A New Era Is Dawning in US-Vietnam Relations

When U.S. President Joe Biden and leaders of the Socialist Republic of Vietnam met on September 10 in Hanoi to announce the details of their countries’ new comprehensive strategic partnership, they heralded a new era of cooperation between the two nations. Given that Vietnam remains largely off the global radar, the event drew only moderate international attention. But make no mistake, this is an event of profound significance.

While it has been nearly 30 years since the United States and Vietnam normalized diplomatic ties, the elevation of the relationship to the level of a a comprehensive strategic partnership is a momentous development, not only for Vietnam and the U.S., but for the entire region and world.

For Vietnam, deepening ties with the U.S. will bolster its efforts to realize its vast economic potential while also shoring up its defensive capabilities in the face of Beijing’s fixation on regional dominance. For the U.S., deepening ties with Vietnam expands possibilities for trade – including in strategic sectors such as microchips production – while adding expanding opportunities for security cooperation with a formidable regional middle power.

For both countries and for the wider region and world, the deepening of U.S.-Vietnam ties will add heft to multilateral efforts to promote a rules-based Indo-Pacific order.

From Poverty to Prosperity  

To grasp the significance of the partnership for Vietnam and the U.S. we can start with the economy.

Among Asia’s poorest countries as recently as 1990, Vietnam has since then registered three decades of rapid economic growth and is forecast to be among the world’s fastest growing economies through to 2050. Vietnam’s economy faces challenges, including lingering poverty and accelerating inequality, worrisome ecological strains, infrastructural bottlenecks, and corruption and mismanagement linked to non-transparent governance.

To escape the middle-income trap, Vietnam needs to expeditiously upgrade its economy. In combination with continued reform, partnership with the U.S. can assist these efforts. Vietnam’s deepening of ties with the U.S. promises special opportunities to move from exports of simple commodities and labor-intensive manufactured goods to the production and export of higher value goods and services to the U.S. and other markets.

The U.S. partnership will also benefit Vietnam’s economic security. Optimally, Vietnam can realize beneficial aspects of trade with China, which remains Vietnam’s largest single trading partner, while gradually reducing its structural, financial, and technological dependence on its large northern neighbor.

Over the last decade, China has sought to expand its investments in Vietnam and has skillfully and at times surreptitiously used Vietnam as a platform to access the U.S. market. Increasingly, Vietnam’s government and business leaders recognize the importance of reducing excessive reliance on China-dominated supply chains, technologies, and finance.

Three areas of economic cooperation – green technologies, microchip production, and vocational and higher education – illustrate how U.S. investment can assist Vietnam’s economic and security interests.

Vietnam’s energy and environmental infrastructure require swift improvement. Its industrial capabilities need to be upgraded. And its workforce, despite being highly literate and extremely motivated, requires game-changing sustained investment in skills development. U.S. investments and assistance in the areas of energy and environment, high-tech, and higher education will demonstrate Washington’s long-term commitment to Vietnam’s prosperity and security, while also protecting Vietnam from risky dependence on China.

Which brings us to the question of security.

From Subjugation to Independence 

Unlike most countries, Vietnam has centuries of experience in coping with Chinese expansionism. The imperative of security in the face of external threats, be they of Chinese, French, Japanese, or American origins, is an essential aspect of Vietnam’s history.

Given its inalterable proximity to China and the two states’ intertwined histories and institutional affinities, it is easy to understand why Vietnam’s foreign policy approach has been carefully calibrated to avoid angering Beijing. And, unsurprisingly, Vietnam’s first comprehensive strategic partnerships (CSPs) were signed with China (in 2008) and Russia (in 2012). Yet Vietnam’s leaders and its people are wary of Beijing’s aggressiveness.

Most fundamentally, Hanoi wholly rejects the Chinese government’s baseless sovereignty claims over vast swathes of the western Pacific, reflected in its infamous nine- (and now ten-) dash line, and is alarmed by Beijing’s efforts to enforce it. As it stands, China regularly transgresses Vietnam’s exclusive economic zone.

But the security threats don’t end there. Beijing continues to dam the upper Mekong and has mounted increasing numbers of hacking attacks on Vietnam’s emerging cloud-based economy. Reliance on Chinese tech for critical infrastructure is unthinkable. Indeed, Vietnam’s efforts to diversify its partnerships are geared at promoting economic development and national security aims.

In recent years, and especially since 2014, when China’s deployment of a giant oil rig off Vietnam’s coast ignited tensions, Hanoi has made concerted efforts to diversify and deepen its ties with other countries, forming CSPs with India in 2016 and South Korea in 2022, as well as strategic partnerships with the United Kingdom in 2010 and France in 2013.

The trend has continued. Last month, Vietnam committed to signing three additional CSPs, with major partners Australia, Indonesia, and Singapore, while Hanoi and Tokyo have this week discussed upgrading their Vietnam-Japan extensive strategic partnership. The Vietnam-U.S. Comprehensive Strategic Partnership is a crucially important further step.

A Promising Partnership 

However ironic, in both economic and security domains, the strategic interests of the United States and Vietnam are extremely closely aligned.

As we have observed, economic restructuring in Vietnam will require swift upgrades in the capabilities of its domestic producers and effective, long-term investments in its economy and people, perhaps especially from the U.S. In defending its territorial integrity, Vietnam will benefit from Washington’s unique defense and intelligence capabilities.

Areas of tension remain. Washington will (and should) continue to encourage Hanoi to meet its commitments to the Universal Declaration of Human Rights and Vietnam’s own Constitution. Hanoi will (and should) demand Washington do more to make amends for harms inflicted on Vietnam decades ago and avoid moralizing talk on human rights, given its own mixed international and domestic records. Other areas of tension will remain topics of engagement.

In the meantime, the U.S.-Vietnam partnership holds great promise. Some 48 years since the end of their war, Vietnam and the U.S. are taking major steps together in the interest of prosperity, security, and peace.