top of page

Vietnam and the World: Focus on the US and India



Of the flurry of diplomatic activities that have taken place during the past three-four months in the Asia Pacific regions, the visit of Vietnam President Truong Tan Sang to the US on 24-27 July 2013 and his summit meeting with President Barack Obama has not received the desired attention of the analysts and the media. The importance of this visit in the wake of China’s assertive stances on territorial issues in the region, Vietnam’s concerns over China’s claim to almost all of the South China Sea and Obama’s Asia ‘pivot’ policy cannot be overlooked. Tan Sang’s visit came at a time when Vietnam is facing increasing pressure to decide its future. Obama used this opportunity to persuade President Sang to steer a course for democracy, though at this transitional stage a brief spell of military control of the government may be desirable as was the case with Taiwan and South Korea, protests from human rights activists notwithstanding. It was the first time President Sang visited Washington and only the second time a Vietnamese president ever visited the Oval Office since the US and Vietnam normalized relations on 11 July 1995. Vietnam has learnt that in diplomacy there are no permanent enemies but only friends. It is a quirk of history that almost four decades after the Vietnam War ended, Vietnam is increasingly looking at the US for strategic assurance in view of the perceived threat from China. Vietnam’s insecurity stems from China’s belligerent posture in recent times, especially its claims over the South China Sea and violation of international code of conduct with impunity. In view of this, there is a broadening of consensus in terms of perception that China is posing a threat to Vietnam’s sovereignty and territorial integrity.

Does the US see this opportunity to induce Vietnam to transform into a democratic system, given that the tensions between China and Vietnam are contributing to the latter’s increasing reliance on the US trade and investment? The increasing bonhomie between the US and Vietnam provides a window of opportunity for democratic change in Vietnam. The civil rights organizations see that Vietnam’s vulnerability stems from the unrelenting aggression from China as it cannot resist aggression from China on its own. Vietnam needs friends. It therefore has been making conscious decisions to join with the US and other ASEAN countries for a common front to meet the China challenge. The visit of Vietnamese Foreign Minister Pham Binh Minh to India in early July 2013 should also be seen from this perspective. This is because both India and Vietnam are working together to strengthen the strategic bond for peace and prosperity in the Indo-Pacific region.

The strategic environment in Vietnam’s neighbourhood is changing rapidly and the socio-political changes also going to impact Vietnam’s foreign policy discourse. After decades of military dictatorship, Myanmar is going through systemic transformation and the slow transition to democracy is being welcomed by the international community. The Myanmarese leadership is keeping its promise to release all political prisoners by the end of 2013, in order to see “all to be able to contribute towards the betterment of the country.” Vietnam’s neighbor, Cambodia, also had elections, and its opposition leader was allowed to return from exile. These changes confront Vietnam with the question on what course it must choose. Notwithstanding the gusty nature of the Vietnamese military to confront any outside threat, there are limitations. The people in general ought to be on board, which implies that the views and opinions of the dissidents and opposition have to be respected so that a national consensus is arrived at on what kind of strategy the country adopts for its foreign policy.

Could Myanmar be an example for change in Vietnam? While the changes in Myanmar were internally driven, what Vietnam needs is a push from the outside and that can make a difference. The reform-minded within the government who are in a minority needs to be co-opted in decision-making process.

What did President Sang achieve from his US visit? The biggest visible gain was upgrading the bilateral relationship to a “strategic partnership.” Indeed, one of the diplomatic goals of Vietnam is to establish a strategic partnership with each of the permanent five members of the UN Security Council. The US was the only one left with which it did not have a strategic partnership. In a speech he gave on 24 July, President Sang expressed his country’s desire to see a stronger footprint by the US in the Asia-Pacific region. He observed: “Amidst a changing regional and world landscape, the major powers, including the United States, have an important role and responsibility in dealing with hotspots in the region such as the East Sea – East China Sea”. Though many members of the Congress urged the White House to seize the opportunity and enable a change in Vietnam that will benefit its people, it remains unclear how the US and Vietnam balance human rights, trade and geopolitical considerations which will be watched by many in the region, not the least China.

