Now That Vietnam Can Buy U.S. Weapons, What Will It Want?

By Jackie Northam

Published May 24, 2016 at 4:05 AM CDT

Vietnamese navy officers (in white) talk with U.S. sailors aboard the guided missile destroyer USS Chafee in the central Vietnamese city of Danang in 2012. The two countries have increased military cooperation in recent years and President Obama announced Monday that he was lifting the ban on weapons sales to Vietnam.

President Obama's decision to lift a decades-old ban on the sale of lethal military equipment to Vietnam opens up potentially lucrative contracts for U.S. defense companies.

The Vietnamese leadership has been pushing hard for access to American military systems and has a relatively small but quickly growing defense budget, says Ben Moores, a defense specialist at the consultancy IHS Janes. He says that includes a roughly $13 billion wish list for military equipment.

"That's everything from tanks, armored personnel carriers, attack helicopters, tactical helicopters, long range radars, maritime patrol aircraft. So they've got a wide range," he says.

Vietnam has had a long relationship with Russia, from which it buys more than 80 percent of its military hardware.

Anthony Nelson of the US-ASEAN Business Council says lifting the arms embargo doesn't mean Vietnam will rush into the arms of U.S. weapons manufacturers.

"I don't think it's a kind of transformative development," he says. "It's not going to immediately lead to enormous arms purchases or a complete reboot of their military."

But China — Vietnam's regional rival — is also familiar with the Russian weaponry, and Hanoi will likely want to diversify as tensions grow in the South China Sea.

A Vietnamese man and child look at models of weapons at the Vietnam People's Air Force Museum on May 23 in Hanoi. President Obama announced during the first day of his visit this week that the U.S. is fully lifting its embargo on sales of lethal weapons to Vietnam.

Nelson says this is where U.S. defense companies will look to compete with sophisticated technology especially for use at sea.

"In particular in command and control, in maritime domain awareness, in communications ... it's going to make a big difference," he says. "U.S. companies will definitely be interested in competing there."

Nelson points to Lockheed Martin's P-3 Orion patrol craft, which he says could help in submarine command and control, and Raytheon's radar systems designed for maritime use.

But the U.S. has plenty of competition besides Russia.

Greg Poling, an Asia specialist at the Center for Strategic and International Studies, says Vietnam already buys missiles from India, radar from Israel, and coast guard vessels from Japan and Korea.

Poling says lifting the embargo will not likely be an immediate windfall for U.S. defense companies. He says the move is more symbolic than a nod to American arms manufacturers.

"What this really is is a symbol of is the normalization of relations," says Poling. "That we're finally at a normal partnership with Vietnam."

He said that move was inevitable, but "certainly the fear that China has created has helped accelerate that timetable by several years."

Analysts say it could take several years before any U.S. weapons system arrives in Vietnam. Two years ago, the administration partially lifted the lethal weapons ban for Vietnam's maritime defense, yet there still hasn't been a major purchase from the U.S.