U.S. President Joe Biden, center left, attends a state luncheon hosted by Vietnam’s President Vo Van Thuong, center right, at the Presidential Palace in Hanoi, Vietnam, on September 11, 2023.
| Photo Credit: AP

The United States and Vietnam warned on Monday against the “threat or use of force” in the disputed South China Sea, days after the latest clash involving Chinese vessels.

U.S. President Joe Biden and Vietnam’s Communist Party chief Nguyen Phu Trong said the competing claims on the strategic waterway must be settled under international norms.

Beijing claims almost the entire sea, through which trillions of dollars in trade passes annually, and has ignored an international court ruling that its assertion has no legal basis.

“The leaders underscored their unwavering support for the peaceful resolution of disputes in accordance with international law, without the threat or use of force,” Mr. Biden and Mr. Trong said in a joint statement.

They also called for “freedom of navigation and overflight and unimpeded lawful commerce in the South China Sea”.

The statement came a day after Mr. Biden and Mr. Trong struck a deal to deepen cooperation, widely seen as a way to counter China’s growing assertiveness in the region.

Washington is at loggerheads with Beijing on a range of issues including trade, security, human rights and climate change and is looking to boost its network of allies to counter Chinese influence.

Vietnam, which fought a war with China between 1979 and 1988, is wary of its giant northern neighbour, and is one of a handful of countries with claims on the many islets and outcrops that dot the South China Sea.

Last week the Philippines accused Chinese Coast Guard and “militia” boats of harassing two of its own coast guard vessels as they took supplies to Filipino troops on the Second Thomas Shoal.

The Philippine Navy deliberately grounded an old ship on the shoal in 1999 to check China’s advance in the waters.

China deploys hundreds of vessels to patrol the South China Sea and swarm reefs.

The Philippines, a longtime U.S. ally, has outposts on nine reefs and islands in the Spratly Islands — which Vietnam also claims along with the Paracel Islands.

Manila says Chinese coast guard and navy ships routinely block or shadow Philippine boats in the contested waters.

Tensions between Manila and Beijing flared last month when China Coast Guard vessels used water cannon against a Philippine resupply mission to the reef, preventing one of the boats from delivering its cargo.

U.S. President Joe Biden opened a brief visit to Vietnam on Sunday by telling the country’s leadership that the two nations have a chance to shape the Indo-Pacific for decades to come.

Mr. Biden said he hoped progress could be made on climate, the economy and other issues during his 24-hour visit.

“Vietnam and the U.S. are critical partners at what I would argue is a very critical time,” Mr. Biden told Nguyễn Phú Trọng, general secretary of the Communist Party of Vietnam, during the public portion of their meeting at party headquarters.

Mr. Trọng agreed that their meeting presented an “excellent opportunity“ to expand bilateral ties. He thanked Mr. Biden for inviting him to visit Washington soon.

Vietnam is elevating its relationship with the U.S. to the status of being a comprehensive strategic partner, which one of Biden’s top national security advisers said represents Vietnam’s highest tier of international partnership.

Other countries that Vietnam has extended the designation to include China and Russia. Elevating the U.S. to the same status suggests that Vietnam wants to hedge its friendships as U.S. and European companies look for alternatives to Chinese factories.

Mr. Biden, who arrived in Hanoi on Sunday afternoon, said last month at a fundraiser in Salt Lake City that Vietnam doesn’t want a defense alliance with the U.S., “but they want relationships because they want China to know that they’re not alone” and can choose its own partners. The president decided to tack a visit to Vietnam on to his trip to India for the Group of 20 summit that wrapped up Sunday.

With China’s economic slowdown and President Xi Jinping’s consolidation of political power, Mr. Biden sees an opportunity to bring more nations — including Vietnam and Cambodia — into America’s orbit.

“We find ourselves in a situation where all of these changes around the world are taking place,” Mr. Biden explained last month about Vietnam. “We have an opportunity, if we’re smart, to change the dynamic.”

Mr. Biden was welcomed with a pomp-filled ceremony outside the mustard-colored Presidential Palace. Scores of schoolchildren lined the steps waving small U.S. and Vietnam flags and Mr. Biden watched from an elevated review stand as high-stepping members of the military marched past. The president waved to the children before he got into his limousine to go to Communist Party headquarters to meet with Trong.