Significance of the Joint Statement

In the joint statement that was issued on 25 July, the two Presidents affirmed their commitment to opening a new phase of bilateral relations between Vietnam and the US based on mutual respect and common interests. During the meeting on 25 July, the two Presidents affirmed their commitment to opening a new phase of bilateral relations between Vietnam and the US based on mutual respect and common interests. President Sang’s visit comes at an important time for both nations, reflecting a shared desire to build a forward-looking relationship between the two countries. Both the Presidents decided to form a US-Vietnam Comprehensive Partnership to provide an overarching framework for advancing the relationship. They underlined the principles of the US-Vietnam Comprehensive Partnership, including respect for the United Nations Charter, international law, and each other’s political systems, independence, sovereignty, and territorial integrity. They stated that the Comprehensive Partnership is intended to contribute to peace, stability, cooperation, and prosperity in each country, in the region, and in the world. The new Comprehensive Partnership will create mechanisms for cooperation in areas including political and diplomatic relations, trade and economic ties, science and technology, education and training, environment and health, war legacy issues, defense and security, protection and promotion of human rights, and culture, sports, and tourism.

Political and Diplomatic Cooperation

As part of the Comprehensive Partnership, the two sides agreed to increase high level exchanges as well as contacts at all levels, and to intensify dialogue and cooperation mechanisms. President Obama affirmed the US support for Vietnam’s independence, sovereignty, prosperity, and integration into the international community. President Tan Sang welcomed the US’ enhanced cooperation in the Asia-Pacific, which contributes to the peace, stability, and prosperity of the region. The Presidents welcomed the establishment of a regular dialogue between their two foreign ministers, and encouraged dialogues and exchanges between entities associated with political parties in both countries.

Both agreed to enhance cooperation at regional and international forums including The Asia Pacific Economic Cooperation (APEC), the Association of Southeast Asian Nations (ASEAN), the ASEAN Regional Forum (ARF), the East Asia Summit (EAS), and the ASEAN Defense Ministerial Meeting Plus (ADMM+) to support peace, stability, cooperation, and development in the Asia-Pacific region. The two Leaders reaffirmed their support for the settlement of disputes by peaceful means in accordance with international law, including as reflected in the United Nations Convention on the Law of the Sea. The Presidents also reaffirmed their support for the principle of non-use of force or threat-of-force in resolving territorial and maritime disputes. The Presidents underscored the value of full observance of the Declaration of Conduct of Parties in the South China Sea (DOC) and the importance of launching negotiations to conclude an effective Code of Conduct (COC).

Trade and Economic Ties

In the trade and economic field, both the leaders recalled the discussions in Cambodia in November 2012, and reaffirmed their commitment to conclude a comprehensive, high-standard Trans-Pacific Partnership (TPP) agreement as soon as possible in 2013. It was envisioned that a 21st-century TPP agreement will advance regional economic integration, further development objectives, and lead to the creation of jobs in the US, Vietnam, and all TPP countries, while taking into account the diversity of the participants’ levels of development in the context of a comprehensive and balanced package.

The Presidents welcomed continued efforts to further bilateral economic, commercial, and investment ties, and President Obama noted Vietnam’s reform efforts as a developing economy. They underlined the critical value of these efforts to advancing the bilateral relationship, and the importance of economic cooperation as a foundation and engine for the new US-Vietnam Comprehensive Partnership. The Presidents agreed to enhance cooperation under the US-Vietnam Trade and Investment Framework Agreement (TIFA) Council as well as under the ASEAN Enhanced Economic Engagement initiative and in APEC to increase economic and trade engagement in line with the bilateral Comprehensive Partnership and shared objectives in the World Trade Organization (WTO), APEC, and ASEAN fora. President Obama applauded Vietnam’s progress in economic reform and noted Vietnam’s interest in pursuing market economy country status. He is committed to intensifying America’s constructive engagement with Vietnam on its economic reforms. The Presidents acknowledged Vietnam’s intention to accede to the Cape Town Convention on International Interests in Mobile Equipment (CTC).

While acknowledging the importance of growing commercial ties between the two economies, both the presidents made special mention of the MOU signed between PetroVietnam and US Export-Import Bank to support trade and investment in the petroleum and energy sectors in Vietnam; the Framework Heads Agreement on the Ca Voi Xanh offshore Vietnam development project between Exxon Mobil Corporation and PetroVietnam; the Cooperation Agreement between Murphy Oil Corporation and PetroVietnam Exploration Production Corporation (PVEP); an MOU between Metropolitan Life Insurance Company (MetLife) and Bank for Investment and Development of Vietnam (BIDV); and the Vietnam Ministry of Finance’s approval in principle for establishment of a fund management company by ACE Insurance.

