What happened when Nguyen Xuan Phuc went to the White House?

Photo: Peter van der Sluijs/Wikimedia Commons

Nguyen Xuan Phuc will be the first Southeast Asian leader to visit Trump’s White House in a three-day visit beginning May 31. He is there for economics while Trump needs a strategic friend.

by Francesca Ross and Duc Nguyen

Vietnamese Prime Minister Nguyen Xuan Phuc was the first Southeast Asian leader to meet with American President Trump at a landmark meeting in Washington on May 31.

The Vietnamese administration lobbied hard for this encounter and its outcome has been watched closely for indications of Trump’s attitude to the region. Trump said trade was top of his agenda and announced billion-dollar orders from American companies that would bring jobs to the U.S. and new equipment to Vietnam.  Military cooperation, war reparations, and regional tensions were also expected to be discussed.

Representatives from General Electric said they had agreed a US$5.6 billion deal for power generation, aircraft engines and services. This is the largest single combined sale with the country in the company’s history. Caterpillar Inc also revealed a deal for an undisclosed amount that would provide generator management technology for more than 100 systems.

Phuc said he expected to sign a total of US$15 billion to US$17 billion of deals for US goods and services during his visit. These would mostly consist of technology products and services.

Trump has said he wants to build on existing cooperation with Vietnam

Phuc was one of the early phone calls Trump made as President in December 2016. He said then that he wanted to “accelerate the relationship between the two countries” by increasing cooperation. He has also noted the significant, and growing, trade deficit between the two countries –  around US$ 32 billion in 2016.

U.S. trade in goods with Vietnam (US$ million, nominal)

Source: U.S. Census Bureau

The Vietnamese leader would have also been interested in talking trade. His country was one of those hit hardest by Trump’s decision to drop the Trans-Pacific Partnership (TPP) global trade deal. When he did so, the American President said he would instead negotiate one-on-one deals with the affected countries. The Vietnamese-American relationship will be the first test of that promise.

Phuc might not have got an easy answer. Currently a fifth of Vietnamese exports make their way to America but Trump wants to encourage more domestic production by introducing a border adjustment tariff on imported goods. This would reduce Vietnam’s gross domestic product by almost 0.9% and may be a driving factor in Vietnam’s aggressive courting of a relationship with the new U.S. president.

North Korea loomed large on the discussions

Military matters were also raised in the conversation between the two men. America recently delivered six coastal patrol vessels to Vietnam and this show of support is welcome when tensions over the South China Sea and North Korea remain high.

Trump said the two men had discussed North Korea.  Phuc will also have been interested to hear Trump’s position since the recent thawing of his attitude to China. Phuc may well have raised the U.S. promise to clean up the toxic Agent Orange plant killer that the American military sprayed heavily across the country during the Vietnam War.

“The Vietnamese prime minister will want to explore U.S. plans and goals for engagement with the larger Southeast Asian region,” said Murray Hiebert of the Center for Strategic and International Studies.

“Vietnam will also want to understand U.S. policy and strategy toward the South China Sea and China’s activities there, particularly at a time when Washington is looking to Beijing to rein in North Korea’s nuclear and missile programs,” he added.

“Vietnam’s future prosperity depends upon a stable and peaceful maritime environment,” said U.S. Ambassador Ted Osius. However, Trump’s push to cut spending on foreign interventions means Vietnam could also find American military donations being converted to loans.

Pham Quang Vinh, Vietnam’s ambassador to the U.S., has said his country was committed to independence, self-reliance, diversification and multilateralisation of foreign relations in its diplomatic efforts. Boosting ties with America, regionally and internationally, was also important, the ambassador said.

Vietnam’s was in a strong position

This is an opportune moment for Vietnam to achieve its foreign policy goals and on the surface Phuc seems to have got a good deal from the U.S. America’s traditional strongest partner in the region, the Philippines, is turning away from its old friend and embracing China. Trump needs new friends, and fast.

Vietnam is also being courted by China. President Xi’s government is looking to build one-on-one relationships with its regional neighbours – just as America seeks to do. This has seen the Chinese authorities flex their soft power muscles by encouraging waves of Chinese visitors to take trips to Vietnam’s tourist spots. This flood of income makes China an attractive ally for Hanoi’s ambitious officials.

Nguyen Phu Trong, the Vietnamese ruling party’s chief went to China in January 2017 and was widely feted by the Beijing authorities. Trong does not seem to have been swayed by these efforts. Vietnam knows it is better to keep both global super powers in its back pocket.

This is because Hanoi is suspicious of Chinese intentions thanks to a long and chequered history with Beijing, but its experience with America is not much better. A comprehensive partnership has only been in place since 2013. Trump knows that Vietnam is important and so does Xi Jinping. Phuc should not undersell his hand to either of them.

Vietnam could reap significant economic benefits from this visit

Phuc met a number of prominent decision-makers during his three-day visit. His schedule included meetings with assembly members from both the Democratic Party and Republican Party.  U.S. entrepreneurs also enjoyed time with the Vietnamese leader.

In its simplest form, this meeting was about politics versus economics. The U.S. is looking to a relationship with Vietnam that means it can maintain a voice in Southeast Asian policy and cooperation. Vietnam was looking for a deal that can support its 6.7% economic growth target.

Southeast Asian leaders now know a little more about what they ae dealing with from Trump’s White House – Big deals, big business and big guns.