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Vietnam Today

Better understanding

Released at: 22:54, 29/04/2015

Better understanding

The US-Vietnam relationship will be one of the most strategic and dynamic partnerships in Asia over the next two decades.

Mr. Ernest Bower, Senior Adviser at the Center for Strategic and International Study (CSIS)

When looking back on 20 years of Vietnam-US bilateral relations, the most important achievement has been that both countries have indeed redefined their relationship based on their current national security, economic, and people-to-people ties. The relationship is no longer defined by the war. That is an incredible benchmark.

Next, I think both countries deserve credit for normalizing economic relations and making that a foundation on which to build security and political ties. The bilateral trade agreement, Vietnam’s membership of the WTO, and both countries joining Trans-Pacific Partnership (TPP) negotiations are key in this area. Now both are ready to build upon a solid foundation of trust and expand ties in areas such as security, military cooperation, and intelligence coordination.

Some may ask what is the top “win-win” thing between the two countries over the past 20 years. I believe the most important “win-win” is the mutual recognition, in Hanoi and Washington, that the other country is strategically vital to the national security and economic well-being of the other. This understanding will set the scene for President Obama to visit Vietnam this year and for Washington to welcome a visit by Party General Secretary Nguyen Phu Trong.

From my own perspective, Vietnam’s leadership has taken a practical approach to developing the country’s economy and developed a very strategic view of regional architecture, such as the need to strengthen ASEAN, build credibility in the East Asia Summit, and promote economic cooperation as the foundation for levels of integration in the IndoPacific that will promote long-term stability, peace and prosperity.

However, some have said that there is still a lack of “honesty and straight-forwardness” - probably from one side, Vietnam or the US - in a number of business deals or diplomatic and political negotiations, despite the non-stop growth in business and investment links between Vietnamese and US enterprises and the most-recent “Comprehensive Partnership Agreement” signed in July 2014. I don’t agree that the relationship lacks “honesty and straight-forwardness”. That is not the case. In fact, I think both countries have been very honest and direct in their private discussions and, as a result, we understand one another better today than ever before. We still have much to learn and more relationships to build, but I see real commitment on both sides.

“I think trust is something you build. It doesn’t come easily or quickly. It is earned, not granted or given. I see good progress in the building of trust between American and Vietnamese executives and officials. We are moving in the right direction. This isn’t easy work, and more effort is needed on both sides. Effort and determination. I see that level of commitment on both sides.”

In terms of business links, US and Vietnamese enterprises still face major challenges in partnering due to their relative size and levels of experience. However, good partnerships are based on mutual need and each partner bringing value to the table. That is certainly the foundation for many strong joint ventures and it will work for many more in the future. Vietnamese companies understand customers and how to work in Vietnam. US companies can bring technology, new products, links to the US and other global markets, and training to the partnership.

US companies want to work in Vietnam. They love the work ethic of their Vietnamese colleagues, the strong potential for growth and the dynamism of the market. However, they have faced problems with transparency in obtaining approvals and in the regulatory process, and in some cases corruption has been an issue. In these cases, enterprises from countries that don’t have laws against corrupt practices tend to be willing to engage when US companies can’t. That isn’t good for the US or for Vietnam.

For Vietnamese firms, I would advise those who are thinking about partnerships with US companies to think carefully about the advantages and disadvantages of working with a US partner. US companies bring a lot to the table: they like to invest long term, they bring technology and training both for employees as well as communities, and they also bring links to the US and other global markets. All of that is useful. However, they are sometimes harder to work with than companies from other countries because they are bound by very strict US laws that prohibit then from participating in any level of corruption or pay-offs, and they spend a lot of time on getting governance right. These should be seen as advantages by Vietnamese companies with a long-term vision, but it can make it harder to partner with US companies in the near term. 

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