The president and Trong expressed mutual happiness over seeing each other again after last meeting some eight years ago in Washington, said Mr. Biden, who was vice president at the time.

Trong sought to flatter Mr. Biden, who faces persistent questions at home about being 80 years old and running for reelection next year.

“You have nary aged a day, and I would say you look even better than before,” Trong said. “I would say every feature of you Mr. President is complementing your image.” Mr. Biden chuckled in response.

Earlier Sunday, Jon Finer, Mr. Biden’s chief deputy national security adviser, said the elevated status represents Vietnam’s highest tier of international partnership.

“It’s important to make clear that this is more than words,” Finer told reporters aboard Mr. Biden’s flight to Hanoi. “In a system like Vietnam, it’s a signal to their entire government, their entire bureaucracy about the depth and cooperation and alignment with another country that is possible.”

Finer noted a five-decade arc in U.S.-Vietnam relations, from conflict during the Vietnam War to normalization and Vietnam’s status as a top trading partner that also shares Washington’s concerns over security in the South China Sea.

“We will be deepening that relationship through this visit,” he added.

Finer also addressed reports that Vietnam was pursuing a deal to buy weapons from Russia, even as it sought deeper ties to the United States. Finer acknowledged Vietnam’s lengthy military relationship with Russia and said the U.S. continues to work with Vietnam and other countries with similar ties to Russia to try to limit their interactions with a nation the U.S. accuses of committing war crimes and violating international law with its aggression in Ukraine.

U.S. trade with Vietnam has already accelerated since 2019. But there are limits to how much further it can progress without improvements to the country’s infrastructure, its workers’ skills and its governance. Nor has increased trade automatically put the Vietnamese economy on an upward trajectory.

Commerce Secretary Gina Raimondo said that the CEOs she talks with rank Vietnam highly as a place to diversify supply chains that before the pandemic had been overly dependent on China. Raimondo has been trying to broaden those supply chains through the Indo-Pacific Economic Framework, an initiative Mr. Biden launched last year.

“Whether it’s Vietnam or Malaysia, Indonesia, India, companies are really taking a hard look at those countries as places to do more business,” Raimondo said. “It is also true that they need to improve their workforce, housing, infrastructure and, I’d say, transparency in government operations.”

Vietnam’s economic growth slipped during the first three months of 2023. Its exporters faced higher costs and weaker demand as high inflation worldwide has hurt the market for consumer goods.

Still, U.S. imports of Vietnamese goods have nearly doubled since 2019 to $127 billion annually, according to the Census Bureau. It is unlikely that Vietnam, with its population of 100 million, can match the scale of Chinese manufacturing. In 2022, China, with 1.4 billion people, exported four times as many goods to the U.S. as did Vietnam.

There is also evidence that China is still central to the economies of many countries in the Indo-Pacific. A new analysis from the Peterson Institute of International Economics found that countries in IPEF received on average more than 30% of their imports from China and sent nearly 20% of their exports to China. This dependence has increased sharply since 2010.

White House national security adviser Jake Sullivan saw an opening to broaden the U.S. relationship with Vietnam when one of its top officials, Lê Hoài Trung, visited Washington on June 29.

After talking with Trung, Sullivan walked back to his office and decided after consulting with his team to issue a letter to the Vietnamese government proposing that the two countries take their trade and diplomatic relations to the highest possible level, according to an administration official who insisted on anonymity to discuss the details.

Sullivan picked the issue back up on July 13 while traveling with Mr. Biden in Helsinki, speaking by phone with Trọng, the general secretary of the Communist Party of Vietnam.

At a fundraiser at a barn in Maine a few weeks later, Mr. Biden went public with the deal.

“I’ve gotten a call from the head of Vietnam, desperately wants to meet me when I go to the G-20,” Mr. Biden said. “He wants to elevate us to a major partner, along with Russia and China. What do you think that’s about?”

Hanoi/Washington:

U.S. President Joe Biden on Sunday secured deals with Vietnam on semiconductors and minerals as the strategic Southeast Asian nation lifted Washington to Hanoi’s highest diplomatic status alongside China and Russia.

The U.S. has been pushing for the upgrade for months as it sees the manufacturing dynamo as a key country in its strategy to secure global supply chains from China-related risks.

A half-century after a lengthy and brutal Cold War-era conflict, Biden arrived in Hanoi to a ceremony organised by the ruling Communist Party that included school children waving American flags and honour guards carrying bayoneted rifles.

