U.S. lays out its Asia-Pacific plans

by Michael Richardson

The United States has set out more clearly than before how it plans to shape Asia-Pacific security and prosperity in the 21st century. The key question that countries in the region must now decide is the extent to which U.S. terms for long-term engagement with the world’s fastest-growing economic zone fit with their own interests.

Before flying to Indonesia for talks in Bali last week with Asian leaders, U.S. President Barack Obama summarized his approach in an address to Australia’s Parliament in Canberra.

Washington has two broad aims. The first is to seek sustainable security by drawing the U.S., its allies and friends more closely together. The unstated goal is to counterbalance China’s rise and provide a deterrent to its expansive policies in the South China Sea and elsewhere should they involve the use or threat of force, or challenge freedom of navigation and overflight in international waters. Meanwhile, Obama says America will continue its effort to build a cooperative relationship with China.

The second objective of America’s new and more active Asia-Pacific policy is to advance what Obama called “our shared prosperity”, primarily through an enlarged trans-Pacific trade and economic liberalization deal: the Trans-Pacific Partnership (TPP).

The main problem is that neither approach being taken by the U.S., with Japan’s support, appears acceptable to China, a rapidly modernizing military power with the second biggest economy after the U.S.

To maximize its own influence, Beijing wants to promote East Asian economic integration by expanding its free trade agreement with ASEAN, the Association of Southeast Asian Nations, to include South Korea, Japan and possibly other economies in the region.

Ernest Bower, director of the Southeast Asia Program at the Center for Strategic and International Studies in Washington, argues that recent progress on the U.S.-led TPP makes a China-led East Asia economic bloc look less compelling. “The rest of Asia wants to trade with China and to receive its investment and low-cost loans for infrastructure development, but … does not want to be dominated by China,” he wrote.

“Much of Asia also rejects the idea of Chinese governance even in the commercial and economic space — a phenomenon that has been strengthened during the last year and a half as China tested whether it could turn the screws on its Asian neighbors over questions of sovereignty in the South China Sea by leveraging its new economic dominance,” Bower added.

The U.S. is now offering an alternative to a China-centric security and economic future for Asia. However, it is far from certain that enough countries in the region will embrace either the U.S. security plan or the economic engagement plan to make them viable for the long-term.

Obama promised that looming cuts in U.S. defense spending would not “come at the expense of the Asia Pacific.” But doubts remain in the region that the U.S. has the economic strength and political cohesion to follow through on his pledge. China is exploiting this uncertainty.

After Obama announced Nov. 16 that up to 2,500 U.S. Marines would be deployed at an Australian base in Darwin on Indonesia’s southern doorstep, Beijing accused him of escalating military tensions in the region.

Several Southeast Asian countries, including Indonesia and Malaysia, expressed concern that the presence of the marines could fuel mistrust and undermine regional security. Singapore’s Foreign Minister K. Shanmugam explained that ASEAN nations did not want to get “caught between the competing interests” of major powers.

Despite this, U.S. officials said after the East Asia Summit had ended in Bali on Saturday that nearly all 18 leaders present raised concerns about maritime security in the disputed South China Sea, even though Beijing objected.

On the economic front, the TPP is being negotiated between the U.S. and eight other Pacific rim countries: Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam. An outline agreement was unveiled earlier this month and the partners said they would try to finalise the complex negotiations in 2012.

At around the same time, the TPP received a boost when Japan, the world’s third largest economy, announced it would start consultations with countries in the group about joining the negotiations. Two other substantial economies, Canada and Mexico, will do the same.

With the addition of these three, the TPP’s share of global goods exports would grow to 24 percent, from 15 percent, giving the group real weight to attract more Asia-Pacific economies to join. However, involvement of just the three new interested parties is likely to complicate and delay the conclusion of negotiations.

The TPP’s coverage of economic, commercial and regulatory activity is far more comprehensive than the regional integration plan promoted by China, and its entry terms are far more stringent. So the TPP may actually have less appeal to the many countries with vested interests to protect in agriculture and other sensitive sectors of their economies.

The People’s Daily, mouthpiece of the ruling Chinese Communist Party, warned on Nov. 17 that “using a new mechanism of cooperation to replace an existing one will seriously harm the East Asian and the global economy.”

Suggesting that the TPP was designed to exclude and contain China, the Global Times, also published by the People’s Daily, said that if the U.S. wanted a larger membership for the TPP it would need to ease the rules for joining. Otherwise, the paper added, “any Asian cooperation with the absence of Beijing will not have much heft.”

The U.S. will have to work hard to persuade its Asian trading partners that their economic interests are best served by a U.S.-led trans-Pacific deal rather than a China-led East Asian one. If America is to remain embedded in Asia, this is a must-win battle.

Michael Richardson is a visiting senior research fellow at the Institute of South East Asian Studies in Singapore.