Last Updated May 23, 2016 4:33 AM EDT
HANOI, Vietnam -- President Obama on Monday lifted a half-century-old ban on selling arms to Vietnam during his first visit to the communist country, looking to bolster a government seen as a crucial, though flawed partner in a region he's tried to place at the center of his foreign policy legacy.
Obama announced the full removal of the embargo at a news conference where he signaled a desire to leave behind the troubled history between the former war enemies and reward what he described as modest progress on human rights in the one-party state.
"At this stage, both sides have established a level of trust and cooperation, including between our militaries, that is reflective of common interests and mutual respect," Obama said, adding that every U.S. arms sale would be reviewed case by case. "This change will ensure that Vietnam has access to the equipment it needs to defend itself and removes a lingering vestige of the Cold War."
Obama is seeking to strike a balance with Vietnam, which he called a vital country in one of the world's most vital regions, amid Chinese efforts to strengthen claims to disputed territory in the South China Sea, one of the world's most important waterways.
Obama said the United States and Vietnam had mutual concerns about maritime issues and the importance of maintaining freedom of navigation in the South China Sea. He said that although Washington doesn't take sides on the territorial disputes, it does support a diplomatic resolution based on "international norms" and "not based on who's the bigger party and can throw around their weight a little bit more," a reference to China.
Lifting the arms embargo will be a psychological boost for Vietnam's leaders as they look to counter an increasingly aggressive China, but there may not be a big jump in sales. Vietnamese President Tran Dai Quang praised the expansion in security and trade ties between "former enemies turned friends" and called for more U.S. investment in Vietnam. He said there was enormous bilateral trade growth potential.
The presidents attended a signing ceremony celebrating a series of new commercial deals between U.S. and Vietnamese companies. The White House said the value of the transactions was more than $16 billion.
The deals included U.S. engine manufacturer Pratt & Whitney's plans to sell 135 advanced engines to Vietnamese air carrier Vietjet and Boeing's plans to sell 100 aircraft to airline. The White House says the Boeing deal is expected to support 60,000 American manufacturing and technology jobs.
The White House also announced an agreement between GE Wind and the Vietnamese government to develop 1,000 megawatts of wind-generated electricity.
The Reuters news agency notes that, "There has been much excitement about Mr. Obama's visit in a country with a young population firmly behind closer U.S. ties and resentful of their economic dependence on China.
U.S. lawmakers and activists had urged the president to press the communist leadership for greater freedoms before lifting the arms sale embargo. Vietnam holds about 100 political prisoners and there have been more detentions this year.
Obama said the countries still have differences over human rights but noted modest improvements by Vietnam.
The United States partially lifted the embargo in 2014, but Vietnam wanted full access as it tries to deal with China's assertive land reclamation and military construction in nearby seas. Vietnam has not bought anything, but removing the remaining restrictions shows relations are fully normalized and opens the way to deeper security cooperation.
After three days in Vietnam, Obama heads to Japan for an international summit and a visit to Hiroshima, where he will be the first sitting president to visit the site of the first atomic bomb attack.
He arrived in Hanoi, the capital, late Sunday, making him the third sitting president to visit the country since the end of the war. Four decades after the fall of Saigon, now called Ho Chi Minh City, and two decades after President Bill Clinton restored relations with the nation, Obama is eager to upgrade relations with an emerging power whose rapidly expanding middle class beckons as a promising market for U.S. goods and an offset to China's growing strength.
Obama was greeted Monday by Quang at the Presidential Palace. Obama congratulated Vietnam for making "extraordinary progress." He said he hopes the visit will show a continued interest in strengthening ties in the years to come.
Obama will make the case for stronger commercial and security ties, including approval of the 12-nation Trans-Pacific Partnership trade agreement that is stalled in Congress and facing strong opposition from the 2016 presidential candidates. The deal, which includes Vietnam, would tear down trade barriers and encourage investment between the countries that signed it.
Critics worry it would cost jobs by exposing American workers to low-wage competition from countries such as Vietnam. They also say it would allow multinational corporations to challenge local laws by saying they violate the trade deal.
Obama acknowledged the difficulties that TPP is facing in an election year, but said he was confident it would happen because "it's the right thing to do" for the United States, the region and the world. He said the deal would raise labor standards in the region to ensure workers have a better voice.
The United States is eager to boost trade with a fast-growing middle class in Vietnam that is expected to skyrocket in coming years. That would mean knocking down high auto, food and machine tariffs to get more U.S. products into Vietnam.
In Japan, Obama will attend a summit of the Group of Seven industrialized nations, where the uncertain global economy will be a top concern. They'll also grapple with a full array of world challenges, including the fight against the Islamic State group in Iraq and Syria and the refugee crisis in Europe.
Obama will finish his trip in Hiroshima, where the U.S. dropped the atomic bomb that killed 140,000 people, ushering in the nuclear age seven decades ago. Another bomb killed 70,000 in Nagasaki three days later.
It will be a moment to reflect on the devastating costs of war and to try to give new impetus to the call for a nuclear-free world that Obama issued seven years ago in his first year as president. He has faced criticism, however, that his mere presence at the site of the a-bomb explosion could be viewed as apology for an act that many Americans see as justified.