General Secretary of the Communist Party of Việt Nam Central Committee Nguyễn Phú Trọng officially welcomes US President Joe Biden to Việt Nam on September 10. — VNA/VNS Photo

Hai Hong Nguyen *

Last week, US President Joe Biden concluded his one-and-a-half day state-level visit to Hà Nội at the invitation of the Communist Party of Việt Nam (CPV’s) Secretary-General Nguyễn Phú Trọng. The repercussions of the visit still linger in both capitals. What could we learn from Biden’s visit and why it was described by both sides as historic? There were five key takeaways from the visit.

First, the most anticipated outcome of the visit was the formal elevation of Việt Nam-US relations to Comprehensive Strategic Partnership (CSP) “for peace, cooperation and sustainable development”, lifting the US onto the same level of diplomatic ties that Việt Nam already had with China, India, Russia and South Korea.

For those who barely have knowledge of Việt Nam’s foreign relations, the country has four unwritten tiers, proceeding from the lowest to the highest level, of diplomatic ties, namely regular, comprehensive, strategic and comprehensive strategic partnership respectively. The country establishes the level of diplomatic ties commensurate with the level of trust.

Việt Nam’s upgrade in relations with the US to CSP was a surprise as it leapfrogged straight forward from the second to the fourth tier. However, this is not the first time Việt Nam has done so. A two-fold message implied behind this diplomatic move can be construed that, firstly, Việt Nam wanted to cultivate a strategic equilibrium with major powers like the US and China, and, secondly, it reiterated its no-sides approach to the power rivalry. Instead, it consistently and resolutely pursued a foreign policy of independence and self-reliance in international relations.

For the US, the upgrade in Việt Nam-US relations is a sheer acknowledgement of Việt Nam's role as "a critical power in the world and a bellwether in this vital region" and for the success of the US Indo-Pacific Strategy.

Second, the leaders’ joint statement identifies the priority areas of cooperation between the two countries for the future. Built on the ground of the Comprehensive Partnership formed in 2013, the CSP is expanded to include other strategic areas of cooperation on critical and emerging technologies such as semi-conductor products manufacturing and the response to climate change.

Việt Nam is emerging and has the potential to become not only a centre of US investment in technology development and innovation, but also a global producer and supplier of semi-conductor products.

In the field of response to climate change, Việt Nam is much reliant on the US and other international partners in the efforts to fulfil its commitments made at COP26, achieving net zero emissions by 2025. The US, the largest contributor to the Just Energy Transition Partnership (JETP), along with other countries in the G7, which provides $150 million to Việt Nam to fulfil its net-zero emission targets, is pleased with Việt Nam’s cooperation and support to its pioneering global efforts in this field. John Kerry, a Việt Nam war veteran and a strong supporter of US-Việt Nam relations, has been to Hà Nội at least three times (February 2022, September 2022, and September 2023) in the past two years in his role as the US presidential special envoy in climate change to discuss with the Vietnamese government the bilateral cooperation. Prior to Biden’s arrival in Hà Nội, Kerry had a meeting with Vietnamese Prime Minister Phạm Minh Chính, where he offered the US’ commitments and support to Việt Nam in its efforts to fulfill the COP26 commitments.

Third, cooperation in the economic, trade and investment fields remains the principal pillar and the impetus of the bilateral relations. In his meeting with President Biden, Prime Minister Chính said economic cooperation should be established as a long-lasting pillar in Việt Nam-US ties.

Currently, the US is Việt Nam’s largest export market, which has exceeded the value of more than US$100 billion. The total two-way trade value between Việt Nam and the US has increased more than 240 times since the normalisation of the bilateral diplomatic ties, going up from $451 million in 1995 to $132 billion in 2022.

Amid the wave of relocating the production lines in the region and China decoupling, Việt Nam is arising as a venue that attracts foreign investors, including giant companies from the US. Indeed, there is an increasing interest from the American business community in Việt Nam. In March, the largest-ever delegation from 52 American companies visited the Southeast Asian nation to explore business opportunities. While in Hà Nội, Biden and Chính co-chaired a high-level US-Việt Nam Business Meeting with corporate representatives from both sides. On this occasion, multi-million dollar agreements were signed.

In the opposite direction, Việt Nam, for the first time, has had a corporation that made a billion-dollar investment and was listed on the American stock market. Last year, Vinfast, the biggest car maker in Việt Nam and a member of Vingroup, poured $4 billion into building an electronic vehicle and batteries manufacturing factory in North Carolina.

Last month, it also became the first Vietnamese company to have its shares traded on the Nasdaq Stock Market, inspiring other Vietnamese businesses to start planning to attract capital from the American financial market. The CSP is expected to accelerate a new wave of investments in both directions, notably those from Việt Nam.

Fourth, addressing the legacies of war is the key and the foundation to enhance people-to-people ties, increase trust and keep the two nations close together, given the fact to be acknowledged that the differences in the perception and execution human rights and freedoms remain. Nevertheless, the establishment of CSP is a strong testament to show that the two sides can overcome these differences on the grounds of trust and shared strategic interests in the Indo-Pacific.

Both sides have agreed that they need to “overcome differences, bring similarities into full play, put aside the past and advance to the future”.

Fifth, by upgrading the bilateral relations with Việt Nam to CSP, the Biden administration also wanted to send out a message that the US had an anchored strategic interest in Southeast Asia and the Indo-Pacific. Indeed, President Biden kept repeating the critical importance of this region to the US in his remarks in Hà Nội, and resolutely reaffirmed that "the United States is a Pacific nation, and we are not going anywhere". These statements were significant when his absence from the ASEAN and East Asia summits in Jakarta faced regional concerns and questions about the US commitments.

Việt Nam and the US are anticipating a new chapter in bilateral relations on the grounds of CSP. It is too early to realise any fruits from this new agreement, though CSP sets high hopes for Việt Nam that a closer and strategic partnership with the US will help it materialise the two centenary development goals, becoming a “strong, prosperous and resilient” country and playing a more important role in the region as well as in the global supply chain. For the US, CSP enhances its firm footing and presence at the heart of the most dynamic region, which is critical to American interests.

*Hai Hong Nguyen

Senior Lecturer at VinUniversity

hai.nh@vinuni.edu.vn