As Vietnam and the United States mark the 40th anniversary of the end of their bitter war on April 30, it’s surprising how far the two countries have come in normalizing relations. To be sure, there are still areas where ties could be deepened, particularly in military-to-military interaction. The United States is held back by concerns about human rights, particularly Hanoi’s detention of bloggers, but for Vietnam the worry centers on how giant neighbor China will react.
Vietnam this year seems to have two major priorities in its ties with the United States: Host President Barack Obama in Hanoi and secure a meeting for Communist Party chief Nguyen Phu Trong in the White House. When Washington signaled that Trong would be invited to visit Washington, China sought to preempt the Americans by sending him a last-minute invitation to visit Beijing. While Beijing feted the Vietnamese party chief in early April, Vietnam welcomed US naval ships for an annual exercise off the coastal city of Danang, as if to signal its intention to balance ties between China and the United States.
A key factor driving Vietnam to bolster its relations with the United States in recent years has been China’s increasingly assertive behavior in the disputed South China Sea. Most recently, China has been changing facts on the water by dredging sand and pumping it onto partially submerged coral reefs, transforming them into new manmade islands in the Spratly Islands, parts of which are also claimed by Vietnam, the Philippines and Malaysia. China appears to be creating outposts from which it can conduct air and sea patrols 1,000 miles off its southern shore.
Vietnam’s concerns about China’s actions in the South China Sea date back to 2009 when Chinese ships began harassing the oil and gas exploration activities of PetroVietnam and its foreign partners off the coast of Vietnam. Anti-China protests, some violent, erupted in Vietnam in May 2014 after China parked a deep-water oil rig owned by China National Offshore Oil Corp. in disputed waters off the coast of central Vietnam.
Since the United States and Vietnam restored diplomatic ties in 1995, their relations have deepened in almost every area from economic to military relations and political to cultural cooperation. When Vietnamese president Truong Tan San visited Washington in July 2013, he and Obama announced an agreement to launch a comprehensive partnership, signaling a decision by both governments to boost strategic ties.
Bilateral economic relations have flourished since 1994 when the United States lifted the embargo against Vietnam. Two-way trade reached $36.3 billion in 2014, up more than tenfold since the two countries signed a bilateral trade agreement 13 years ago. Vietnam estimates that US companies have invested $11 billion, making the United States the country’s seventh largest investor. The biggest US investor is Intel Corp., which built a $1 billion wafer testing plant in Ho Chi Minh City.
Despite Vietnam’s growing trade ties with the rest of the world, China remains the country’s top trading partner with two-way trade expected to reach $60 billion this year, almost twice that with the United States. But Vietnam’s economic dependence runs even deeper. The country relies on China for much of its electricity in the northern part of the country, and many of the inputs for its critical exports of garments to the United States and Europe come from China.
To hedge its economic bets, Hanoi is partnering with the United States, Japan and nine other countries in the Trans-Pacific Partnership, the trade agreement known as TPP, which negotiators seek to complete in the coming months. Vietnam hopes not only that the TPP will help force reforms of its inefficient state-owned enterprises, but also will give its economy alternative markets and decrease its heavy reliance on China.
Vietnam and the United States are also stepping up political and security cooperation. They hold two annual defense dialogues at the vice-ministerial level and work together in such areas as maritime security, military medicine, disaster response, and search and rescue. Vietnam will receive five to six new patrol vessels from the United States each year over the next several years to boost its maritime domain awareness.
Last October, Washington partially lifted its ban on the sale of weapons to Hanoi, which had been in force since the end of the war, to help Vietnam boost maritime security. Six months later, Hanoi has not ordered any US hardware under the new rules, as it apparently labors to understand the complexities of buying weapons systems from the United States. Washington would also be interested in increasing naval cooperation beyond one port call with three ships each year, but Vietnam appears reluctant to expand these operations in an effort to avoid irritating China.
At the political level, the US secretary of state and Vietnamese foreign minister meet each year to monitor progress in their comprehensive partnership. The two governments also hold regular discussions on human rights, the biggest obstacle holding the US government back from deepening ties. Washington’s assessment that freedom of religion and expression had improved in recent years made it possible for the administration to make a case to Congress to partially lift the ban on weapons sales.
Educational and cultural cooperation are also increasing between the two nations. Today there are 16,000 Vietnamese students studying in the United States, more than from any other nation in Southeast Asia. Congress has approved nearly $18 million to establish a private, nonprofit Fulbright University with an independent board of governors in cooperation with the Vietnamese government in an effort to boost country’s university education.
The two countries are also tackling the devastating legacies of their long war. Hanoi has long helped Washington look for servicemen still missing in Vietnam, and the United States has begun assisting the Vietnamese search for the remains of their missing. Washington is also helping clean up dioxin remaining from the use of the Agent Orange defoliant, linked to birth defects and cancer, according to scientists. The United States has spent more than $65 million to clean up the airport in central Vietnam and is beginning work on a former military base just north of Ho Chi Minh City.
The strategic interests of Washington and Hanoi are closely aligned on the South China Sea. Both call for the preservation of freedom of navigation and support a rules-based, diplomatic approach to resolving the territorial disputes with China. Vietnam welcomes the increased US security presence and intelligence activities in the disputed sea.
China’s placement of the oil rig off the coast of Vietnam last year served as a wakeup call for Vietnam’s leaders. It helped resolve, at least for now, the debate between those who want to stick with their communist allies in Beijing and those arguing for moving closer to United States as a hedge against China.
Despite the pace of rapprochement between the United States and Vietnam, the Vietnamese have limits on how far they are willing to go in deepening their defense ties with the Americans. Sharing a long border, 1280 kilometers, and several millennia of history with its giant neighbor, Vietnam—like its Southeast Asian neighbors—is trying to balance relations and avoid having to choose between China and the United States.
Murray Hiebert is senior fellow and deputy director of the Sumitro Chair for Southeast Asian Studies at the Center for Strategic and International Studies (CSIS) in Washington, DC. © 2015 YaleGlobal Online and the MacMillan Center at Yale.
