economic and geopolitical interests are the main reasons behind its rapidly growing relations with the US while the US considers Vietnam as a strategic partner and a possible bulwark against China under its so-called pivot or rebalancing toward Asia.

“Economic trade ties continue to stay at the heart of bilateral relations, serving both as the cornerstone of, and an engine for the overall relationship,” Vietnamese President Truong Tan Sang said during his historic visit to Washington in 2013.

Indonesia’s relations with the US are much older than Vietnam’s. But why the US now favors Vietnam more than Indonesia, especially in areas like trade, investment, defense, security and even in the field of nuclear science. Big powers always put Indonesia in a different category in the game of diplomacy and geopolitics, thanks to the archipelagic nation’s “free and active foreign policy” and its big size.

Despite of its democratic credentials, giant size and rising middle class, Indonesia has failed to reap rewards from the rapidly growing US-ASEAN relations. The bilateral trade didn’t see a significant growth as the trade was hovering between US$23 billion to $27 billion during the last five years.

Both exports and imports were rather stagnant. Based on the Central Statistics Agency’s data Indonesia’s bilateral trade with the US stood at $24.70 billion in 2014, almost the same in 2013. Indonesia’s exports have been on the decline since 2010 due to wrong policies, strategies and sharp decline in commodity prices.

Though American investors are interested in Indonesia, they are reluctant to invest heavily in Indonesia due to numerous problems ranging from legal certainty, corruption, taxation, to labor problems and land acquisition.

On the other hand, during the last five years, the bilateral trade between Vietnam and its former foe was more than doubled, surging from $14.2 billion in 2010 to $36.30 billion in 2014. Vietnam is today ASEAN’s biggest exporter, according to the US Census Bureau data, to the US with $30.58 billion of exports last year.

Vietnam is the fourth biggest trading partner of the US among ASEAN members. With $46.99 billion trade, tiny Singapore became the biggest trading partner of the US in ASEAN and Malaysia ($43.57 billion) and Thailand ($38.91 billion) stood second and third respectively. Indonesia is the fifth biggest trading partner of the US in ASEAN.

With its low labor costs, resources, bold economic and political reforms, incentives for investors and relatively better infrastructure, Vietnam has become a darling of foreign manufacturers in recent years.

Several American giants like Ford, Apple, Intel and General Electrics invested heavily in Vietnam. South Korea’s Samsung found Vietnam as a favorite place for investments than Indonesia and invested $11 billion in the electronic sector in Vietnam during last two years. Perhaps, Indonesia, whose manufacturing sector is in bad shape, can learn from Vietnam’s experience.

Moreover, Vietnam is on the course to become the first country in Southeast Asia to acquire nuclear knowledge from the US. The US has agreed to provide nuclear know how to Hanoi to build a nuclear power plant in the near future.

In line with the growing friendship and affection between the two nations, Obama recently eased a ban on providing weapons to Vietnam. It was a partial lifting of the ban and now Hanoi is asking for the removal of complete ban, given its tense relations with its neighbor China over South China Sea dispute.

This year, two important visits – first Vietnam’s Communist Party Secretary-General Nguyen Phu Trong’s visit to the US and later President Obama’s visit to Vietnam – are set to reshape the entire gamut of bilateral relations and pave the way for much awaited strategic partnership.

Another landmark in the both countries’ ties will be when Vietnam officially joins the Trans Pacific Partnership (TPP) trade pact later this year. The bilateral trade will easily reach $100 billion in two to three years. More and more investments will pour in not only from the US but also from other TPP member countries.