What Pompeo's visit augurs for post election Vietnam-US relations

While at least one expert is troubled by the lack of any new development, others see significance in the visit happening, per se.

"Pompeo’s unexpected visit to Hanoi must be viewed as a significant development, because it came at a time when the Covid-19 has severely impacted high-level face-to-face meetings," Carlyle Thayer, Emeritus Professor from the University of New South Wales Canberra at the Australian Defense Force Academy, said.

"While Vietnam and the U.S virtually celebrated the 25th anniversary of diplomatic relations in July, Pompeo’s visit provided the pretext to underscore this milestone".

During Pompeo’s two-day visit on October 29-30, he held talks with his Vietnamese counterpart, Minister of Foreign Affairs Pham Binh Minh, Prime Minister Nguyen Xuan Phuc and Minister for Public Security To Lam.

In his meeting with Minh, Pompeo affirmed that the U.S. highly values the comprehensive partnership with Vietnam on the basis of respecting each other's independence, sovereignty, territorial integrity and political institutions. He said he was committed to strongly strengthening the stable relationship in the coming time. He also told Minh that he wished both sides continue to strengthen coordination in handling common challenges, thereby contributing to maintaining peace, stability, security and development in the region and around the world.

PM Phuc welcomed the continued implementation of an action plan by both countries towards achieving a sustainable balance of trade. He also stressed the strategic importance of energy cooperation, including higher LNG imports from the U.S. to Vietnam.

Besides, the Vietnamese leader said the country was committed to creating an open, transparent investment environment to enable American enterprises to do business in Vietnam.

Vietnamese leaders also thanked the U.S. for its disaster relief support to Vietnam, which included $2 million from the U.S. Agency for International Development (USAID).

Thayer said the fact that Pompeo was able to meet PM Phuc and FM Minh at short notice was a sign that the bilateral relationship is highly valued by both sides. The meeting with Minister To Lam was unprecedented, he added.

Charles Dunst, Visiting Scholar at the East-West Center in Washington, U.S, said Pompeo’s visit to Vietnam is a welcome conclusion to his Asian tour, as it indicates Washington’s awareness of Vietnam’s geopolitical importance and perhaps the Americans’ willingness to compromise on the trade disputes that have angered President Trump.

Prior to Vietnam, Pompeo traveled to India, Sri Lanka, Maldives, Indonesia from October 25.

U.S Secretary of State Pompeo (L) with Vietnamese PM Nguyen Xuan Phuc in Hanoi, October 30, 2020. Photo by Vietnam News Agency.

Worth noting

Thayer said there were important developments worth noting. Bilateral security cooperation in the South China Sea and the Lower Mekong was a new development that would build on current engagement between the two countries' security agencies.

Both sides have also agreed to address thorny issues in their bilateral economic and commercial relations, including Vietnam's trade surplus and U.S. suspicions of currency manipulation.

In an October 26 meeting with Adam Boehler, the head of the U.S. International Development Corporation, PM Phuc made it clear that "Vietnam is not using exchange rate policy to create a competitive advantage in international trade."

He also asked Boehler to convey to President Trump and the Office of the United States Trade Representative (USTR) that the U.S. should "have a more objective assessment of reality in Vietnam" with respect to Vietnam’s trade surplus with the U.S.

The day before Pompeo arrived in Hanoi, on October 28, the Indo-Pacific Business Forum provided the venue for American and Vietnamese companies to reach seven agreements or Memoranda of Understanding (MOU) in various key sectors. These included deals to use $3 billion American equipment and engineering services at a gas-fired power plant in Bac Lieu Province, to develop a $1.4 billion LNG import terminal project in the central province of Binh Thuan, a 3,000 MW Long An LNG-to-power project, a potential integrated LNG-to-power project in Hai Phong, technology transfer to modernize Vietnam’s power grid, supply of ethanol for fuel and a $500 million sale of pork to Vietnam over a three-year period.

"The agreement on the export of billions of dollars of LNG a year from the U.S. to Vietnam is a major development that will impact the balance of trade," Thayer said.

Bonnie Glaser, Senior Advisor for Asia, Center for Strategic and International Studies (CSIS), said Pompeo's visit provided a good opportunity to strengthen collaboration on issues of shared interests like the South China Sea and the Mekong.

Different, but same

Pompeo's visit to Vietnam has sparked greater interest given that it took place very close to Election Day in the U.S., with incumbent Trump and Joe Biden being the frontrunners.

Derek Grossman, senior defense analyst at U.S. government-funded think tank RAND Corporation, felt neither a Trump re-election nor a Biden victory would impact U.S.-Vietnam ties.

While a Trump re-election would ensure that the Indo-Pacific strategy remains intact, Biden’s Asia strategy is likely to be similar, though it might no longer be called the same thing.

Biden’s strategy would also focus on strengthening alliances and partnerships throughout the Indo-Pacific region, and Vietnam would certainly be an important part of it, Grossman said.

Glaser also felt that there has been a trend of bilateral ties getting closer over the past decade under both Republicans and Democrats.

"I expect that will continue regardless of the outcome of the election," she said.

Thayer said that if Trump is re-elected, his administration will continue to assist Vietnam fight the Covid-19 pandemic and to enhance its maritime security capacity in the South China Sea including supporting Vietnam’s efforts to combat illegal Chinese fishing.

However, Vietnam’s trade surplus will continue to bedevil bilateral relations, Thayer warned.

Under Robert Lighthizer, the USTR can be expected to pressurize Vietnam on a number of issues and impose tariffs if it concludes that allegations of currency manipulation and illegal export of timber are true.

Vietnam, for its part, will continue to lobby for the U.S. to: restore its status as a developing country; to lift tariffs on catfish, shrimp and aluminum and steel; and to grant Vietnam market economy status, Thayer said.

If Biden is elected president, he said, there will be continuity in bilateral relations, given that the agreement on comprehensive partnership was reached up under Democrat President Obama. Trade issues will remain important but the Biden administration is likely to be less aggressive towards Vietnam than the Trump administration.

Trade has become a major part of bilateral ties, increasing from $450 million in 1994 to $77 billion in 2019. The U.S. is now Vietnam’s largest importer and Vietnam remains the U.S.’s fastest-growing market in Southeast Asia. Despite the adverse impacts of the Covid-19 pandemic, bilateral trade value rose nearly 10 percent in the first half of this year.

In Dunst's view, if Biden wins, he will need to deliver economic investment to Southeast Asians.

"Hopefully, Biden recognizes that strategic support for Vietnam, while good and necessary, must come with economic assistance as well," said Dunst.

‘A bit troubling’

Grossman said he wondered what was new in U.S. - Vietnam relations following Pompeo’s visit. Neither side made any major announcement, he noted, adding, "that is a bit troubling."

Vietnam and the U.S. officially normalized their relationship on July 11, 1995, 20 years after the end of the Vietnam War. In July 2013, Presidents Obama and Truong Tan Sang launched the "comprehensive partnership" between the two countries, a framework that experts have said has the "stature of strategic partnership."

Grossman felt that no matter who wins the election, the U.S. and Vietnam are close to announcing the elevation of their partnership from "comprehensive" to that of "strategic."

He said: "This trip laid good groundwork for that to potentially happen at the next major leadership meeting."