BGA Senior Adviser Amb. Scot Marciel wrote an update to clients on U.S. President Joe Biden’s upcoming visit to Vietnam.

Context

  • President Biden’s September 11 visit to Vietnam is expected to result in the formal upgrade of the bilateral relationship to a strategic or comprehensive strategic partnership. Although such upgrades are often largely symbolic, this one would be geostrategically powerful, particularly if — as many expect — it is a two-step upgrade to a comprehensive strategic partnership, the same level China enjoys with Vietnam. Nevertheless, it should not be seen as a shift to alignment with the United States against China.
  • The visit and upgrade will pave the way for even closer cooperation, with already substantial economic relations likely to lead the way. Washington has signaled its interest in using this visit to support Vietnam’s development as a key cog in global supply chains, including for technology.

Significance

  • Biden’s decision to prioritize a visit to Vietnam over attending the Association of Southeast Asian Nations (ASEAN) summit in Indonesia reflects the importance the United States attaches to relations with Vietnam and the opportunity to upgrade the relationship. Vietnam has long demurred on the U.S. request for such an upgrade due to concern that Beijing might respond harshly. One can expect a senior Chinese leader to visit Hanoi after Biden’s visit to demonstrate that Vietnam-China ties remain strong.
  • The two governments have been coy on whether the upgrade will be one step to a strategic partnership or two steps to a comprehensive strategic partnership, a level Vietnam now has only with China, Russia, Korea and India. The latest indications are that a two-step upgrade is likely, but that has not been confirmed.
    • In one sense, an upgrade is largely symbolic. The two governments already can cooperate in all areas. There is no automatic boost in cooperation from an upgrade.
    • However, an upgrade will send a clear message that both governments value the relationship and intend to continue building it. A two-step upgrade would send that message even more dramatically. On a practical level, an upgrade gives a green light to the respective bureaucracies to expand cooperation.

Implications

  • The White House has not offered details on trip-related deliverables, but BGA sources indicate that business has a limited role in the visit because the schedule will be tight. About 30 U.S. and Vietnamese companies will likely have a dialogue with senior U.S. officials. The White House noted in its visit announcement that the leaders would discuss ways to promote a “technology-based and innovation-driven Vietnamese economy” along with workforce development programs.
  • Biden likely will announce initiatives to encourage Vietnam’s development as a key cog in the supply chain for technological products, possibly including semiconductors. This would take place in the context of U.S. efforts to promote supply chain diversification and Secretary of Treasury Janet Yellen’s July 2023 comments in Hanoi about supporting “friend-shoring.” Depending on the details, this could be the most significant substantive outcome of the visit. More funding for workforce development would be fitting; the lack of hardware and software engineers has held back Vietnam’s development in this area.

We will continue to keep you updated on developments in the Indo-Pacific as they occur. If you have comments or questions, please contact BGA Senior Adviser Amb. Scot Marciel at smarciel@bowergroupasia.com.

Best regards,

BGA Research Team

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Senior Advisor

Scot brings more than 35 years of experience in diplomacy and public policy, much of it focused on Southeast Asia, to help BGA clients understand and operate effectively in the Indo-Pacific. As a former senior U.S. diplomat, he has worked closely with political leaders, senior officials and leading business executives. He has a deep understanding of the region and the policy dynamics affecting the business environment and has substantial experience addressing legal and regulatory obstacles to trade and investment. During his foreign service career, Scot served as U.S. ambassador to Myanmar from 2016-20, Indonesia from 2010-13 and as the first ... Read More