Exclusive-U.S. defence companies in talks to sell Vietnam helicopters, drones -sources

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By Francesco Guarascio

HANOI (Reuters) -U.S. defence firms have discussed supplying military gear, including helicopters and drones, to Vietnam in talks with top government officials, two sources with knowledge of the dialogue told Reuters, a new sign the country may reduce its reliance on Russian arms.

Lockheed Martin (NYSE:LMT), Boeing (NYSE:BA), Raytheon (NYSE:RTN), Textron (NYSE:TXT) and IM Systems Group met with the officials on the sidelines of the country's first large-scale arms fair last week, according to the US-ASEAN Business Council, the industry body that arranged the meetings.

A source who was present at the weapons discussions said they involved the Ministry of Public Security and Ministry of National Defence.

The preliminary talks, which may not lead to any deals, come as the Southeast Asian nation seeks new suppliers and the Ukraine conflict strains the capabilities of Russia, for decades Vietnam's main military partner. The war, which Moscow calls a "special operation", has also led to strict sanctions against Russia.

"This marks the beginning of a more open-minded Vietnam People's Army to U.S. weapons, and a willingness to engage deeper with the U.S. in defence as a whole," said Nguyen The Phuong, a military expert and researcher at the University of New South Wales.

Military deals with the U.S. face many potential hurdles, including that Washington might block arms sales over human rights; concerns about the impact on Hanoi's tense relations with China; high costs; and whether U.S.-made systems can be integrated with Vietnam's legacy weapons, analysts said.

The person who attended the meetings said the companies offered a range of military gear and had "promising" discussions about non-lethal equipment, including helicopters for internal security, plus drones, radars and other systems to keep watch on the air, the sea and space.

Vietnam's defence and foreign ministries did not respond to a request for comment.

A second person familiar with the matter said talks on drones and helicopters began before the arms fair and have involved more weapons.

Lockheed Martin, which showcased fighter and military transport planes at the event, declined to comment.

A Boeing spokesperson referred questions to Vietnam's defence ministry. Raytheon, Textron and IM Systems Group did not respond to requests for comment.

The discussions show the United States' growing efforts to gain influence with Hanoi, nearly half a century after the end of the Vietnam War. Since an arms embargo was lifted in 2016, U.S. defence exports to Vietnam have been limited to coastguard ships and trainer aircraft, while Russia has supplied about 80% of the country's arsenal.

The arms fair attracted dozens of defence companies from 30 countries, all hoping to get a share of the estimated $2 billion Vietnam spends annually in arms imports amid on-off tensions with its neighbour China.

Both sources, who asked not to be named because the talks were confidential, said Lockheed Martin separately had discussions with Vietnam about a new communication and defence satellite, which could replace one of the two from the U.S. company Hanoi already operates.

The U.S. embassy in Hanoi declined to comment, but Ambassador Marc Knapper has said the U.S. stood ready to discuss any military item Vietnam might want to acquire.

The U.S. military has already supplied two relatively small naval cutters and transferred two T-6 Texan trainer aircraft, of which another 10 will be shipped by 2027. It has also pledged Boeing ScanEagle reconnaissance drones, which have not yet been delivered.

Sources and analysts said Vietnam is also considering deals with suppliers from Israel, India, and European and Northeast Asian countries. In the last decade, Israel has been the second-biggest seller of weapons to Vietnam after Russia.