Vietnam elevates relations with US to highest diplomatic status

NEW DELHI/HANOI - Vietnam on Sunday elevated its ties with the United States to the highest diplomatic status during a visit to the country by US President Joe Biden.

The two countries are now comprehensive strategic partners.

Vietnam has named four other countries in this category – China, Russia, India and South Korea.

The US has been pushing for the upgrade for months as it sees Vietnam as a key country in its strategy to secure global supply chains from China-related risks.

A half-century after a lengthy and brutal Cold War-era conflict, Mr Biden arrived in Hanoi on Sunday.

The country’s ruling Communist Party organised a welcome ceremony that included schoolchildren waving American flags and honour guards carrying bayoneted rifles.

Mr Biden noted the strides that had been taken towards improved ties. “We can trace a 50-year arc of progress between our nations, from conflict to normalisation, to this new elevated status,” he said.

Vietnam is having to navigate frosty relations between Washington and Beijing as it seeks its own foothold in the international economic competition.

Top Chinese officials, possibly including President Xi Jinping, are expected to visit Vietnam in the coming days or weeks, officials and diplomats said, as Hanoi seeks to maintain good relations with all superpowers.

It also comes as Vietnam’s longstanding relationship with Russia faces tests over the war in Ukraine.

These include talks with Russia over a new arms supply deal that could trigger US sanctions.

Reuters has seen documents describing talks for a credit facility that Russia would extend to Vietnam to buy heavy weaponry, including anti-ship missiles, anti-submarine aircraft and helicopters, anti-aircraft missile systems, as well as fighter jets.

One of them, a letter sent in May by Vietnamese Prime Minister Pham Minh Chinh to the Russian government, showed interest in the possible new deal.

A Vietnamese military officer confirmed the authenticity of the letter and the talks for a new US$8 billion (S$11 billion) credit facility to buy heavy weaponry.

A spokesman for Vietnam’s Foreign Ministry did not respond to multiple requests for comment on the documents, which show Moscow pushing for months for a loan deal that would bypass Western sanctions on Moscow.

Hanoi is in similar talks with multiple arms suppliers, including the US.

In recent weeks, Vietnam has engaged in several high-level defence meetings with top Russian officials.

The upgrade in diplomatic relations to the highest level will include a security dimension, Mr Jon Finer, the US principal deputy national security adviser, told reporters on Sunday, while on the plane with Mr Biden to Vietnam from a Group of 20 summit in India.

He said he had no arms deals to announce at this stage.

But Mr Finer stressed that the US and its partners could offer Vietnam help to diversify away from Russian military supplies, an offer which he said Vietnam was receptive to. That would help Vietnam reduce military reliance on Moscow, “a relationship we think they are increasingly uncomfortable with”, Mr Finer said.

Chips, rare earths

Mr Biden’s visit comes as trade and investment ties between the two nations are growing and a long-simmering territorial dispute between Vietnam and China heats up in the South China Sea.

Highlighting Vietnam’s growing importance as a “friendshoring” destination for US technology companies, executives from companies such as Google, Intel and Boeing are expected to meet on Monday with Vietnamese tech executives and Secretary of State Antony Blinken in Hanoi.

Full details on the US-Vietnam deal have yet to be released.

Still, semiconductors are the centrepiece of an action plan adopted during Mr Biden’s visit, a US official said.

Besides possible announcements by US corporations, it is unclear how significant the US administration’s contribution to the sector could be.

The administration has only US$100 million a year for five years available under the Chips Act to support semiconductor supply chains globally. A large part of it could go to Vietnam, officials said.

More support to train skilled workers is also part of the deal, as Vietnam faces a major shortage of engineers in the chips sector.

Another key issue is strengthening supply chains of critical minerals, especially rare earths. Vietnam has the world’s largest deposits of the minerals, after China, according to US estimates, officials said.

Two people familiar with the plans said an agreement on rare earths was expected during Mr Biden’s visit, which ends on Monday when he flies back to the US.

But details are scant. Past attempts by US companies to partner with Vietnamese rare earth firms have not succeeded, said a person involved in one recent plan.

Human rights

Mr Biden will be juggling strategic interests with the defence of human rights in Vietnam. While he has often criticised China’s human rights record, he has largely stayed quiet on Vietnam.

Campaigners are fearful he may not press the subject.

White House national security adviser Jake Sullivan said before the trip that Mr Biden would raise issues related “to freedom of expression, freedom of religion, and other basic human rights”.

Last week, a US government commission accused Vietnam of backsliding on religious freedoms, saying the country was on a “similar trajectory” to China in terms of its regulation and control of religion. REUTERS, AFP