The visit takes place at a time when Vietnam-US relations are entering a new period of stable and long-term partnership, particularly following the US visit by the then Prime Minister Phan Van Khai in June 2005.

Economic and trade relations between the two countries have flourished in recent years. The two countries have signed several agreements on copyright protection, bilateral trade cooperation, sci-tech cooperation, aviation, and economic and technical cooperation. On May 31, 2006, Vietnam and the US signed an agreement concluding bilateral negotiations on the former’s accession to the World Trade Organisation (WTO). The US is currently considering an approval of permanent normal trade relations (PNTR) with Vietnam.

Since the Vietnam-US Bilateral Trade Agreement came into effect on December 10, 2001, two-way trade has increased sharply, reaching US$7.8 billion in 2005 – a five-fold increase against the 2001 figure and 17-fold increase against the 1995 figure. Bilateral trade value is expected to hit US$10 billion this year.

The US now ranks ninth among foreign investors in Vietnam with a total investment capital of approximately US$2 billion. But the capital may reach nearly US$4 billion if US investment via third countries is included.

Currently, almost 1,000 US businesses are operating in Vietnam and the figure is expected to rise in the coming years. Recently, a large number of giant US companies and groups visited Vietnam to seek business and investment opportunities. Worthy of note were visits by a delegation of the US-Vietnam Business Council comprising 21 leading companies (in March 2006) and the Chairman of Microsoft Corporation Bill Gates (in April 2006). Earlier, global chip manufacturing giant, Intel, decided to invest US$600 million in an assembly and test facility at the Saigon Hi-tech Park. The two sides are discussing the possibility of cooperating in other investment projects totalling billions of US dollars.

Progress has also been made in the tourism sector. Last year, US visitors to Vietnam numbered 333,566, ranking it second among other countries. In the first five months of this year, Vietnam welcomed 162,800 Americans, a year-on-year increase of 23.5 percent.

While continuing to implement agreements signed during Prime Minister Phan Van Khai's US visit in 2005, the two countries have simultaneously expanded cooperation in specific areas.

Cooperation in healthcare has been stepped up, focusing on the fight against HIV/AIDS and bird flu. In 2006, the US pledged US$34 million for Vietnam’s HIV/AIDS prevention programme and US$6.5 million for fighting bird flu. The two countries signed an agreement on health and medical science during a US visit in August 2006 by Minister of Health Tran Thi Trung Chien.

Regarding humanitarian issues, Vietnam has been cooperating effectively with the US in the search for US servicemen missing in action (MIA) during the war. To date, the two countries have conducted 87 joint searches and Vietnam has handed over the remains of 850 personnel to the US. Recently, the US House of Representatives approved resolution H.Res 444, expressing thanks to Vietnam for its effective cooperation in MIA issues. 

Meanwhile, the US has also collaborated with Vietnam in resolving the consequences of the war, including clearance of unexploded bombs and mines, chemical sterilisation and Agent Orange-related issues.

Bilateral cooperation in security and military affairs has also seen positive development. The two sides maintained visit exchanges by senior officers to promote mutual understanding. Since 2003, US naval ships have docked at Vietnamese ports annually as part of activities within the bilateral cooperation framework. The two countries also explored the possibility of developing future cooperation in the area of search and rescue.

Cooperation between Vietnam and the US has developed considerably in recent times, but has not yet fully met its potential. President Bush’s visit to Vietnam is expected to promote mutual understanding and start a new chapter in bilateral relations.