U.S. President Barack Obama begins a landmark visit to Vietnam this week but it's unlikely he can satisfy the two key areas of focus for local policymakers, strategists told CNBC.
Obama landed in Hanoi early on Monday, becoming the third U.S. leader to visit the Socialist Republic since the end of the Vietnam War and marking the 10th Asian trip of his presidency. The visit was "the right thing to do," Chuck Hagel, former U.S. Secretary of Defense during Obama's second administration, told CNBC's "Squawk Box," adding that Washington has made remarkable progress in reconciling with the Vietnamese in recent years.
During Obama's three-day visit, much emphasis is expected to be placed on the Trans-Pacific Partnership Deal (TPP) and an embargo that prevents Washington from selling arms to Hanoi. But not much traction is expected on either front.
As the biggest trade deal in a generation, the TPP is set to usher in a new period of growth for export-oriented Vietnam, whose economy is already expanding at the fastest pace in seven years.
"Vietnam is going to be the best beneficiary of TPP. Textiles and the apparel sector will see the greatest benefits in term of an immediate slash of tariffs in the U.S. and other markets," said Eric Shimp, policy adviser at international law firm Alston & Bird.
But chances of Congress approving the deal this year remain slim amid hostility to new trade liberalization from both Democrats and Republicans.