(Reuters) - The Biden administration is in talks with Vietnam over an agreement for the largest arms transfer in history between the ex-Cold War adversaries, according to two people familiar with a deal that could irk China and sideline Russia.
A package, which could come together within the next year, could consummate the newly upgraded partnership between Washington and Hanoi with the sale of a fleet of American F-16 fighter jets as the Southeast Asian nation faces tensions with Beijing in the disputed South China Sea, one of the people said.
The deal is still in its early stages, with exact terms yet to be worked out, and may not come together. But it was a key topic of Vietnamese-U.S. official talks in Hanoi, New York and Washington over the past month.
Washington is considering structuring special financing terms for the pricey equipment that could help cash-strapped Hanoi steer away from its traditional reliance on lower-cost, Russian-made arms, according to the other source, who declined to be named.
Spokespersons for the White House and Vietnamese foreign ministry did not respond to requests for comment.
"We have a very productive and promising security relationship with the Vietnamese and we do see interesting movement from them in some U.S. systems, in particular anything that can help them better monitor their maritime domain, perhaps transport aircraft and some other platforms," said a U.S. official.