More than two decades ago, when then US President Bill Clinton announced the normalization of US diplomatic relations with Vietnam, the two countries had nearly zero trade and very limited connection.
Vietnam has just started its economic reform at that time, opening itself to foreign investments and support to help it overcome the aftermath of destructive war. The US set up its embassy in Hanoi, which then followed official visits from top American diplomats and signing of accords that further recognized the two nations’ renewed friendship.
From the appointment of Pete Peterson, a Vietnam War veteran, as the first US Ambassador to Vietnam in 1997, US and Vietnam’s relationship has grown and expanded — an achievement that would have been unimaginable 25 years ago.
Today, the two countries share over $90 billion in bilateral trade. The US is Vietnam’s largest importer, while Vietnam remains America’s fastest-growing market in Southeast Asia. Before COVID-19 forced countries to shut their borders, nearly 700,000 Americans traveled to Vietnam for leisure and business, and over 30,000 young Vietnamese flew to different American cities to pursue studies.
“We are celebrating a quarter century of diplomatic relations is proof that we are not doomed to repeat the mistakes of the past. We can overcome resentment, distrust and bitterness, and replace them with trust, respect and friendship,” shared Ambassador Kritenbrink in an interview with Vietcetera in February.
“The United States and Vietnam have proven that former adversaries can become trusted partners. As much as the achievement matters to us here, it is also a profound lesson to the rest of the world.”
The ambassador, who is ending his tenure this year and is set to take on a bigger role as Assistant Secretary of State for East Asian and Pacific Affairs, believes Vietnam is an integral part of his country’s Indo-Pacific strategy.
Like-minded partners
At a press conference before leaving Vietnam, he said the US vows to strengthen its relationship with its partners, friends and allies in the region, with Washington wanting to work with “like-minded partners and friends like Vietnam” to promote policies that are beneficial to all the countries.
“The US and its partners will uphold a rules-based international order and support international law so as to avoid conflict,” Kritenbrink said, as reported by VnExpress.
“The US also believes in the centrality of ASEAN and in Vietnam as a capable, successful country that naturally plays a leadership role in this region,” he added. The US considers Vietnam to be one of its most important partners in the world.
With visions and interests that are identical and aligned, US and Vietnam are working together in pushing for regional security and stability, as tension flares again in the disputed South China Sea. Washington, as Kritenbrink reiterated, will always stand by its allies in support of a rules-based international order and will continue to oppose actions of other countries that are intended to provoke and threaten others.
Regarding bilateral relations, Kritenbrink told Vietcetera that it is the US’ goal to support the development of a strong, prosperous and independent Vietnam.
“In other words, it is in America’s national interest to see Vietnam succeed. We believe that we are more secure and prosperous when we work together with successful, strong and like-minded partners such as Vietnam to advance our shared interests to create a free and open region in which we all want to live.”
Trade tensions
Washington has for several times voiced its concern over Vietnam's exchange range management.
The US Treasury designated Vietnam last year as a currency manipulator, saying it was not using its exchange rates to gain unfair trade advantages, an unprecedented move that could have created friction between two important allies. The US, however, refrained from hitting the Southeast Asian country with punitive tariffs.
Currency manipulation is a label associated with countries who consistently intervene in currency markets in order to artificially devalue their currencies against major currencies such as the US dollar, as explained by Vietnam Briefing. A low exchange rate for Vietnamese dong means that Vietnamese companies that sell goods to the US earn more dong from the dollars they received from US customers, while American businesses would pay more to exchange the dong.
Vietnamese officials claimed that such a label was misleading and the country’s exchange rate policy was not targeted to create an unfair competitive advantage for Vietnamese exports. Vietnam asked the US to take “a more objective assessment of the reality in Vietnam”. The State Bank of Vietnam also announced that it would work with US authorities to ensure a harmonious and fair resolution to the dispute.
“Vietnam’s foreign exchange rate policy has for years been managed in a way to contain inflation, ensure macro stability and not to create unfair trade advantage,” the central bank said in a statement.
Despite trade tensions, Kritenbrink said that economic and trade relations between the two countries will remain a central focus of the US.