Vietnam Time

5/26/2016 3:47:08 PM

Expectations through Obama’s trip to Vietnam

The three-day trip of US President Obama has received great attention from the majority of people in the country.  Many expectations were placed on the visit, most notable of which are the deepening of trade and investment relations between the two countries and the complete normalization of relations.

A push for TPP

One of the most interested topics during Obama’s visit was the Agreement on the Trans-Pacific Partnership (TPP) which was signed by 12 countries including Vietnam and the United States earlier this year.  The agreement is expected to create a new chapter in trade relations and investment between the US and Vietnam.

The World Bank said, Vietnam will be among countries most benefiting from this agreement, and TPP will help Vietnam’s economy grow by 10%  from now to 2030, largely through the textile industry.

Besides that, the visit of President Obama is expected to open up opportunities for bussiness cooperation between the two countries.

According to Deputy Minister of Industry and Trade Tran Quoc Khanh, chief negotiator for TPP, since the normalization of Vietnam – US relations, the two sides have made significant steps in the fields of politics, diplomacy and economics.

Especially since Vietnam signed the bilateral trade agreement (BTA) with the US in 2000, bidirectional trade turnover between the two countries has continuously increased over the years.

By 2015, trade turnover reached over 41 billion US dollars, increasing 27 times compared to 2001. So far, the United States is the largest export market and 19th largest commercial partner of Vietnam.

Investment activities have also boomed, with nearly 800 projects and a total investment of 11 billions US dollar. Moreover, if counting investment properties from the US through third countries, the figures are even larger.

When the Agreement on Trans-Pacific Partnership is in effect, trade relations and investment with the US is predicted to rise further.

Completely normalized relations

Before the President arrived in Vietnam, he was widely expected to announce a full lifting of the ban on lethal weapons sales to Vietnam that has been in place since the U.S – backed South Vietnamese government fell in 1975.

The embargo was first relaxed in 2007 to allow for the sale of “non –lethal” defense goods and services to Vietnam under the International Traffic in Arms Regulations (ITAR). In 2014, Obama partially lifted restrictions to allow for the sale of “lethal” weapons and defense service on a case-by-case basis to Vietnam for the limited purpose of maritime security and domain awareness.  

On the 20th anniversary of the normalization of bilateral relations in 2015, Vietnamese Minister of National Defense General Phung Quang Thanh stated, “The full removal of the restriction would show trust and respect between the two countries.”

On May 23rd, the US President Obama’s decision to fully lift the ban on weapons sales to Vietnam was a historic move. It not only shows that the bilateral relations have been completely normalized, but is also indicative of trust.

While Vietnam will be not a major buyer of US weapons even after the ban is lifted, the symbolism of the move is most important./.

  ( Ha Thuong )
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