MARY LOUISE KELLY, HOST:
President Biden has wrapped up his visit to Hanoi, where he met with top Vietnamese Communist Party officials. The leaders signed a comprehensive strategic agreement. The goal is to increase bilateral trade, which has already been booming. NPR international affairs correspondent Jackie Northam reports.
JACKIE NORTHAM, BYLINE: President Biden's visit to Hanoi elevated diplomatic relations to a new level. But it was trade and investment that dominated conversation. It's a long way from the bitter and protracted war the two countries fought five decades ago. Ted Osius was the U.S. ambassador in Vietnam from 2014 to 2017 and is now CEO of the US-ASEAN Business Council. He says bilateral trade between the former enemies has steadily grown over the years, reaching $138 billion last year.
TED OSIUS: Think of how far we've come in 30 years from almost zero economic exchange to these major investments in the U.S. economy. That's pretty dramatic.
NORTHHAM: As part of the agreement, both sides pledged to create favorable conditions to further open up markets for goods and services, support trade and economic policy. It calls for greater cooperation in science, technology and digital industries. Jonathan Lichtefeld is a Southeast Asia specialist at the Asia Group in Washington, D.C.
JONATHAN LICHTEFELD: There will be strong focus on U.S. support for Vietnam's development of its innovation economy, and that includes things like supporting semiconductor development, you know, workforce development and secure supply chains.
NORTHHAM: There's also a push towards clean energy, including solar panels. Ambassador Osius points to VinFast, a company producing electric vehicles, which he says is one of the first movers in terms of Vietnamese investment in the U.S.
OSIUS: They've built a manufacturing plant in North Carolina, and they have a headquarters - U.S. headquarters in Los Angeles. They're producing these high-tech, good electric vehicles. And they really responded to a call from the United States, which is, we want more manufacturing here.
NORTHHAM: But Vietnam still has to straddle between its former enemy and its powerful neighbor, China. Jonathan Stromseth is a Vietnam specialist at the Brookings Institution.
JONATHAN STROMSETH: But Vietnam's largest trading partner is China by a pretty good margin. And a whopping one-third of Vietnam's imports come from China. And these imports are indispensable to Vietnam's manufacturing supply chain, especially in key sectors like electronics. So this gives, you know, China a lot of leverage.
NORTHHAM: Warming relations between the U.S. and Vietnam come at a time when China is ascending in the region. Linh Nguyen is a Singapore-based analyst with Control Risks, a global risk consultancy. She says Vietnam's leadership can handle dealing with China and the U.S.
LINH NGUYEN: Vietnam also a master in diplomatic balancing. You can't find any other countries in Southeast Asia that could play between superpowers as good as Vietnam.
NORTHHAM: Despite the agreement, there are still stumbling blocks to a full-fledged relationship between the U.S. and Vietnam. There are opposing political systems - one capitalist, the other communist. There are a lack of labor laws in Vietnam and different regulations, especially around tech, says the Asia Group's Lichtefeld.
LICHTEFELD: And, you know, will Vietnam be following a pathway more like China, where things are very locked down, or are they going to, you know, take a pathway that's, you know, at least somewhat more cooperative with the private sector?
NORTHHAM: The other issue is trust, says Linh Nguyen. The war wasn't all that long ago.
NGUYEN: Vietnam could never look at the U.S. like other countries. But business is business, and we have to look forward rather than looking back.
NORTHHAM: Nguyen says the U.S. granting Vietnam's request to become a market economy would go a long way to building up trust. The U.S. has noted the request.
Jackie Northam, NPR News. Transcript provided by NPR, Copyright NPR.
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