Indo-Pacific strategy heads long-term American matters

Consensus is being reached for trade restrictions to be removed in order to welcome new US investment in a variety of sectors, Photo: Shutterstock

Newly-appointed US Ambassador to Vietnam Marc Knapper on February 12 posted a video clip sharing his feelings in Vietnamese about the country and its people, and the relationship between the two nations.

“My family and I are delighted and honoured to return to Vietnam where we served 15 years ago,” he said on the short video posted on the US Embassy to Vietnam’s Facebook page. “At that time, I was deeply impressed by Vietnam and its wonderful people as well as the potential of our two countries’ relationship. The transformation of bilateral ties into a close friendship and comprehensive partnership has been remarkable.”

“I’m honoured that President Biden has given me the opportunity to return to Vietnam and continue the important work our countries are doing together, and to build upon the efforts of so many in both of our countries. The bonds between our two peoples are strong and growing,” Knapper added.

The day previously, the ambassador presented his credentials to Vietnamese State President Nguyen Xuan Phuc, officially starting his term in Vietnam. “I will make bigger efforts to beef up the US-Vietnam ties in many sectors, especially trade, investment, education, and defence and security,” he said.

Testifying before the Senate last July, Knapper said, “Right now, we have what we call a comprehensive partnership. We hope to raise it to a strategic partnership, and I will take steps to do that by strengthening even further our security relationship with Vietnam.”

Meanwhile, Deputy Minister of Foreign Affairs Nguyen Quoc Dung, who has more than 30 years’ experience in foreign affairs, last week flew to the US to undertake his new role as Vietnamese Ambassador to the US.

Dung is also expected to help create new strong momentum for elevating the existing comprehensive partnership between both nations to a new level.

New strategy

The White House earlier this month launched a hallmark Indo-Pacific Strategy, stating that the Biden-Harris administration has made historic strides to restore American leadership in the Indo-Pacific and adapt its role for the 21st century.

In the last year, the US has modernised its longstanding alliances, strengthened emerging partnerships, and forged innovative links among them to meet urgent challenges, from competition with China and climate change to the pandemic.

It has done so at a time when allies and partners around the world are increasingly enhancing their own engagement in the Indo-Pacific; and when there is broad, bipartisan agreement in the US Congress that the US must, too. This convergence in commitment to the region, across oceans and across political-party lines, reflects an undeniable reality: the Indo-Pacific is the most dynamic region in the world, and its future affects people everywhere.

That reality is the basis of the Indo-Pacific Strategy, which outlines President Biden’s vision to more firmly anchor the States in the Indo-Pacific and strengthen the region in the process. Its central focus is sustained and creative collaboration with allies, partners, and institutions, within the region and beyond it.

As part of the strategy, Vietnam will also play an important role, in addition to some other nations. The strategy stresses a plan to “strengthen relationships with leading regional partners, including India, Indonesia, Malaysia, Mongolia, New Zealand, Singapore, Taiwan, Vietnam, and the Pacific Islands.” Besides that, the US will also “contribute to an empowered and unified ASEAN,” in which Vietnam is an important member state.

According to Vietnam’s Ministry of Foreign Affairs, in early 2022, Vietnam and the US will organise a trade ministerial-level meeting to deal with obstacles for boosting trade and investment ties between the two sides.

“Both sides will concentrate on expanding investment and trade ties as one of the biggest priorities in their bilateral relationship,” Le Cong Tien, vice general director of the Ministry of Foreign Affairs’ Department of Americas, told VIR. “After the US launches its Indo-Pacific Economic Framework and after the two countries reach consensus in removing such obstructions in trade and investment, a new framework is expected to be formulated for increasing cooperation.”

During her visit to Vietnam last August, US Vice President Harris reaffirmed the US commitment to a strong, prosperous, and independent Vietnam, as well as a free, open, healthy, and resilient Indo-Pacific region.

“I would also ask that we consider doing what we can to upgrade our relationship as a strategic partnership. This will send a positive message to our governments, and our people, and the region as we deepen our relationship,” she said.

Amplifying investment and trade

Twenty-six years ago, the Vietnam-US economic relationship was nearly non-existent. Now, Vietnam is, however, one of the US’ top 10 trading partners in the world, and its economy is critical to the supply chains that the US relies on.

According to the General Department of Vietnam Customs, last year, the US was Vietnam’s largest export market, with an estimated turnover of $96.29 billion, up 24.9 per cent on-year. The US was also Vietnam’s sixth-largest import market, with an estimated turnover of $15.27 billion, up 11.4 per cent on-year.

In the first month of 2022, Vietnam’s total export turnover from the US reached $9 billion, up 9.7 per cent on-year.

The Ministry of Planning and Investment reported that, accumulatively as of January 20, total US registered investment capital in Vietnam hit over $10.3 billion for 1,147 valid projects, making the US the 11th biggest foreign investor in Vietnam. In January alone, the US became the seventh-biggest foreign investor in the Southeast Asian market, with total registered capital of $26.5 million.

John Fering, regional managing director of Cargill Animal Nutrition Southeast Asia, told VIR, “Our investment in Vietnam will continue with work on our $28 million speciality nutrition plant in the southern province of Dong Nai in full swing this year.”

Currently, Cargill runs 11 animal nutrition plants and a grain and oilseed warehouse, and two aqua technical application centres in Vietnam. The project in Dong Nai will raise Cargill’s total investment in Vietnam to $160 million.

Many other US groups are also performing well in Vietnam, such as AES, GE, Coca-Cola, and Intel, with billions of US dollars already invested.

A few months ago PetroVietnam Gas Joint Stock Corporation and AES established a joint venture – Son My LNG Port Warehouse Co., Ltd. The establishment aims to invest in the construction of the Son My LNG port warehouse in the central province of Binh Thuan. The project has total expected investment capital of $1.31 billion with an annual capacity of 3.6 million tonnes. The facility is expected to become operational in 2025.

Moreover, many other US groups are also exploring opportunities in Vietnam, such as CFM International, AviaWorld LCC, Cantor Fitzgerald, Weidner Asset Management Steelman Partners, DeLong, and Valero.

“We have deepened our economic ties as Vietnam’s second-largest trading partner and its top export market worldwide, and our support for one another is mutually reinforcing: a vibrant Vietnamese economy is critical to the supply chains Americans depend on,” said a White House statement.

US Ambassador Knapper also stated, “Even the challenges of a global pandemic have only brought our two nations closer as we supported each other in times of need. We are working together to responsibly address the legacies of war, expand bilateral trade, maintain regional peace and stability, and protect our environment and its rich resources. I’m thrilled to be here and work with our Vietnamese friends in support of a strong, prosperous, and independent Vietnam.”