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Deals For The Dealmaker: Vietnam Signs Billion-Dollar Deals To Woo Trump (And His Navy)
Murray Jones, Features Writer
President Trump visited Hanoi on Sunday
HANOI - President Trump described Vietnam as ‘one of the greatest miracles of the world’ during his visit to Hanoi last weekend [November 11-12], as he sought to set out a new era for bilateral relations between the former adversaries.

While the business mogul turned Commander-in-Chief has a well-earned reputation for overblown claims, in this case, he has a point.

The Asian nation has been one of the fastest growing economies over the past 20 years, with an average 6.4 per cent annual rise in GDP since the turn of the century, and the poverty headcount in Vietnam falling from nearly 60 percent to 20.7 percent from 1993-2013, according to the World Bank.

The President of Vietnam, Trần Đại Quang, discussed trade deficits and security on Sunday
Despite his flattery, when Trump pulled the US out of the historic Trans-Pacific Partnership [TPP] in January, he delivered a huge blow to Vietnam – who stood to be one of the main beneficiaries of the agreement.

During his successful election campaign, his complaints of ‘unfair’ trading conditions led Trump to accuse many nations – including Vietnam – of destroying American businesses and stealing domestic jobs through subsidies and unequal trade barriers, often in spite of multilateral agreements; hence his decision to withdraw from TPP.

At the Asia-Pacific Economic Cooperation forum [APEC] in Da Nang on Friday [November 10], he reiterated this grievance.

“The United States will no longer turn a blind eye to violations, cheating or economic aggression. Those days are over,” he said, adding he would make a bilateral deal with any nation ‘that will abide by the principles of fair and reciprocal trade’.

This was in stark contrast to Chinese President Xi Jinping’s speech in which he called for increased economic integration via a Free Trade Area of the Asia-Pacific [FTAAP]. At the conference, the 11 remaining signatories of TPP also agreed to pursue a similar multilateral agreement.

Deficit reduction

Eager to retain the superpower’s backing in the territorial dispute over the South China Sea, Vietnam’s leadership have been quick to appease the President’s ‘America First’-inspired desire to narrow trade deficits.

In May Prime Minister Nguyen Xuan Phuc became the first Southeast Asian leader to visit Trump in the White House, thanks to a determined diplomatic effort in Washington, where Vietnam employs a lobbyist at $30,000 a month.

He signed deals worth up to $17billion for US companies in Vietnam, highlighting the nation’s desire to make an impression on Trump in a hurry.
This will help considerably to level out the continually growing disparity in trade between the two nations.

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According to the U.S. Department of Commerce last year, the United States imported $32billion worth of goods more from the communist country than they export – their sixth largest deficit. (This constitutes a rise of over 450 per cent over the past decade and is largely down to American consumption of Vietnamese electronics, clothing and furniture.)

And again on Sunday [November 12] deals worth over $2billion, for US firm Pratt and Whitney to supply engines to Vietnamese airlines, were agreed.

Trump also encouraged the purchase of American weapons since the US ‘make the best missiles in the world’ – something made possible by President Obama who ended a five decades long trade embargo on selling lethal weapons to Vietnam.

The motivation for trade appeasement moves beyond purely economic gain. Vietnam is the most vocal amongst a number of nations who are concerned with China’s territorial claims in the South China Sea, through which about $5trillion of trade passes through each year.

With analysts suggesting that the Trump’s anti-globalist stance is a huge opportunity for China to increase their influence as the region’s trading superpower, Vietnam were looking for the President to promise an enhanced military presence to provide a counterweight to their communist neighbours. Especially on the back of rising tensions this summer, when Vietnam drilled for oil and gas in an offshore block that Beijing disputes.

Their exploration was called off after diplomatic pressure from China and there is a fear within Vietnam that Xi Jinping’s consolidation of power domestically will embolden him to become more assertive internationally.

On this issue, Vietnam’s leadership were likely disappointed by Trump’s reassurance on Sunday. He boasted that he is a ‘very good mediator and a very good arbitrator’ before offering his services to President Tran Dai Quang in the dispute. There was no criticism of China’s claim to more than 90 per cent of the energy-rich waters.

However, Trump’s claim to be a neutral referee in this dispute is questionable. Last month the US carried out their fourth freedom of navigation operation [FONOP] in the South China Sea this year by sending a guided missile destroyer ship to challenge excessive maritime claims by the Chinese – a practice that began in 2015.

This ‘testing the waters’ operation was undoubtedly welcomed by Vietnam who now appears to be completely at ease with an American military presence near their shores. In October last year, two American warships stopped in Vietnam’s Cam Ranh Bay for the first time since the two nations normalised relations in 1995.

A strengthening military cooperation, combined with a fivefold increase in total bilateral trade in the past decade, from $9.7 billion to $52.2 billion, demonstrate the remarkable recovery in relations considering the nations’ history.

Old enemies, new friends

Of course, economic benefits have played their role in encouraging normalised relations but other factors appear to have helped the Vietnamese to not hold a grudge against recent invaders.

COOPERATION – Vietnamese Prime Minister Phuc and US Secretary of State Rex Tillerson meeting in Washington in May
The superpower’s bloody past in Vietnam has almost become irrelevant to the nations’ relationship, on both a state level and via the population. In fact, a study by Pew in June this year found that the US enjoys one of its highest approval ratings globally amongst the Vietnamese public, with 84 per cent holding a favourable opinion of their previous adversary. (Interestingly only in Russia and Vietnam did that number increase after Trump’s election).

Why? Firstly, the country seems to be determined to leave the war in the past; public celebrations of their victory are surprisingly tempered in the capital and discussion of those involved is notoriously limited. Rather than self-congratulation, it appears that a solemn determination to make the country a success has been the surviving attitude of the war’s devastation.

Then there is the generational gap in Vietnam. Amongst 18-29 year olds, a staggering 92 per cent view the US favourably, the highest of any nation surveyed. (Although for the 50-pluses, whose emotional proximity to the war is much greater, the number is still 65 per cent.)

Access to technology, particularly the pervasiveness of smartphones and social media, as well as the consistent glorification of western lifestyles in corporate marketing has left the vast majority of Vietnamese millennials enamoured with a nation whose actions half a century ago brought such devastation to their shores.

How this generation’s adulation of America will square with their lack of rights to free speech and democratic dissent remains to be seen.

Deals For The Dealmaker: Vietnam Signs Billion-Dollar Deals To Woo Trump (And His Navy), 14th November 2017, 13:26 PM