A New Model of US-Vietnam Relations: In Search of “Balance” of Gains
Photo Credit: Economy Watch
By Huong Le Thu

A New Model of US-Vietnam Relations: In Search of “Balance” of Gains

Jun. 15, 2017  |     |  0 comments

The Vietnamese Prime Minister Nguyen Xuan Phuc was the first leader from Southeast Asia, and third from Asia (after Japanese PM Shinzo Abe and Chinese President Xi Jinping) to pay a visit to Washington since Donald Trump became the US President. During his three-day visit from May 29-31, 2017, he went to New York to commemorate the 40th anniversary of Vietnamese membership in the United Nations before his visit to the White House. PM Phuc’s mission was aimed at forging a personal relationship with President Trump, who had yet to show any consolidated view of his policies towards Southeast Asia, as well as the South China Sea.

On May 31, during his meeting with PM Phuc, President Trump stated that he was glad to see more “balanced” trade relations with Vietnam. This new trend of seeking what Trump considers to be a foreign policy that is fairer to America might be challenging for a Southeast Asian state of much smaller size and capacity. But Vietnam aimed to show goodwill and hoped to meet somewhere or halfway with such expectations.

Almost exactly a year ago, the US-Vietnam bilateral relationship reached a new high with then-President Barack Obama’s visit to Vietnam and his announcement of the total annulment of the arms embargo that had been in place since the war between the two nations. In fact, Vietnam’s relations with the US have warmed up significantly over the past few years, coinciding with China’s increasing assertiveness in the South China Sea and the Obama administration’s Rebalance Policy.

Trump’s victory in the presidential election last October generated some fear in Hanoi that the promising momentum could be lost. Vietnam rarely figured in Trump’s campaign speeches — just like other Southeast Asian states — and if it was mentioned, it was in the same category, along with China, of countries which were dumping cheap products in the American market. Trump’s first decision — the withdrawal from the Trans-Pacific Partnership (TPP) — was a hard hit for Vietnam. Vietnam, being the least developed economy of all 12 TPP members, was widely believed to be the country that would benefit the most from the trade agreement. More importantly, the TPP promised to be a way to reduce Vietnam’s economic dependence on the Chinese trade and to “escape China’s orbit.” The Trump administration’s statement that the Rebalance is dead only further exacerbated Vietnam’s strategic anxiety.

But Vietnam is a no stranger to difficult circumstances. The visit can be seen as Vietnam’s proactiveness in seeking engagement with the US. With the mission to seek US continuity in its commitment to regional affairs, and in particular regional disputes, PM Phuc pitched benefits for the US to keep strong ties with Vietnam. The economic agenda was tailored for Trump’s business mindset. PM Phuc, who is domestically considered to be a hands-on economic reformer, was a better fit for the role than conservative Party Secretary General Trong or President Quang, who was the former Minister of Public Security.

Washington should reconsider modes of strategic cooperation beyond the traditional treaty-ally framework. Hanoi will be most pressed to get the relationship straight.

Despite Hanoi’s strategic concerns, the bilateral economic relations have been going well. America remains Vietnam’s largest export market. However, Vietnam ranks sixth among the US’ largest trade deficit partners. Bilateral trade from January-May 2017 amounted to USD 16 billion, which is 9.9 percent growth in comparison to the previous year. Exports from the US grew by 22 percent compared to last year. The visit was aimed at alleviating some of the Trump administration’s concerns about the growing deficit with Vietnam, which amounted to USD 32 billion last year, a fraction of the USD 347 billion deficit it holds with China. Among the deals PM Phuc signed was a USD 15-17 billion deal for the exchange of goods and services that focuses on technology. President Trump described this as a win-win outcome which meant “more jobs for America, more equipment for Vietnam.” Compared with the Vietnam-US leaders’ exchange from a year ago, this meeting was far from ideal and much more transactional. Leaders in Hanoi recognized this. With such gestures of goodwill, the Vietnamese leaders hoped to not only boost bilateral relations, but also to draw Trump’s attention to geo-economic and geo-strategic developments in the region.

During the previous administration, Vietnam and its Southeast Asian neighbors were considered major beneficiaries of American engagement in the region, both strategically and economically. The TPP was seen as a “carrot.” Under this administration, countries like Vietnam may need to come up with their own “carrots” to attract Washington’s attention, or at least to avoid the perception of relative loss.

Vietnam remains Southeast Asia’s most vigilant actor thus far. Despite the challenge of Washington’s little demonstrated interests in the region, Hanoi still has a number of advantages. First, the US’ Southeast Asian treaty allies — Thailand and the Philippines — are growing increasingly distant from America and closer to Beijing. Manila’s shift under Duterte is consequential, particularly for Vietnam, because of the South China Sea disputes. The recent 30th ASEAN Summit showed Manila’s reluctance to even raise the maritime issues publicly. Under the changing regional circumstances, Washington should reconsider modes of strategic cooperation beyond the traditional treaty-ally framework. Hanoi will be most pressed to get the relationship straight. This means Vietnam might be the keenest to invest in this relationship and become the Trump administration’s primary connection in Southeast Asia.

Moreover, while the previous administration’s focus on human rights was a long-term obstacle, Trump’s less idealistic approach means that Hanoi is likely to be more comfortable.

For America, this might be the best time to engage with Hanoi. Despite previous efforts, domestic responses to American defense engagement with Vietnam had met with a level of resistance. At this juncture, however, there seems to be consensus with Hanoi’s domestic leadership that the region cannot afford American absence. Thus, PM Phuc’s trip as well as the invitation for Trump to repay the visit, signal open doors and certainly a better negotiating position.

The Trump administration needs to realize that the previous lasting investments in this relationship should not be wasted over short-term business calculations. In fact, it is the Trump administration that is likely to harvest the fruits that previous administrations had carefully seeded. Vietnam is now a key actor in the region and if the US wants to retain its position in Asia, it should understand that long-term gains from this relationship are worth more than revenue. If Trump’s “Make America Great Again” has a global meaning, then securing the supporting partners should come first.

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