Biden noted the strides that had been taken toward improved ties.

“We can trace a 50-year arc of progress between our nations, from conflict to normalization, to this new elevated status,” he said.

The partnership with Vietnam is part of the Biden administration’s push “to demonstrate to our our Indo-Pacific partners and to the world, the United States is a Pacific nation and we’re not going anywhere,” Biden told reporters after the meeting in Hanoi.

Vietnam is navigating frosty relations between Washington and Beijing as the tech and textile exporter seeks its own foothold in the international competition to be a low-cost manufacturing hub.

Top Chinese officials, possibly including President Xi Jinping, are expected to visit Vietnam in the coming days or weeks, officials and diplomats said, as Hanoi seeks to maintain good relations with all super powers.

Biden also said in Hanoi he had talked with Xi’s deputy at the G20, and that the two talked about stability.

Communist Party General Secretary Nguyen Phu Trong, 79, remarked on the 80-year-old U.S. president’s appearance inside party headquarters, saying “You have nary aged a day and I would say you look even better than before.”

RUSSIAN ARMS TALKS

Vietnam’s longstanding relationship with Russia faces tests over the war in Ukraine, including talks with Moscow over a new arms supply deal that could trigger U.S. sanctions.

Reuters has seen documents describing talks for a credit facility that Russia would extend to Vietnam to buy heavy weaponry, including anti-ship missiles, antisubmarine aircraft and helicopters, antiaircraft missile systems and fighter jets.

One of them, a letter sent in May by Vietnam’s Prime Minister Pham Minh Chinh to the Russian government, showed interest in the possible new deal.

A Vietnamese military officer confirmed the authenticity of the letter and the talks for a new $8 billion credit facility to buy heavy weaponry.

A spokesperson for Vietnam’s foreign ministry did not respond to multiple requests for comment on the documents, which show Moscow pushing for months for a loan deal that would bypass Western sanctions on Moscow.

Hanoi is in similar talks with multiple arms suppliers, including the United States. In recent weeks, Vietnam has engaged in several high-level defence meetings with top Russian officials.

The U.S.- Vietnam upgrade will include a security dimension, Jon Finer, the U.S. principal deputy national security adviser, told reporters on Sunday, while on the plane with Biden to Vietnam from a Group of 20 summit in India.

He said he had no arms deals to announce at this stage but stressed that the U.S. and its partners could offer Vietnam help to diversify away from Russian military supplies, an offer which he said Vietnam was receptive to.

That would help Vietnam reduce military reliance on Moscow, “a relationship we think they are increasingly uncomfortable with,” Finer said.

CHIPS, RARE EARTHS

Biden’s visit comes as bilateral trade and investment ties are growing and a long-simmering territorial dispute between Vietnam and China heats up in the South China Sea.

Vietnam Airlines is expected to sign an initial agreement to buy about 50 Boeing (BA.N) 737 Max jets in a deal valued at $10 billion, timed to the trip.

Highlighting Vietnam’s growing importance as a “friendshoring” destination for U.S. technology companies, executives from Google, Intel, Amkor, Marvell, GlobalFoundries and Boeing are expected to meet on Monday with Vietnamese tech executives and Secretary of State Antony Blinken in Hanoi.

Still, semiconductors are the centrepiece of an action plan adopted during Biden’s visit, U.S. officials said.

Besides possible announcements by U.S. corporations, it is unclear what else the the partnership could mean. The US government has $100 million a year for five years available under the CHIPS Act to support semiconductor supply chains globally. A large part of it could go to Vietnam, officials said.

More support to train skilled workers is also part of the deal, as Vietnam faces a major shortage of engineers in the chips sector.

Another key issue is strengthening supply chains of critical minerals, especially rare earths, of which Vietnam has the world’s largest deposits after China, according to U.S. estimates, officials said.

Two people familiar with the plans said an agreement on rare earths was expected during Biden’s visit, which ends on Monday when he flies back to America.

Details, however, are scant. Past attempts by U.S. companies to partner with Vietnamese rare earth firms have not succeeded, according to a person involved in one recent plan.

Human rights remain a controversial issue, with U.S. officials regularly criticising Hanoi for jailing activists and limiting freedom of expression. Vietnam may show goodwill, with diplomats suggesting activists could be freed.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)