Thayer Consultancy Background Brief:

ABN # 65 648 097 123

Pompeo Visit to Hanoi Post-
Mortem
Carlyle A. Thayer
October 31, 2020

We request your assessment of U.S. Secretary of State Mike Pompeo's just concluded
visit to Vietnam.
Q1 – What is the significance of the visit?
ANSWER: Secretary of State Mike Pompeo’s unexpected visit to Hanoi must be viewed
as a significant development because it came at a time when the coronavirus has
severely impacted high-level face-to-face meetings. While Vietnam and the United
States virtually celebrated the twenty-fifth anniversary of diplomatic relations in July,
Pompeo’s visit provided the pretext to underscore this milestone.
The fact that Secretary Pompeo was able to meet Prime Minister Nguyen Xuan Phuc
and Deputy Prime Minister and Foreign Minister Pham Binh Minh at short notice is a
sign that the bilateral relationship is valued by both sides. Secretary Pompeo’s
meeting with the Minister of Public Security To Lam was unprecedented.
During Pompeo’s short visit both sides were able to reaffirm their commitment to and
express appreciation for the contributions their counterpart was making to advance
the U.S.-Vietnam comprehensive partnership.
Apparently, the shortness of the visit did not allow time for a joint press conference
or the release of a joint statement. However, Vietnam’s Ministry of Foreign Affairs and
the U.S. Department of States issued separate statements. According to a statement
by Vietnam’s Ministry of Foreign Affairs the two sides gave priority to the early
resumption of exchanges of delegations, including high-level exchanges; humanitarian
cooperation; addressing war legacy issues; building trust; and strengthening bilateral
trade and investment on the basis of mutual benefit.
Three important developments are worth noting. First, both sides refrained from
mentioning China in their public accounts of the bilateral meetings. It is clear from
references to the South China Sea that China was discussed. But the emphasis was on
promoting ASEAN centrality not a coalition of like-minded states working in
partnership with the U.S.
Second, bilateral security cooperation in the South China Sea and Lower Mekong is a
new development that will build on current engagement between the two countries’
security agencies.
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Third, both sides agreed to address thorny issues in their bilateral economic and
commercial relations – Vietnam’s trade surplus and U.S. allegations of currency
manipulation. On 26 October, Prime Minister Nguyen Xuan Phuc met with Adam
Boehler, the head of the U.S. International Development Corporation, and told him,
“Vietnam is not using exchange rate policy to create a competitive advantage in
international trade.” Prime Minister Phuc asked Boehler to convey to President Trump
and the Office of the United States Trade Representative that the United States should
“have a more objective assessment of reality in Vietnam.” with respect to Vietnam’s
trade surplus with the U.S.
Foreign Minister Pham Binh Minh called for the two sides to effectively implement the
Action Plan aimed at a sustainable balance of trade and reaffirmed that Vietnam was
comitted to creating a favourable environment for American businesses to operate
successfully in Vietnam over the long haul.
The day before Pompeo arrived in Hanoi, the Indo-Pacific Business Forum provided
the venue for American and Vietnamese companies to reach seven agreements or
Memorandum of Understandings (MOU): (1) a $3 billion gas-fired power plant in Bac
Lieu province, (2) $1.4 billion LNG storage facility in Binh Thuan province; (3) MOU to
develop a gas-fired plant in Long An province; (4) MOU to develop a LNG gas power
project in Hai Phong city, (5) technology transfer to modernize Vietnam’s power grid;
(6) supply of ethanol for fuel; and (7) $500 million sale of pork to Vietnam over a three-
year period.
The agreements on the export of billions of dollars of LNG a year from the U.S. to
Vietnam is a major development that will impact on the balance of trade.
Q2 - What are implications for Vietnam-U.S. relations after the presidential election?
ANSWER: If Donald Trump is re-elected, Vietnam’s trade surplus will continue to
bedevil bilateral relations. Under Robert Lighthizer, the USTR can be expected to
pressure Vietnam on a number of issues and impose tariffs if its investigations into
alleged currency manipulation and illegal export of timber are confirmed. Vietnam,
for its part, will continue to lobby for the United States to restore its status as a
developing country; lift its tariffs on catfish, shrimp and aluminium and steel; and
grant Vietnam market economy status.
The Trump Administration will continue to assist Vietnam to combat the coronavirus
and to enhance its maritime security capacity in the South China Sea including support
to combat illegal Chinese fishing.
If Biden is elected president, there will be continuity in bilateral relations as the
agreement on comprehensive partnership was drawn up under President Obama.
Trade issues will remain important but the Biden Administration is likely to be less
aggressive towards Vietnam than the Trump Administration. U.S. concern over the
promotion and protection of human rights of human rights will rise in salience,
particularly if the Democrats win both houses of Congress.

Suggested citation: Carlyle A. Thayer, “Pompeo Visit to Hanoi Post-Mortem,” Thayer

Consultancy Background Brief, October 31, 2020. All background briefs are posted on
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Thayer Consultancy provides political analysis of current regional security issues and
other research support to selected clients. Thayer Consultancy was officially
registered as a small business in Australia in 2002.