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Geopolitics & Security

The United States and Vietnam: From Conflict to Cooperation


Commentary20th September 2023

The elevation of diplomatic ties between the United States and Vietnam from a “comprehensive partnership” to a “comprehensive strategic partnership”, following President Joe Biden’s visit this week, heralds a new era in their relationship. It places the United States in an exclusive diplomatic category alongside China, Russia, India and South Korea, signifying the highest level of cooperation that Vietnam offers outside its immediate neighbours.

The partnership provides a range of benefits for both sides. Economically it reaffirms the importance of collaboration, trade and investment, fostering innovation-driven and inclusive economic growth as a foundational pillar of the bilateral relationship. It offers substantial opportunities for Vietnam in particular, especially in foreign direct investment (FDI), which aligns with its goals to diversify its economy and enhance the quality of inbound investments. Notably, the Boeing deal that was signed during Biden’s visit, whereby Vietnam Airlines agreed to purchase 50 Boeing aircraft, exemplifies the potential for enhanced economic cooperation. Overall, the partnership holds great promise for both countries.

Biden’s highly touted visit and the agreement of the partnership marks a historic milestone. The elevation of their ties signifies a remarkable shift, especially considering the bitter conflict that defined their relationship less than five decades ago. Much global attention has centred on the visit’s relevance to US-China geopolitical and trade tensions. However, it is essential to recognise that this week’s agreement represents the culmination of a decades-long journey of rapprochement between the two countries.

US Senator John McCain played a pivotal role in the process of reconciliation. His efforts in the 1990s and early 2000s, alongside key figures such as Vietnam’s Deputy Foreign Minister Lê Mai, contributed to a more cooperative and constructive relationship. The 2001 US-Vietnam Bilateral Trade Agreement, which eased trade barriers and promoted investment, paved the way for normalised economic relations.

In 2013 the United States and Vietnam elevated their relationship to a comprehensive partnership, emphasising cooperation in fields such as politics, economics and security. Subsequent presidential visits, such as Barack Obama’s in 2016 and Donald Trump’s in 2017 and 2019, reinforced these ties. The expansion of defence and security cooperation, including joint military exercises and maritime-security initiatives, highlighted their shared interest in regional stability.

The investment agreements that were made this week align with years of continual efforts by the Vietnam government to improve the investment policy framework. Politburo Resolution 50-NQ/TW, passed in 2019, is just one example of the many executive, legislative and other policy actions designed to strengthen the investment environment and attract higher quality FDI that will have greater impact on skills and domestic supply chains. The government has also endeavoured to communicate a much more proactive call for high-tech and high-value investments, positioning itself to benefit from companies looking to diversify their manufacturing supply chain out of China.

Geopolitically, Vietnam’s careful balancing act in relation to major world powers, particularly China, has driven this upgrade. Hanoi’s broader diplomatic strategy – characterised by active regional engagement and ongoing dialogue with Beijing – plays a significant role in enhancing regional stability.

Vietnam’s strategic positioning and diplomacy, and its increasing competitiveness as a hub for new investment in the Asia-Pacific, will play a vital role in shaping regional stability. And as Vietnam asserts itself as a major player, it also sets a precedent by creating a model for other smaller or developing nations that seek to maintain independence in a politically charged world. As global supply chains are increasingly threatened and politicised, Vietnam’s role as a major hub for manufacturing and food exports will be accelerated by its ability to navigate difficult geopolitical realities.

The events of this week send a clear message that Vietnam is a key US partner in the Indo-Pacific, contributing to efforts to establish resilient supply chains amid escalating great-power rivalry. Europe and India should also view developments in the US relationship with Vietnam as a signal of evolving dynamics in the region. Vietnam’s ability to engage major powers without aligning entirely with any of them positions it as a lynchpin for cooperation and stability.

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