By Matt Spetalnick and Martin Petty
HANOI (Reuters) - U.S. President Barack Obama is set to lay out more of his plan for a stronger alliance with Vietnam on Tuesday, after scrapping an arms ban that was the last big hurdle between two countries drawn together by concern over China's military buildup.
The removal of a vestige of the Vietnam War suggests U.S. worries about Beijing's reclamation of islands in the South China Sea and deployment of advanced radars and missile batteries in the disputed region trumped concerns about Vietnam's human rights record.
Washington had for years said a lifting of the ban would require concrete steps by Vietnam in allowing freedom of speech, worship and assembly and releasing political prisoners.
In a joint news conference on Monday with Vietnamese counterpart Tran Dai Quang, Obama said "modest" human rights improvements had been made and the decision to end the embargo was about the changing dynamic in ties and "not based on China".
Obama is to meet civil society representatives on Tuesday, among them dissidents, who may disagree with his arms ban decision. Some Vietnamese activists have expressed disappointment that Obama may have given away leverage with the communist leadership.
A U.S. official, speaking on condition of anonymity, said there was evidence engagement had worked in nudging Vietnam to make concessions, like its "unprecedented" commitment to set up independent labor unions under a U.S.-inspired Trans-Pacific Partnership (TPP) trade deal.
In a statement late on Monday, Communist Party chief Nguyen Phu Trong spoke of the importance of building relations of mutual respect while "not interfering in each other's internal affairs".
Obama will give a speech in Hanoi about the development of relations since normalization in 1995 and will champion his signature TPP, which would remove tariffs within a 12-nation bloc worth a combined $28 trillion of gross domestic product.
Vietnam's manufacturing and export-led economy is seen as the biggest TPP beneficiary. Annual U.S-Vietnam trade has swelled from $450 million when ties were normalized to $45 billion last year, and Washington is a big buyer of Vietnam's televisions, smartphones, clothing and seafood.
The TPP is not a done deal, with opposition expected in Washington amid concerns about competition and a loss of U.S. jobs. Obama said he was confident the trade pact would be approved by legislators and he had not seen a credible argument that the deal would dent American business.
Obama will on Tuesday fly to Ho Chi Minh City, the country's commercial hub, which was called Saigon until North Vietnamese tanks rolled into the city in April 1975 to bring U.S.-backed South Vietnam under communist rule.
He will meet young entrepreneurs at one of the co-working spaces that host Vietnam's budget tech startups, which have been receiving attention from angel investors and Silicon Valley funds.
Obama spoke of a U.S. intention to work more closely in defense areas with Vietnam, which is keen to build a deterrent against China. Vietnam and the United States last year held coastguard and humanitarian training exercises.
Washington has longstanding defense alliances in the region with the Philippines, which is also at odds with China, and Thailand, and organizes annual war games with both.
(Additional reporting by Mai Nguyen, Ho Binh Minh and My Pham; editing by Andrew Roche)