Thayer Consultancy Background Briefing:

ABN # 65 648 097 123

Vietnam-U.S. Defense Relations:
Historic Turning Point?
Carlyle A. Thayer
June 4, 2012

[client name deleted]

1. Could you provide an assessment on the extent to which Defense Secretary
Panetta’s trip to Hanoi signifies that Vietnam and the US are turning a page in history
to meet a common threat?
ANSWER: Vietnam has responded to China's assertion that the United States is an
outside power in regional security by inviting Secretary Panetta to Cam Ranh Bay.
Both sides will deny, but nobody will believe, that Panetta's visit is not aimed at
sending a strategic message to Beijing that Chinese assertiveness will be resisted.
2. Also, given that the visit was kept quiet until he actually went there, to what
extent does that reveal U.S. and Vietnamese sensitivities over how China might
react? Finally, does it change the balance of power in the region at all?
ANSWER: Vietnam's 2009 Defence White Paper set of what I termed a policy of
"three no's" - no foreign alliances, no foreign bases, and no bilateral relations
directed against a third party. Vietnam is willing to skirt this policy by inviting all
countries to use its commercial facilities at Cam Ranh Bay. The United States was the
first to oblige by sending three US Military Sea Lift Command vessels there for minor
repairs. Vietnam is acting subtly so as not to provoke China. But the message
Vietnam wants to send is clear: the United States is a legitimate actor in maritime
security and it presence is welcome.
China is left to ponder whether an increase in pressure on Vietnam will lead to a
change in policy.

Suggested citation: Carlyle A. Thayer, “Vietnam-U.S. Defense Relations: Historic

Turning Point?,” Thayer Consultancy Background Brief, June 4, 2012.
 Thayer Consultancy Background Briefing:
ABN # 65 648 097 123
Vietnam Requests U.S. Lifting of
Arms Sale Embargo
Carlyle A. Thayer
June 7, 2012

[client name deleted]

Vietnam is asking the US to lift the lethal weapon ban to modernize the military.
Could you tell us more about the arms embargo and what kind of weapons the US
prohibit selling to Vietnam.
Do you think the US will consider selling lethal weapons to Vietnam? What are the
hurdles?
United States prohibitions on arms sales to Vietnam (and many other countries as
well) fall under the International Traffic in Arms Regulations (ITAR) issued by the
Department of State. These regulations were amended in 2007 under the Bush
Administration. The amendments permit the United States to consider “licenses,
other approvals, exports or imports of non-lethal defense articles and defense
services” to Vietnam on a case by case basis.
The U.S. retains the following restrictions: it will deny “licenses, other approvals,
exports or imports of lethal defense articles and services destined for Vietnam.” The
defense articles are included on the United States Munitions List.
The 2007 amendments to ITAR further specified that U.S. restrictions also cover the
components of lethal weapons and non-lethal crowd control equipment and night
vision devises to be used by any Vietnamese agency with responsibility for ground
security.
In other words, the U.S. will not sell any arms, offensive or defensive, or their parts
that can be used to kill. This would include spare parts for much of the “war booty”
Vietnam acquired when the Vietnam War ended. This would include spare parts for
M113 Armored Personnel Carriers.
ITAR was established under the Arms Export Control Act enacted by the U.S.
Congress and Executive Order 11958 issued by the President.
The U.S. is not considering selling lethal weapons to Vietnam. Former Ambassador
Michael Michalak made this clear in an interview on Vietnamese television to mark
the 15th anniversary of diplomatic relations. Secretary of State Hillary Clinton also
stated U.S. policy when she visited Vietnam in 2010. Clinton stated she wanted to
that U.S. relations with Vietnam to the next level, but human rights and religious
freedom were the major obstacles.
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Recently when Senators John McCain and Joseph Lieberman visited Vietnam they
claim they were presented a “wish list” of arms that Vietnam would like to procure.
They too indicated this would not be possible until the human rights situation
improved. This means that even if the Obama Administration wanted to alter U.S.
policy it would face opposition in the Senate making it highly unlikely any change of
policy would be approved.
It is up to Vietnam to identify what items of military equipment it needs that are not
covered by ITAR and seek a license on a case by case basis. Vietnam could test the
waters by applying for defensive systems such as ground radar and naval
surveillance aircraft.

