[226] When the French fortress of Dien Bien Phu fell to the Vietnamese Communists in May 1954, Eisenhower refused to intervene despite urgings from the Chairman of the Joint Chiefs, the Vice President and the head of NCS.[227]
Eisenhower responded to the French defeat with the formation of the SEATO (Southeast Asia Treaty Organization) Alliance with the UK, France, New Zealand and Australia in defense of Vietnam against communism. At that time the French and Chinese reconvened the Geneva peace talks; Eisenhower agreed the US would participate only as an observer. After France and the Communists agreed to a partition of Vietnam, Eisenhower rejected the agreement, offering military and economic aid to southern Vietnam.[228] Ambrose argues that Eisenhower, by not participating in the Geneva agreement, had kept the U.S. out of Vietnam; nevertheless, with the formation of SEATO, he had, in the end, put the U.S. back into the conflict.[229]
In late 1954, Gen. J. Lawton Collins was made ambassador to "Free Vietnam" (the term South Vietnam came into use in 1955), effectively elevating the country to sovereign status. 