Vietnam and the US signed the landmark bilateral trade agreement in 2001. The two-way trade has increased 50-fold since 1995. The per capita incomes in Vietnam have increased almost 500 percent. Together with Vietnam and other countries from across the region, the US is working to conclude an historic TPP, a high-standard 21st century trade agreement that will promote regional economic integration, prosperity, and opportunity for the people of all of the member countries.

Defense and Security

Cooperation on defense and security matters is a new dimension in the Vietnam-US ties. A Memorandum of Understanding on Advancing Bilateral Defense Cooperation was signed in 2011 and both leaders reaffirmed their commitment to its full implementation. It was agreed that the US-Vietnam Defense Policy Dialogue be continued and opportunities to review defense and security relationship for future cooperation be kept open. Other areas for cooperation that were identified are enhancing capabilities such as search and rescue and disaster response. The Presidents also underscored the importance of enhanced cooperation in non-traditional security matters and agreed to work more closely to counter terrorism; enhance maritime law enforcement cooperation; combat transnational crime including piracy, and narcotics, human, and wildlife trafficking; and address high-tech crime and cyber security. Vietnam has decided to participate in UN peacekeeping operations and Obama welcomed this initiative. On his part, Obama emphasized the US desire to assist with training and other support for this effort through the Global Peace Operations Initiative (GPOI).

Integrating with the world.

As Vietnam has transformed itself, the country is now placing an increasingly significant role on regional and on global issues. Vietnam has announced that it intends to participate in UN peacekeeping operations in 2014. Vietnam is also getting increasingly involved in maritime security and humanitarian assistance issues and disaster relief capabilities. On its side, the US is focusing its assistance programs on adaptation, clean energy, sustainable development in order to address Vietnam’s vulnerability to climate change. The issue Lower Mekong Initiative was discussed at the recent APEC conference in Brunei.

The process of normalization began with George Herbert Walker Bush, who, together with Brent Scowcroft, made courageous decisions to move the process forward and lift an embargo, and it wound up with President Clinton, who not only ultimately moved to normalization, but took the first trip of an American president in the year 2000. Forty-five years ago, hundreds of thousands of Americans were fighting in the fields and rivers of Vietnam. Today, hundreds of thousands of Americans are visiting its marketplaces and its historic sites. The bilateral ties have traveled a long way.

Thus it transpires that following 25 years of reforms, Vietnam has graduated from underdevelopment to become a middle-income country. It has registered a sustained high growth rate, and achieved ahead of schedule a number of Millennium Development Goals. The country’s policy is geared to maintain the growth momentum, continue improving people’s life, restructure the economy, and step up administration reform and anti-corruption. Externally, the country is pursuing the foreign policy of positive, active international integration following the nonpermanent membership of the UN Security Council in 2008, 2009, and ASEAN chair in 2010.

Vietnam is increasingly getting engaged with a number of multilateral agencies, besides preparing itself to participate in the UN peacekeeping forces. Vietnam earnestly wants to be a responsible, reliable member of the international community with positive contribution to addressing international issues for the maintenance of peace, stability, and cooperation in Southeast Asia and Asia Pacific. Amidst changing regional and world landscape, the major powers, including the US, have an important role and responsibility in dealing with hotspots in the region such as the East Sea – East China Sea and such global issues as energy security, food security, transnational crime, climate change, and so on. This has become ever more imperative. In that spirit, Vietnam welcomes the US enhanced cooperation with the Asia Pacific and Asia ‘pivot’ policy.


Another significant development in Vietnam’s foreign policy is its developing close relationship with India, which, both have found complimentary and of converging interests. From Indian side, its ties with Vietnam have a special place in its foreign policy, which has developed into a strategic partnership. Like Aung San Suu Kyi of Myanmar whose father was posted in India and she had her education in India, the present foreign minister of Vietnam, Pham Binh Minh was born in India where his father was posted as a diplomat. Surprisingly, as compared with the Chinese media, the Indian media did not give the kind of coverage that Binh Minh’s visit to India in July 2013.

