May 26, 2016 | 09:30 GMT

8 mins read

The U.S. Opens Its Arms to Vietnam

On his first visit to Hanoi, U.S. President Barack Obama announced that the United States would lift its ban on arms sales and transfers to Vietnam.
(KHAM/AFP/Getty Images)
Forecast Highlights
  • In lifting its ban on weapons sales and transfers to Vietnam, Washington will lay the groundwork for greater maritime cooperation, realizing a modest but key piece of its broader strategy in the region.
  • The move may also curry favor with hawkish Vietnamese leaders at a time of political transition in Hanoi.
  • Cost constraints will limit Vietnamese interest in U.S. arms.

Just over 41 years after Vietnam defeated the United States and its allies, the White House is moving to dispense with another vestige of Cold War-era policy in the service of emerging strategic needs. On May 23, while standing beneath a bust of revolutionary leader Ho Chi Minh in Hanoi, U.S. President Barack Obama announced that Washington would lift its longstanding ban on weapons sales or transfers to Vietnam.

Vietnam is a singularly important party in the dispute over the South China Sea, so Washington is keen to help develop the country into a more robust check on China's maritime expansion. But lifting the ban will not drastically alter the security landscape in the region. Cost constraints and political divisions in Hanoi will curb Vietnam's appetite for advanced U.S. weaponry, and the country will continue to rely on its traditional military partners. Nonetheless, the decision will ease suspicions of U.S. intentions in Hanoi and lay the groundwork for stronger military ties, supporting Washington's broader strategy in the region.

Vietnam's Strategic Importance

Ties between Washington and Hanoi have steadily improved since diplomatic relations resumed in 1995, in large part because of Vietnam's strategic importance in the Western Pacific. The country is one of the most outspoken opponents of China's territorial claims in the South China Sea, as well as one the most willing to risk confrontation over those claims. This view is shaped by the centrality of maritime activity to the Vietnamese economy. In addition, China and Vietnam share a history of territorial disputes, including a brief border war in 1979, a hasty 1988 naval skirmish over the Paracel Islands, and a 2014 standoff over a Chinese oil rig in Vietnamese waters

As a result, Vietnam is one of Southeast Asia's most aggressive military spenders. Hanoi devoted nearly 8 percent of its 2015 budget to defense and is expected to spend more than $5 billion this year (up from an estimated $1 billion a decade ago). Even so, this sum pales when compared with the estimated $215 billion that Beijing spent on defense last year. Vietnam's inferior financial and military resources deter the country from engaging China in protracted naval combat.

Over the past decade, Vietnam's annual military spending has accounted for around 2-2.25 percent of its GDP, rising from just over $1 billion to $4.5 billion.

Washington is under no illusion that it can build Vietnam into China's military equal, nor does it think Hanoi seeks the kind of alliance that Washington enjoys with Japan and South Korea. Instead, the United States aims to empower Vietnam to better defend its own claims and to strengthen cooperation with its neighbors, as envisioned by the Pentagon's Southeast Asia Maritime Security Initiative. Removing the embargo is just the latest of a number of U.S. moves to encourage and equip regional states to contain Chinese maritime expansion.

Though the United States repeatedly rejected Hanoi's past requests to end the ban (ostensibly over its poor human rights record), Washington has been incrementally removing barriers to military cooperation with Vietnam. In 2007, the United States modified the ban, allowing the sale of nonlethal military equipment and services to Vietnam on a case-by-case basis. In 2014, Washington began to permit some transfers of lethal maritime security and surveillance assets. Since then, the United States has made modest pledges to Vietnam, offering $18 million for U.S.-made patrol boats and around $40 million to bolster the country's maritime intelligence, surveillance and reconnaissance capabilities.

The United States Is Late to the Game

Fully lifting the ban, however, will not fundamentally change the military balance in the region. This is, in part, because other countries are already meeting most of Vietnam's military needs.

Russia, the world's second-largest arms exporter, has provided the bulk of Vietnam's defense support and equipment since the Soviet era. Because Russia has fewer direct interests in the South China Sea than China and the United States do, Hanoi — historically wary of strong outside alliances — views Moscow as an ideal, if limited security partner. (For similar reasons, Thailand and Laos recently signed military deals of their own with Russia.) Notable Vietnamese purchases from Russia include fighter jets, guided-missile corvettes, and mobile coastal defense and anti-ship missile systems. In December 2015, Hanoi deployed the first of six Russian-made Kilo-class submarines to patrol the South China Sea, and it received its fifth in January. Earlier this month, Russia announced that it would deliver two more Gepard-class frigates to Vietnam in August and September. Russian firms have also been helping to modernize the strategic deep-water port at Cam Ranh Bay.

