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Although the prospects for short term advantages from removing the embargo may be limited, the long term benefits for both Vietnam and the US could be significant.

Opening New Horizons: Lifting the US Arms Embargo on Vietnam

July 7th, 2016

By Davis Florrick – Junior Fellow

President Obama’s decision to remove the embargo on US arms sales to Vietnam is noteworthy for both symbolic and strategic reasons. In many ways, the ban on defense trade had been a symbol of the US approach to Hanoi since the Vietnam War. Rightly or wrongly, it served as a barrier to advancing the bilateral partnership between Vietnam and the US and could have been utilized as a divisive tool by China at a later date. By removing the ban, the Obama Administration can demonstrate to the Asia-Pacific region the seriousness with which it takes the ongoing territorial disputes in the South China Sea. Although the short term impact of this action is debatable, fully lifting the embargo carries significant political weight, as demonstrated by the headline in the Global Times – a Chinese government-run paper – declaring “Washington uses past foe to counter China.” From a strategic standpoint, the deal may present significant long term advantages. At present, more than 90% of Vietnamese arms purchases are with Russian manufacturers, a vestige of the Cold War. However, as the US, Japan, and other like-minded states begin further penetrating the Southeast Asian defense market, the value in commonality may prove valuable for Vietnam. Over the long term, potential asymmetric technological advantages derived from US and partner systems as well as the benefits of regional integration may motivate Vietnam to separate itself from the Russian defense cabal.

In the short term, US arms sales to Vietnam will be constrained to a narrow range of options. For over sixty years, Hanoi has bought most of its military hardware from Moscow. Given the associated financial commitment of these decisions, Vietnam cannot immediately separate itself from Russia. Similarly, its armed forces have trained on Russians systems, so an expeditious shift to US technology would be difficult. However, there remain opportunities for short term cooperation. First, Hanoi is likely to pursue purchases of spare parts needed to operationalize equipment captured during the Vietnam War. Second, and more importantly, US niche technologies will serve to augment Vietnam’s forces. Providing maritime surveillance aircraft and other patrol vessels is needed for Hanoi to maintain the best possible awareness of what is taking place off its shores. With these added capabilities, Vietnam will be in a better position to monitor Chinese maritime activities. As a result, Beijing will have more difficulties asserting new territorial claims at Hanoi’s expense. Albeit not a full-fledged shift in Vietnamese acquisition policy, initial purchases of US assets will begin to change Hanoi’s defense spending.

Despite the Vietnamese reliance on Russian systems and the impediment to arms transfers that present, the Obama Administration shift on the embargo has sent an important signal to its regional partners. The lingering effects of the Vietnam War have served as a reminder to states across Southeast Asia that the political will behind US military action can be finite. In this context, many leaders throughout the region have long been reluctant to advance their partnership options with Washington. However, Beijing’s aggressive actions have had the effect of pushing Southeast Asian states toward enhancing their engagement opportunities with the US. Against this backdrop, the Obama Administration’s decision to tear down the last remaining vestige of the Vietnam War’s legacy is noteworthy. Washington’s move demonstrates to counterparts around the South China Sea that the US takes Beijing’s demonstrative actions seriously. In Vietnam, US officials have shown newfound political determination to set longstanding policies aside for the sake of current priorities. The Obama Administration’s actions cannot but help bolster the perception of the US among regional actors. The symbolism of Washington’s shift, regardless of the short term technical benefits to Hanoi, carries much broader utility for the US’s Rebalance to the Asia-Pacific. Lifting the ban represents a clear change in the Obama Administration’s commitment to countering China’s destabilizing choices.

Over the long term, Washington’s shift is part of a larger transformation taking place in Southeast Asia. Already, leaders in capitals throughout the region, including Hanoi, Jakarta, and Manila, are drifting away from Beijing. The shift in Southeast Asia lies in stark contrast to the positive relationships many of the region’s states had with China following the Cold War. And although economic integration with Beijing will remain pivotal for its southern neighbors, the strategic evolution of regional attitudes vis-à-vis China could have significant impacts on US and partner arms sales.