Was it deliberate policy of India to underplay the importance of the visit given the Chinese reaction to India-Vietnam oil exploration deal in the South China Sea? Though this could not be the case, China is not comfortable with Vietnam’s commitment for a strategic partnership with India and its charting the future roadmap in reinforcing the ties. The Foreign Minister was in India to participate in the 15th Vietnam-India Commission meeting to review bilateral ties.

India’s Defence Minister A K Antony and Foreign Minister have reassured India’s commitment to support Vietnam’s stance on the South China Sea issue. It was natural therefore, Binh Minh’s speech at the Indian Council of World Affairs on 12 July 2013 was appropriately titled “Strengthening Vietnam-India Bonds for Peace and Prosperity in the Indo-Pacific”. The minister dwelled on two major themes: global and regional changes affecting the Asian security environment; and India’s ASEAN’s roles in the evolution of the regional architecture. He sketched the global shift of power to Asia and the attendant focus on the Asian region of major powers. He identified four major developments impacting the shaping of the Asian security environment. These are (a) China’s spectacular rise, (b) America’s strategic rebalancing of forces in Asia Pacific, (c) India’s Look East policy, and (d) a greater role by Japan. It is in this context, the international community has an enormous responsibility to observe and respect international law and conventions as well as having faith in multilateral dialogue process for any conflict resolution.

The foreign minister focused on Asia’s rise and the profound changes taking place in Asia and the world and the way both India and Vietnam are positioned to respond to those changes. Indeed, “the global financial crisis has brought about structural movements in the global economy, in growth models and strategies, in the trends in manufacturing, consumer and financial markets and in the increasing connectivity of economies and regions”. The nature of power politics has been fundamentally altered as new economies emerge to play their new roles. As a result relationship among major powers is no longer the exclusive domain of leading industrial nations as there are new players seeking a greater and assertive roles.

Asia has become centre of gravity, the engine of world growth and economic recovery. Despite the downturn in global economy, Asian economies still register strong growth. For example, in 2012 that reached 7.6%. One notable feature of Asia’s growth is the simultaneous emerging regionalism. There are a total of 76 free trade agreements and the Asia-Pacific leads the world in the drive for economic integration in the absence of progress of the Doha Round. In the coming years, the number of FTAs and other forms of economic linkage will continue to rise. For example, along with the process of ASEAN Community, there is a gradual emergence of the Regional Comprehensive Economic Partnership (RCEP), Trans Pacific Partnership (TPP), Northeast Asia Free Trade Area, Enhanced Economic Engagement between ASEAN and the United States, and Mekong Sub-regional cooperation. The scope of activities within ASEM and APEC now expands to cover non-traditional issues.

India has taken a principled stand on security and freedom of navigation along major maritime routes and the need to de-escalate tensions in the East and South China Seas by dialogue mechanism as opposed to China’s approach to deal bilaterally. In terms of regional architecture and the roles of ASEAN and India, Binh and Minh spelt out Vietnam’s and ASEAN’s expectations from India of leveraging and exercising her growing political, economic and strategic leverages to safeguard regional peace and stability in the Indo-Pacific region.

In economic terms, India has a vital role to play in contributing to regional growth ‘through the growing web of FTAs and PTAs with ASEAN and other countries and increasing two-way flow of investments with rest of Asia’. In pursuance of its Look East policy, the India-ASEAN Strategic Partnership for Peace and Shared Prosperity was established in 2012. This took India’s cooperation with Vietnam and ASEAN as a whole to a new height. Indeed, India’s presence in Southeast Asia has become visible in many fields: political, economic, trade, defence and energy cooperation. Impressive statistics testify to this: bilateral trade volume between India and ASEAN reached $80 billion in 2012. The Free Trade Agreement on Goods between India and ASEAN has created a linkage between two giant markets with 1.8 billion consumers and total GDP output of $ 3 trillion.

The minister observed: “Strategically, India commands a geo-political location that straddles the land and maritime space between East and West. As the founding and leading member of the Non-Aligned Movement, the country holds high prestige and role in the developing world. India and its relations with other powers have long formed a component of the regional security structure. More importantly, India is proving to be among leaders of global importance and influence.”

