In the last year of his second term in office, President Barack Obama would be the third US President after Bill Clinton (November 2000) and George W Bush (November 2006) to visit Vietnam, in what is being seen by analysts as path-breaking as geopolitical situation in the Asia region has dramatically changed in the past one decade. Obama arrives in Hanoi on the morning of 23 May and Secretary of State John Kerry will escort the President. Obama is expected to have an official meeting with Vietnam’s leaders to discuss measures to forge a comprehensive partnership between Vietnam and the US and seek means to strengthen bilateral cooperation in various fields of economic affairs, security, people exchange, as well as other regional and global issues.
It is interesting to evaluate how Vietnam-US ties have traversed in the past four decades when the war ended and the US had to retreat. Over the years, both have made noticeable progress in the field of trade and security cooperation, which are deepening as years pass.
TPP and economic links
Obama’s visit signals tighter economic ties with Vietnam. Vietnam is “one of Asia’s fastest growing economies and an increasingly pivotal player in regional politics”. Obama arrives in Hanoi after the US and 10 other nations signed the Trans-Pacific Partnership (TPP). The TPP is a US-initiated massive international trade pact designed to give American companies access to Asia-Pacific markets. Vietnam has enjoyed steady economic growth in recent years. There is scope for expansion in manufacturing and construction. The rising demand is accompanied by a surge in foreign direct investment, including from the US investors. According to the ADB report, Vietnam’s gross domestic product rose 6.7 per cent in 2015. In the party’s new socio-economic plan, the government has set the target to reach a growth rate of 7 per cent between 2016 and 2020.
It is in this scenario Vietnam’s participation in the TPP could help. The TPP could help deliver to boost Vietnam’s economy by drastically reducing the tariffs it pays to export cell phones, textiles and other consumer goods. It is estimated that TPP could increase Vietnam’s GDP by 8.1 per cent by 2030, making Vietnam one of the deal’s biggest winners.
Some neutral observers would take the view that the US-backed TPP would serve as a broader geopolitical tactic to boost the US economic links to Asia. What is significant is the TPP would work to check China exerting economic and political influence in the region. That seems to be the hidden agenda too behind TPP promotion.
There appears to be a lot of symbolism behind Obama’s visit to Vietnam. The Vietnam War ended 41 years ago and the two nations normalized relations 20 years later. Bill Clinton set the pace by becoming the first US president to visit Vietnam, followed by George W. Bush in 2006. Obama’s visit is a further extension of this US strategy to engage with Asia.
In fact, the US – Vietnam economic relations have made undisputable results since their normalized ties. The removal of the US trade embargo against Vietnam in 1994 opened up an era of economic cooperation, leading to a comprehensive bilateral trade agreement in 2000, normalization of trade relations in 2006, and Vietnam’s ascension to the WTO in January 2007. As a result, US–Vietnam bilateral trade has grown from US$451 million in 1995 to nearly US$35 billion in 2014. US direct investment in Vietnam rose from US$126 million in 2000 to US$10 billion in 2013. U.S. exports to Vietnam were worth $5.5 billion in 2014, and U.S. imports were worth $29.7 billion.
By joining the TPP, Vietnam is seen by the US establishment as an important anchor of the US pivot towards Asia. Vietnam is locked in a dispute with China over maritime claim in the South China Sea. In order to defend its sovereignty, Vietnam is engaged in strengthening its naval and military capability and is eager to buy high-tech weaponry from the US. That is another issue discussed below.
Lifting of arms embargo
Obama is considering whether to lift the remaining three-decade-old arms embargo, partially relaxed two years ago, to allow maritime purchases. In October 2014, Washington approved the sales of US-made patrol boats to bolster Vietnam’s coast guards. As it appears, Obama is unlikely to go too far to completely lift the embargo. What one could expect is the US shall consider military requests on a case-by-case basis. Vietnam’s ambassador to the US, Pham Quang Vinh, called for a complete lifting of the America’s embargo on weapons sales to Vietnam. Vietnam has made repeated requests for a full lifting of the embargo and is not satisfied by easing a lethal arms embargo in October 2014 and signing of a new framework for defense ties in 2015. Some discussion on this took place on the sidelines of the US-ASEAN summit at Sunnylands in February 2016 between Obama and Vietnamese Prime Minister Nguyen Tan Dung. It is expected some more advance shall be made during Obama’s visit.
Notwithstanding the procedural Congressional limitations on taking a decision on lifting the ban, there seems to be a consensus on the US defense ministry that Vietnam’s requests are justified in the wake of China’s assertiveness in South China Sea. In fact, countries in Southeast Asia are urging the US to remain strongly engaged in the region and with them in particular, Vietnam included. It helps then generate leverage vis-a-vis China. So, if Obama announces the lifting of the embargo during his visit that would be truly historic in the context of Vietnam-US defense ties.
What does a complete lifting of US arms embargo on Vietnam mean for both the countries and the region? In Vietnam, it would be seen that relations with the US have been fully normalized. It would also sweep away one of the last vestiges of the Vietnam War era and advances the normalization of relations begun 21 years ago. But it would also likely anger Beijing, which was critical of Obama’s partial easing of the arms ban in 2014 as an interference in the region’s balance of power.
Even while Beijing is engaged in military modernization on a continuing basis, it remains sensitive to other nations’ defense issues. This kind of over-sensitiveness is typical of Chinese character in which its national interests are always supreme and of others are not. Therefore Chinese protest to Vietnam’s efforts to beef up its security as a sovereign nation ought to be dismissed with contempt and need not be given any cognizance.
Since boosting the security of allies and partners has been a major thrust of Obama’s strategic “pivot” toward the Asia-Pacific region, Vietnam expects the same primacy which Obama accords to other allies such as Japan, South Korea and the Philippines.
Vietnam of course would have other options, if the US fails to fulfill Vietnam’s requirements. Russia has been open to arms sales to Hanoi at lower prices for years. If the US declines, its loss could be Russia’s gains. Vietnam could use its port of Cam Ranh Bay, the finest deep water port in Southeast Asia, in furthering its naval strategy and interests. Cam Ranh Bay was a major US base during the American war. Vietnam leased the port to the Soviet Union in 1979 until 2002 when it pulled out. Since then the port has been modernised and has received visits by warships from Singapore, Japan, France and India.
In view of China’s increasing maritime presence in Vietnam’s neighborhood, the prospects of visits by US Navy warships to port of Da Nang shall be more. Obama’s visit shall pave the way for more advances in Vietnam-US relations. At a time when Vietnam’s ties with the US and other friendly nations such as Japan and India continue to grow, Obama visit is likely to help in taking the Vietnam-US ties to even a higher level.
Another dimension in this unfolding drama is the increasing bonhomie between India and the US, India and Vietnam, India and Japan. All these four nations find common grounds and seek means to maintain peace and stability in Asia, which is threatened to be disturbed by China. With the US’ blessing, a trilateral grouping between India, Vietnam and Japan as a forum for dialogue to address issues of common concern could find resonance in the three capitals. The idea, if floated when Obama is in Vietnam, at the government level, would be seen to have come at a very appropriate time.