Bloomberg: Vietnam Looks to Salvage Obama Trade Gains in Trump Visit
30 May 2017
Vietnamese Prime Minister Nguyen Xuan Phuc has a tough task when he visits the White House this week: Convince President Donald Trump to advance trade ties that blossomed under the Obama administration.
To do so, Phuc plans to highlight all the U.S. jobs his nation supports through imports of American goods like airplanes, engine turbines and maize. Vietnam respects Trump’s exit from a Pacific trade pact agreed to under Barack Obama, and the two sides are working on “new mechanisms” to boost bilateral trade, Phuc said in an interview with Bloomberg Television’s Haslinda Amin.
“Vietnamese imports from the United States have increased significantly,” Phuc said during the May 27 meeting at his office in Hanoi. “We will sign billions of dollars worth of deals with American firms and import lots of meaningful high-value products from the United States that will help create American jobs.”
Vietnam wants its former enemy more engaged in the region to balance relations with China — its neighbor, main trading partner and top geopolitical threat. Phuc is betting that promises of American jobs — Trump’s primary campaign pledge — will persuade him to focus more on the strategic benefits of closer trade and security ties.
Relations between the U.S. and Vietnam have strengthened in the four decades since a war that killed almost 60,000 American servicemen and probably more than 1 million Vietnamese. Trade between the nations reached $47 billion last year from almost nothing in 1994, when former President Bill Clinton lifted a trade embargo.
In recent years the U.S. and Vietnam have found common ground over worries about China, which has used its increased military muscle to assert control over disputed reefs in the South China Sea. Vietnam fought a border war with China in 1979 and remains suspicious of its neighbor, despite its similar Communist political system and growing trade ties.
‘More Than Friends’
“The role of the U.S. in the region is important — that is indisputable,” said Tran Viet Thai, a deputy director general at the Diplomatic Academy of Vietnam in Hanoi, where the country’s diplomats are trained. “We want to be more than friends. We want to be partners with the U.S.”
Hanoi’s leaders want to reduce Vietnam’s economic dependence on China while further integrating with global markets, including the U.S. China accounted for 21 percent of Vietnam’s total international commerce in 2016, nearly double from a decade earlier, while the U.S. accounted for about 14 percent.
The Obama administration made the Trans-Pacific Partnership a priority in part to counter China’s economic leverage in Asia. He also expanded security ties: The U.S. lifted a ban on lethal arms sales, started joint naval drills and sent two warships to the Cam Ranh Bay naval base for the first time in decades.
Trump signaled this month that he’ll continue to press China on its territorial claims. His administration handed over six Coast Guard patrol boats to Vietnam and drew a rebuke from Beijing for conducting a so-called “freedom of navigation operation” near a China-claimed reef in disputed waters.
Strategic Role
Those moves will help ease concerns within Vietnam that Trump will seek to placate China in the South China Sea for cooperation in pressuring North Korea over its nuclear program, according to Alexander Vuving, a Vietnam political analyst at the Asia-Pacific Center for Security Studies in Hawaii.
“The Trump administration is very interested in advancing the relationship with Vietnam because it sees the strategic role Vietnam places in Asia,” he said.
In the interview, Phuc deflected a question on whether Vietnam seeks a stronger U.S. presence in the South China Sea. The Philippines, a country that had previously aligned with Vietnam in opposing China’s claims, has recently sought direct talks with China over disputed territory in the waters.
“We would need to discuss together with the stakeholders to make sure that all parties will benefit from whatever action that we decide to take to ensure peace in this area,” Phuc said of the South China Sea.
Phuc was more expressive on the need to form a consensus with the U.S. on trade. Vietnam had stood to be one of the biggest beneficiaries of the TPP until Trump pulled out, and suddenly found itself on a list of 16 nations that he called “cheaters” for contributing to the bulk of America’s trade deficit.
‘No Cheating’
Phuc, who will be the first Southeast Asian leader to visit Trump’s White House, pushed back against that categorization. He said that Vietnam doesn’t artificially lower the prices of catfish and shrimp — important commodities in southern U.S. states that formed part of Trump’s base.
“We don’t cheat. There’s no cheating of any kind of products that we export to the United States,” Phuc said. “And we have all the proof to prove it.”
Phuc sought to emphasize the positive aspects of trade, and touted the merits of globalization and “huge opportunities” for the two sides to cooperate in sectors like energy, infrastructure, finance and the digital economy. He declined to say directly if Vietnam planned to enter bilateral trade talks with the U.S., even as he expressed optimism over Trump’s commitment to economic liberalization.
“I hope that the U.S. will continue to step up its cooperation agendas, especially in trade, thus contributing to prosperity in the region and the world,” he said. “There remains enormous untapped potential for economic cooperation.”