Washington’s decision to lift the arms embargo is just the latest in a series of initiatives by the US and its partners that will promote more pro-active security polices in Southeast Asia. In parallel to US actions, Japan has shifted its policies on foreign armament sales. Perhaps more subtly, Australia’s and India’s respective leaders have made statements in recent months highlighting their intent to play greater roles in the South China Sea dispute. In this context, the US shift on Vietnam is one more step on the road toward greater involvement in Southeast Asia. These changes could represent an alteration in how the South China Sea territorial disputes are handled. More external influences operating in Southeast Asia is providing regional actors with alternatives to China, thereby complicating Beijing’s ability to compel its southern neighbors.

US arms sales could further benefit from the potential integration among Southeast Asian states. Indeed, just as important as the increasing influence of US partners has been the mounting cohesion among local parties. Whether through the Association of Southeast Asian Nations or ad hoc activities, Southeast Asian states are gradually moving toward closer, more comprehensive relationships. For instance, Hanoi and Manila are exploring joint exercises and naval patrols in the South China Sea in an effort to bolster their means to oppose Beijing. Under these conditions, technological, strategic, and operational integration is desirable. Developing commonalities along similar lines to what exists between the US and its Asia-Pacific partners would make the best use of resources available to the Southeast Asian states. As a result, any decision to gradually increase purchases of US and partner defense technologies, as well as holding dialogue sessions and other interactions, would prove pragmatic for Vietnam.

Only adding to the probability of Hanoi moving toward Washington is the complex trilateral relationship among Vietnam, Russia, and China. Moscow’s desire to remain a global arms supplier means it is peddling its wares to both Beijing and Hanoi. Considering the commonalities this relationship offers to China and Vietnam, there are unique dynamics both must weigh. Risks of Russia supporting one over the other in a confrontation, thereby leading to supply problems, or the Kremlin providing technological advantages to one party, could lead to a disadvantage for Hanoi. Recognizing the complex relationship between Beijing and Moscow, as well as Russia’s inability to support Vietnam when China invaded in 1979, the leadership in Hanoi may want to explore other options to reduce its dependency on Russian technologies. Arms purchases from the US may be the perfect opportunity to change Vietnam’s present outlook.

The growing economic relationship between Hanoi and Washington offers additional incentives for both parties to explore arms sales. Should Vietnam’s economy continue to grow in the coming years, Hanoi will have excess revenue to spend. Investing in Washington’s defense industries would offer a means to maintain low inflation while also further bolstering cooperation the US. This approach would help Vietnam maintain low wages, thereby keeping operating costs low. At the same time, the US economy will benefit from the progressing economic relationship.

US-Vietnam arms sales in the short term will be focused on niche capabilities, but the potential exists for comprehensive opportunities in ten to twenty years. Given Hanoi’s heavy reliance on Moscow for its defense equipment, any shift will take considerable planning and a lengthy transition. Yet, removing the arms embargo has significant political symbolism. By retracting one of the last vestiges of the Vietnam War, the Obama Administration has further demonstrated the seriousness with which it takes territorial disputes in the South China Sea. Just as importantly, the increasing integration among the US, its partners, and the Southeast Asian community carries the potential for enhanced defense cooperation over the long term. Further influencing decision makers in Hanoi, the close relationship between Beijing and Moscow, as well as Vietnam’s desire to leverage US markets for its export industries, make acquiring increasing quantities of defense technology from Washington more likely. Cumulatively, although the prospects for short term advantages from removing the embargo may be limited, the long term benefits for both Vietnam and the US could be significant.


About Davis Florick

Davis Florick is a Senior Fellow in the HSC Security and Defence division, a Special Assistant to the United States Deputy Under Secretary of Defense for Policy, and a James A. Kelly non-resident fellow with the Pacific Forum. He has completed his Executive MBA at the University of Virginia Darden School of Business, holds a master’s in East-West Studies at Creighton University, and will be starting his PhD in International Relations at George Mason University in Fall, 2018. His foreign relations areas of concentration include East Asia and the former Warsaw Pact and Soviet Union. Davis has been published in International Affairs Forum, the World Business Institute, and the International Affairs Review, the Diplomat and RealClearDefense. He was also a member of the 2015 Nuclear Scholars Initiative with the Center for Strategic and International Studies.