Despite this impressive stride, the potentials are enormous and can be tapped and explored further. Inter-regional initiatives such as linking the Mekong-Ganga Initiative and between ASEAN and the South Asian Association for Regional Cooperation (SAARC) are areas in which India helps in a meaningful way, such as cooperation in the Lower Mekong to which Japan, the United States and Korea are parties to, and initiatives for connectivity in infrastructure, land and maritime transport. In recognition with India’s engagement with ASEAN politically and economically, as a responsible and proactive member of ASEAN Vietnam stands ready to be at the forefront of the cooperation between ASEAN and India.

At the bilateral level, both India and Vietnam treasure their long history of interaction. The Indian civilization has left its visible and invisible marks in Vietnamese culture. Since the founding of modern Vietnam in 1945, Vietnam has seen India as a faithful friend and vice versa. Nurtured over years, mutual trust is the most important heritage that has strengthened the bond between the two countries. This bond only became strong when Vietnam passed through a period of turbulence, a vision which the late President Ho Chi Minh and late Prime Minister Jawaharlal Nehru had nurtured and intended.

The Strategic Partnership between the two countries, established in 2007, set out very clearly the five pillars of cooperation. These are: political, defense and security cooperation, economic cooperation and commercial engagement, closer trade and investment, science and technology, cultural and technical cooperation, and cooperation at multilateral and regional forums. During his state visit to India by President Sang in 2011, both India and Vietnam agreed on more concrete steps and targets that both sides should work on. Among those, a target to bring annual two-way trade to $ 7 billion by 2015 was set.

Bilateral visits by top political leaders have set the tone for consolidation and further expansion of bilateral ties. Kapil Sibal, the Indian Minister of Communication and Information Technology, visited Vietnam in June 2013 and reached a number of agreements with his Vietnamese counterpart. In the upcoming years, Vietnam will choose IT as a foundation for new development model. Vietnam looks to India as a leading IT industry powerhouse in the world for help and support. Vietnam and India should set up joint ventures in IT, making full use of India’s advantage in software and Vietnam’s hardware products.

Vietnam has a lot to offer in terms of trade and investment. Vietnam supports Indian businesses to explore more opportunities in oil exploration, electricity, science and technology and agriculture. A vivid example is that Tata Power has won a $ 1.8 billion contract to build the thermal power plant Long Phu 2 in the province of Soc Trang, thus taking India from 40th to 12th biggest foreign investor to Vietnam. The potentials are huge and both need to work together to tap into those opportunities.


It transpires that Vietnam is slowly but steadily deepening its engagement with the outside world. The single most important factor, besides economic imperatives, that is driving Vietnam’s external policy is strategic considerations. Given the bitter past experience with China and the recent assertiveness and brinkmanship making the smaller Asian nations uneasy about its intentions, Vietnam, like other smaller Asian nations, is strengthening bonds with old friends and looking for new friends. President Sang’s US visit and Foreign Minister Binh Minh’s India visit should be seen from this perspective. China is notorious for boasting a “state of denial” for its aggressive postures and the rest of Asia would be too naïve to accept this. The territorial disputes with Japan over Senkaku islands, the boundary disputes with India, the contending claims in South China Sea and China’s violation of international code of conduct governing the laws of sea and many others are disturbing signals and all these are driving the rest of Asia to find common ground to meet the China challenge. Their efforts to integrate China economically have failed. As a result, the rest of Asia, including ASEAN, expects India to play the role of the ‘regional balancer’ and a counterweight to China in the Asia-Pacific.

The question that remains unanswered is: Is India prepared to assume the role of ‘regional balancer’ or prefers to take cover over its strategic ‘Risk Aversion Policy’ while dealing with China? With the support of the US and in response to the high expectations from the rest of Asia (minus China), it is desirable India takes up a leadership role in Asian affairs. While it is not suggested that India must lead or join a front against China, as a matured player in Asia, India cannot shirk its responsibility to see that peace and order is maintained in Asia by its proactive policy.

( The writer, Dr Rajaram Panda, is a Visiting Faculty at the Centre for Japanese, Korean and Northeast Asian Studies, Jawaharlal Nehru University, New Delhi and Visiting Fellow at the Institute of Peace and Conflict Studies, New Delhi. Email:

0 views0 comments


bottom of page