By Martin Petty and Lesley Wroughton
HANOI/WASHINGTON (Reuters) - Vietnam's Communist Party chief will visit the United States next week in a landmark trip that could prove pivotal in Washington's bid to bolster its Asian alliances in the back yard of an increasingly assertive China.
Nguyen Phu Trong will meet U.S. President Barack Obama at the White House as the former war enemies mark two decades of calibrated engagement since the normalization of ties that have expanded rapidly in the past year.
That meeting would skirt protocol because party boss Trong is not part of a government, but a senior state department official said Obama saw the visit as crucial and was expecting a "very big picture conversation".
"He is the top guy... It's a pretty big event," the official told reporters.
"There was a broad agreement that it made sense to treat him and treat the visit as the visit of the top leader of the country.
"We don't view the meeting as a reward for the Vietnamese. We view it much more as continuing engagement."
The July 6-10 trip follows a year-long charm offensive by the United States launched as a fierce row over sovereignty erupted in May 2014 between communist neighbors Vietnam and China, which saw relations sink to their worst in three decades.
Washington capitalized, shifting gear in its diplomacy after China parked an oil rig unannounced in what Vietnam considers its domain.
"The relationship with Vietnam has moved to a very different place and part of that has been actually energized by China's actions," Deputy Secretary of State, Antony Blinken, said last week.
"We now have more countries in Southeast Asia looking to the United States and striking stronger relationships with us than we've ever had, less because of what we've done than because of what China has done."
A lot is riding on a visit that the United States hopes will build more trust. Experts say progressives in Vietnam favor closer U.S. ties, but suspicion lingers among conservatives about Washington's end-game.
The United States has been courting the communist leadership with visits to Vietnam by some of the biggest names in Washington: top General Martin Dempsey, Secretary of State John Kerry, Defense Secretary Ash Carter, Senator John McCain, Democratic Leader Nancy Pelosi, Secretary of the Interior Sally Jewell and several legislators.
Former President Bill Clinton met Trong, 71, on Thursday and was guest at an Independence Day celebration in Hanoi, where he described the 1995 normalization of ties as "one of the most important achievements of my presidency."
A lot has changed since.
Vietnam is Southeast Asia's biggest exporter to the United States, with which it shares annual trade of $35 billion. Both countries are among 12 negotiating a Trans-Pacific Partnership (TPP) accord covering combined GDP of $28 trillion.
A lethal arms embargo on Vietnam was eased in October, allowing joint military exercises and $18 million in loans for U.S. patrol boats. It also allowed consultations on defense procurement, as Hanoi seeks to build up a deterrent to counter Beijing's expansionism in the South China Sea.
Vietnam has been speaking to Western defense companies, including U.S. firms Lockheed Martin Corp and Boeing, according to informed sources.
But scope for deals could be limited until the embargo is fully lifted. Washington says that requires greater improvements in Vietnam's human rights record.
Ernest Bower, a Southeast Asia expert at the Center for Strategic and International Studies, said Trong's visit was "historic and timely" and aimed to break down trust barriers.
"The two countries ... are about to enter a new era of deeper cooperation in areas such as security, political and diplomatic alignment," he said.
"The countries' political leaders must develop a level of trust and mutual respect. That is what this visit is about."
(Additional reporting Idrees Ali in Washington and David Brunnstrom in Washington; Editing by Mike Collett-White)