Russia's role in Vietnam's defense plans will not diminish any time soon. Nonetheless, Hanoi is diversifying its arms suppliers. India, in addition to funding patrol boats and providing submarine training, is building a ground station for its satellites in Vietnam, boosting Hanoi's surveillance over the South China Sea. Vietnam is also reportedly in the market for artillery systems from France, anti-aircraft missiles from Israel, and surveillance planes from Canada, among other foreign systems. These suppliers either offer lower prices upfront than the United States does, or they give Vietnam the potential to cut future costs by helping develop its nascent domestic arms sector. For instance, Vietnam has been producing Israeli small arms under license.

The Limited Appetite for U.S. Arms

Still, the Vietnamese military is interested in buying advanced U.S. weaponry. Hanoi fervently lobbied the United States to overturn its embargo, and Vietnam hosted a symposium for U.S. defense contractors in early May. In particular, Hanoi is reportedly interested in U.S. helicopters, communications equipment, and possibly even used F-16 fighter jets. 

Relationships with U.S. contractors will improve Vietnam's bargaining position with its traditional suppliers. Furthermore, familiarity with U.S.-made systems will facilitate interoperability with other Southeast Asian militaries, particularly those of the Philippines, Malaysia and Singapore, with which Hanoi is eager to boost maritime cooperation. While the cheaper Russian gear supports the surface and air components of Vietnam's anti-access and area denial strategy in the South China Sea, Hanoi may believe that higher-end U.S. equipment is needed for anti-submarine warfare, which requires substantial intelligence, surveillance and reconnaissance capabilities. To that end, Vietnam is reportedly eyeing U.S.-made aerial surveillance planes such as P-3 Orions.

But despite its military buildup, Vietnam is in no position to splurge on top-end systems. In 2015, the country's gross domestic product was just under $200 billion, on par with that of a small, poor Chinese province. A single U.S.-made F-35 fighter jet could cost upward of $100 million. Indeed, since Washington relaxed the weapons ban in 2014, Vietnam has reportedly yet to buy any U.S. equipment, primarily because of cost concerns. Meanwhile, Vietnam's near-total reliance on Russian equipment would complicate the introduction of U.S.-made technologies, requiring the military to retool well-honed maintainance, training, and supply chain operations and posing interoperability challenges among its various weapons systems.

Broader Benefits

Still, Vietnam's demonstrated interest in making even limited arms purchases from the United States provides more substantive evidence that China's posture in the region is provoking backlash. And despite Vietnam's budgetary limits, lifting the ban will enable the United States to render much greater military aid in the future. Perhaps most important, each weapons transfer — with associated exchanges of personnel for training and maintenance — will foster familiarity and trust between the U.S. and Vietnamese militaries, thereby paving the way for stronger ties going forward.

The Pacific Rim has numerous overlapping maritime claims.

Washington hopes the move will encourage military cooperation in other areas, such as joint maritime drills. During Obama's visit, Vietnam agreed to allow the Pentagon to establish equipment depots in the country for humanitarian and disaster relief operations. Above all, Washington wants greater access to Cam Ranh Bay and other strategic ports on the South China Sea. (The U.S. Navy is allowed only one visit to Vietnamese ports per year, while Russian ships have long enjoyed privileged access to Cam Ranh Bay.) Hanoi will not let any country establish a permanent military base in Vietnam, but it has slowly opened Cam Ranh Bay to foreign warships for training missions and resupply. Japan, Singapore and France have already made use of the new permission this year.

Ultimately, the extent of military cooperation between the United States and Vietnam will depend on whether repealing the ban empowers hawkish leaders in Hanoi, particularly those in the politically powerful military. Earlier this year, a contentious power transition in the Vietnamese Communist Party left unresolved deep divides among Party leaders over how forcefully to resist China's encroachment in the region, and much of the senior leadership remains suspicious of U.S. intentions. Though the Party signed on to the U.S.-led Trans-Pacific Partnership trade pact, it routinely warns that unfettered integration with the West — particularly through trade or foreign investment — could give rise to a color revolution. The Party believes that, to ensure its survival, it must maintain tight control over the pace of economic reform and political liberalization.

For Washington, maintaining the arms ban as leverage on human rights would have deepened such suspicions while doing little to compel Hanoi to reform. However seriously the U.S. should prioritize human rights issues, the ban placed a limit on both economic and military cooperation at a pivotal time for both the new crop of Vietnamese leaders and the broader strategic landscape.

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