(Reworded to remove superfluous detail in paragraph 10) by Francesco Guarascio
HANOI, Sept 3 (Reuters) – The United States plans to elevate diplomatic ties with former foe Vietnam to the highest level when President Joe Biden visits Hanoi in a week, in a move that could irritate the China and whose trade implications are unclear.
Fearing the potential reaction of its much larger neighbor, Vietnam had initially expressed its caution (link) about this increase. This has led the Biden administration to step up efforts to persuade the Southeast Asian country, including through multiple visits (link) (link) by senior members of the US government in recent months.
These unprecedented efforts have led Washington to hope to be elevated to Vietnam’s top diplomatic rank, along with China and Russia, while it currently sits two notches below.
Biden said so publicly (link) in July and officials in both countries have since informally expressed optimism about the two-step raise, although no formal statement has been released by either. the other from governments.
Perhaps seeking to appease Beijing, Vietnam is discussing high-level visits to Hanoi after or even shortly before Biden’s arrival on September 10, with officials saying Chinese President Xi Jinping and Premier Li Qiang could meet Vietnamese leaders in the days or weeks to come.
The risk that a double upgrade with Washington will not be viewed well by Beijing remains high, but Vietnam’s communist leaders may have calculated that the best time to act was now, as relations with China are “likely to deteriorate”. ‘worse in the future,’ said Le Hong Hiep, a senior researcher at the Iseas-Yusof Ishak Institute in Singapore.
However, it is unclear what Vietnam, which is at odds with China over the South China Sea borders, could gain from this upgrade in the short term.
An increase in US military supplies to Hanoi has long been discussed (link), but no immediate agreement is expected as such talks take time, Hiep said.
Meanwhile, Vietnam is talking with several other countries to modernize and expand its mostly Russian-made arsenal, and has recently participated in numerous high-level defense meetings with senior Russian officials.
Supporting Vietnam’s ambitions to become a semiconductor industry hub is also part of Washington’s incentives (link), but public funds available so far under the CHIPS Act are very limited.
The United States could offer more, said Vu Tu Thanh, director of the US-ASEAN Business Council’s Vietnam office.
Energy is another sector where cooperation could intensify, with Vietnam preparing to become a player in liquefied natural gas (LNG) and offshore wind energy, although administrative delays and financing dampen (link) enthusiasm.
Improved relations are expected to boost US business ventures in Vietnam. Aircraft maker Boeing BA.N and energy firm AES AES.N could make announcements during Biden’s visit, according to people familiar with the plans. The companies did not immediately comment.
The United States is already Vietnam’s biggest export market and US customs procedures could be eased to boost trade, said Thanh of the US-ASEAN Business Council.
2023-09-03 08:30:29
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