Vietnam, US to sign off on agreements worth US$15-17 billion

Vietnamese Prime Minister Nguyen Xuan Phuc speaks during an interview in Hanoi, Vietnam.
Vietnamese Prime Minister Nguyen Xuan Phuc speaks during an interview in Hanoi, Vietnam. PHOTO: BLOOMBERG

WASHINGTON - Vietnam’s Prime Minister Nguyen Xuan Phuc and United States President Donald Trump are set to unveil economic agreements totalling US$15-17 billion (S$20.8 billion-  S$23.6 billion) at their meeting in Washington on Wednesday (May 31).

Technology imports by Vietnam would be a particular focus of the deals, Mr Phuc said on Tuesday without giving details.

Mr Phuc’s visit is the first by a leader from South-east Asia to the White House since President Donald Trump took office. The two leaders are scheduled to meet for half an hour and speak through interpreters.

Earlier on Tuesday, US Trade Representative Robert Lighthizer met with Vietnamese officials to settle agreements ahead of the summit, that may see Vietnam buying more American aircraft, and could include enhanced exploitation of gas in Vietnam’s Ca Voi Xanh offshore field.

In an address at the US Chamber of Commerce on Tuesday evening, the Vietnamese premier pledged continued domestic economic reform, and said Vietnamese companies would be encouraged to invest in the US.

 Lighthizer at the same event also noted:  “Over the last decade our bilateral trade deficit has risen from about US$7 billion to nearly US$32 billion.” This “presents new challenges” he added.

The US-Vietnamese strategic relationship has been solidifying since the normalisation of relations in 1995. In January 2007, Vietnam became a member of the World Trade Organisation. A year ago, the US lifted a decades-long ban on weapons sales to Vietnam. Last Thursday, the US gifted a Coast Guard Cutter to Vietnam. 

But Vietnam was shocked by President Trump’s withdrawal from the Trans-Pacific Partnership (TPP), and is eager to enter bilateral trade negotiations, analysts said. Vietnam also wants the US to recognise it as a market economy.

“Vietnam is desperate not to be a victim of Trump’s effort to correct US trade imbalances,” Carl Thayer, Emeritus Professor at the Australian Defence Force Academy of the University of New South Wales in Canberra, wrote in an email.

“Vietnam lies sixth on the list of those with a trade surplus, but Vietnam’s thirty billion plus surplus is a fraction of China’s surplus. Vietnam needs access to the US market and… Prime Minister Phuc and other leaders have signalled that they are willing to work with the US to negotiate a bilateral free trade agreement.”