Suggested citation: Carlyle A. Thayer, “Vietnam Requests U.S. Lifting of Arms Sale
Embargo,” Thayer Consultancy Background Brief, June 7, 2012.
 Thayer Consultancy Background Briefing:
ABN # 65 648 097 123
Vietnam-United States Relations:
What Future Defence Ties?
Carlyle A. Thayer
July 1, 2012

[client name deleted]

Q1. What has been happened to make the relationship between USA and Vietnam
grow so quickly over the past decade? (Any particular event or just slow-and-
steady?)
ANSWER: The relationship has been steadily evolving since 2003. But tensions in the
South China Sea have prompted Vietnam to enter into a strategic dialogue with the
US a year prior to China. And then Vietnam upgraded its strategic dialogue with the
US to deputy minister level prior to doing so with China. In the past it was always
China first. Vietnam is motivated to keep the US engaged in Southeast Asia, and the
South China Sea in particular as a balance to China.
The bilateral mil-to-mil relationship has been more form and less substance. Vietnam
and the US conduct naval exchange activities and do not conduct military exercises.
These activities are highly restricted and take place in the port of Da Nang. Vietnam
and the US signed their first military agreement. It was a Statement of Intent to
cooperate in military medicine. They also signed a MOU with five key areas. This did
not signify anything really new but was a reiteration of what was already going on.
Vietnam still does not permit uniformed US military personnel to operate on land
(except for the Defense Attaché Office). When US naval officers came ashore in Da
Nang during the last naval activity they entered the hotel where Defense Minister
was staying. He promptly called Hanoi to find out who authorized this and ordered
his staff to see to it that the US personnel changed back in civies. The Americans
were told disingenuously this was for their security as some Vietnamese still
harbored enmity from the Vietnam War.
Q2. How will Vietnam's struggling economy affect future trade with the U.S.?
ANSWER: The United States is Vietnam's largest market. Vietnam has a trade surplus
with the US running nearly US $11 billion. Vietnam has a trade deficit with China
over US $13 billion.
Q3. How important is military-to-military relations for the two nations? (And how
important is it for the U.S. having Navy warships in Cam Ranh Bay?)
ANSWER: Mil-to-mil relations are important to the US because the US Pacific
Command pursues a theater engagement plan designed to encourage Vietnam to
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cooperate more. Vietnam was identified in the current Quadrennial Defense Review
as a potential strategic partner after Indonesia and Malaysia.
The engagement plan is all the more important because of the US "rebalancing" to
the Asia Pacific.
Vietnam wants the US to remove the restrictions contained in the ITAR (International
Trafficking in Arms Regulations). So far it cannot acquire lethal equipment and it is
limited to certain types of non-lethal equipment and military services on a case by
case basis.
The US policy of rebalancing puts a premium on access and rotational deployments.
None of this appears likely with Vietnam. Cam Ranh Bay is ideal for the US as it sits
opposite the Spratly Islands and is an excellent deep water port.
Q4. Was the U.S. the first nation to take up the offer of Cam Ranh Bay to navies of
the world?
ANSWER: Vietnam has not permitted any country, including the US, to dock warships
in Cam Ranh Bay. Vietnam has opened the commercial facilities only. The US was the
first to avail itself of this and sent US Military Sealift Command ships for voyage
repairs. The cost of the repairs is minor, just under a half million US dollars for each
repair. The US ships are logistics ships largely crewed by civilians.
Q5. Where is this relationship going for the two countries?
ANSWER: When Secretary of State Hillary Clinton visited in 2010 she wanted to take
the relationship to the next level. She proposed a strategic partnership. Negotiations
are "up in the air" I was told by senior Vietnamese official. One of the major snags is
Vietnam's human rights record. Vietnam has been put on record by the US
Ambassador, key US Senators (McCain and Lieberman), and Secretary Clinton herself
that there can be no progress on the bilateral side unless human rights are
addressed. Since these warnings the situation has gotten worse with Vietnam's
crackdown on bloggers.
But US-Vietnam bilateral relations are not entirely hostage to the human rights issue.
The US will continue to provide major assistance in addressing public health issues
and mitigation of climate change.

Suggested citation: Carlyle A. Thayer, “Vietnam-United States Relations: What Future

Defence Ties?,” Thayer Consultancy Background Brief, July 1, 2012.