US-Vietnam economic ties to increase after historic visit

US-Vietnam economic ties to increase after historic visit

This July, the Secretary-General of the Vietnam Communist Party (VCP) made a five-day visit to the United States. A Joint Vision Statement was released during the visit, emphasizing enhanced economic and security ties. It provides the basis for the future development of bilateral relations.

Between July 6th and 10th, the Secretary-General of the Vietnam Communist Party, Nguyen Phu Trong, made an historic visit to the United States. Invited by the Obama administration, it is the first visit by a serving chief of the Communist Party of Vietnam and came just prior to the twentieth anniversary of diplomatic relations between the two countries.

The occasion included a meeting between Obama and Trong on July 7, at which the two leaders released a Joint Vision Statement that promotes shared economic and security interests, which will be vital for deepening a long-term partnership.

The joint statement recognizes substantive developments in many areas of cooperation since diplomatic relations between the two countries began in 1995. In 2013, the formation of the United States-Vietnam Comprehensive Partnership marked an important milestone in advancing bilateral relations and provided a mechanism to facilitate cooperation in areas such as political and diplomatic relations, trade and economic ties, science and technology, environment and health and the protection and promotion of human rights. It is upon this framework, that the Joint Vision Statement seeks to build.

The future of economics and trade

First and foremost, the statement seeks to enhance economic, trade and investment cooperation which has increased significantly following the Bilateral Trade Agreement (BTA) signed in 2000.

In an article released on July 12th to commemorate the twentieth anniversary of bilateral relations with the US, Pham Binh Minh, Vietnam’s Deputy Prime Minister and Foreign Minister, highlighted some important bilateral trade figures. US-Vietnam trade increased from $400 million in 1994 to $36.3 billion by 2014.

This makes Vietnam the number one exporter to the US out of the ten member states of the Association of Southeast Asian Nations (ASEAN). The US is the seventh largest investor in Vietnam with a total of $11 billion.

According to the joint statement, the US and Vietnam expect to work in close collaboration to further enhance economic and trade ties. Vital to this is the conclusion of the comprehensive Trans-Pacific Partnership (TPP) agreement. The US expects Vietnam to meet the high standards of the TPP agreement, including respecting its commitments to the International Labour Organisation’s 1998 Declaration on Fundamental Principles and Rights at Work.

According to Deputy Prime Minister Pham, economic ties between Vietnam and the US could “skyrocket” with the conclusion of the TPP. Vietnam is also pushing the US to grant it market economy status to lower tariffs on imports. A decision on this is expected during talks to conclude TPP negotiations.

Increasingly shared security interests 

The joint statement also details a number of agreements, which will foster the further development of US-Vietnam relations.

These include agreements on double taxation, United Nations peacekeeping cooperation, a memorandum of understanding regarding the emerging pandemic threats program, an agreement providing technical assistance for aviation safety, and an agreement to accelerate education cooperation by establishing a Fulbright university in Vietnam.

The Vietnam National Oil and Gas Group (Petrovietnam) has also signed a memorandum of understanding Murphy Oil to boost cooperation in oil and gas projects.

In addition, the US and Vietnam pledged their commitment to enhancing cooperation in regional institutions and forums, such as the ASEAN Regional Forum (ARF), Asia-Pacific Economic Cooperation (APEC) forum and East Asia Summit (EAS).

Both countries have expressed concern about recent developments in the South China Sea and, according to the joint statement, these developments “have increased tensions, eroded trust, and threatened to undermine peace, security and stability.”

Both the US and Vietnam support the peaceful resolution of disputes according to international law and have reaffirmed continued bilateral cooperation in defense and security. This underscores their commitment to addressing non-traditional security threats, cooperation in maritime security, maritime domain awareness, and defense trade and information sharing.

July’s meeting was an important step in deepening relations between the two former adversaries and the joint statement acknowledges the need to continue to build trust between the two states. It also acknowledges the need to maintain frank and constructive dialogue on issues such as the protection of human rights.

By highlighting shared interests and areas of cooperation, the joint statement provides a clear trajectory for strengthened economic and security relations in the future.

Categories: Asia Pacific, Politics

About Author

Laura Southgate

Laura Southgate is Lecturer in International Security at the Centre for International Security and Resilience, Cranfield University, located at the Defence Academy of the United Kingdom. She has a PhD in International Relations from the University of Otago, New Zealand, and an MA in International Relations and Security, and a BA in Law and Politics, from the University of Liverpool.