Commentary / Japan

Shifting into the era of the Indo-Pacific

by Stephen R. Nagy

The term Free and Open Indo-Pacific (FOIP) has garnered momentum in capitals and regions around the world, including Tokyo, Ottawa, Canberra, Washington and ASEAN. Japan has a Free and Open Indo-Pacific vision, Washington has an Indo-Pacific strategy, Canberra has developed an Indo-Pacific concept and ASEAN has the Indo-Pacific outlook.

Why are so many countries focusing on the Indo-Pacific region and what does it mean for trade and security cooperation in this region of emerging centrality?

On Monday, regional experts gathered at the Canadian Embassy in Tokyo to discuss these issues in a symposium called “Free and Open Indo-Pacific (FOIP): Enhancing Middle Power Cooperation & Coordination.”

The composition of the Indo-Pacific region itself is under debate. Japan sees it as encompassing all of the Pacific and Indian oceans, stretching to the east coast of Africa. The United States, in contrast, has a less expansive view, seeing the region as book-ended by the Pacific and the Indian oceans. Australia, the only state geographically in both the Indian and Pacific oceans, makes the case for its Indo-Pacific boundaries based on geography. Others such as Canada, the United Kingdom, South Korea and European Union countries are still wavering as to how they conceive the region.

China is an outlier, preferring to use the traditional term “Asia-Pacific” or “Asia-Indo-Pacific” to ensure that China remains at the core of any new geopolitical construction. It is also in a conundrum in that its signature and unilateral Belt and Road initiative (BRI) is juxtaposed in direct opposition to the multilateral Indo-Pacific visions being promoted.

Whereas there are divergences in how many states understand the geographic scope of the region, there is broad agreement that the Indo-Pacific region needs to be the focus of policymakers as it will be the center of the global economy.

Importantly, the region will also be home to the most populated countries (China, India and Indonesia), destabilizing security and environmental challenges, and a competition for what rules will mediate trade, maritime behavior and how states behave toward each other.

Examining the region through the lens of current and future trade agreements, the Indo-Pacific region hosts several important trade agreements and forthcoming trade agreements including the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) and potentially the Regional Comprehensive Economic Partnership (RCEP). While the former has come into effect and the later still undergoing negotiation, the consensus at the FOIP event at the Canadian Embassy was that both agreements should be a platform for further economic integration of the region.

Likely candidates for RCEP in the future are Sri Lanka and Bangladesh to ensure that the benefits of trade are regionwide and locked in. Similarly, the CPTPP has numerous potential candidates such as South Korea, Thailand and even China if appropriate reforms are undertaken to meet the pact’s high environmental and labor standards, limitations to state-owned enterprises and protection for intellectual property rights.

Cementing and enlarging these trade agreements are seen as an important pillar of any FOIP vision for the Indo-Pacific, because without trade and economic prosperity many of the states in the region will not develop stability or sustainability.

Along with trade as a key pillar of any Indo-Pacific vision, infrastructure and connectivity were also identified as important components of a successful and sustainable regional vision. Infrastructure and connectivity doesn’t just mean ports, bridges and roads but digital connectivity as well. Through digital connectivity, citizens in the region cannot only participate and benefit from the digital economy but also can access the internet for information and education, and find global solutions to local developmental challenges.

A growing consensus is emerging that any infrastructure and connectivity project must be transparent and fiscally and environmental sustainable.

The Partnership on Sustainable Connectivity and Quality Infrastructure between the European Union and Japan and the Australia-Japan-United States Trilateral Infrastructure Partnership exemplify these principles.

The infrastructure heavy hitters such as Japan are seen by many states as the gold standard. Notwithstanding, the BRI’s cost advantage and less stringent standards offer an alternative to many developing states and states that prefer to accept development aid in the form of infrastructure without ties.

Participants at the FOIP event, especially those from mid-size nations with less experience and capacity to engage in large-scale infrastructure, are interested in contributing to infrastructure development in the region. The question is how?

Here I suggest that middle powers should focus on the capabilities they can bring to infrastructure rather than just capacity. They don’t necessarily have to bring raw materials and construction equipment to the region. Instead, as one participant mentioned, they can “flood the region with lawyers and accountants” to identify fiscally sustainability infrastructure projects to initiate.

Middle powers can also engage in human capacity building in the areas of good governance, rule of law and soft skills to contribute to the skills necessary to maintain infrastructure once the builders return to their home countries.

The third area of convergence in terms of rationale for the necessity to think about the Indo-Pacific region is related to security issues associated with states in the region and security issues that will likely emerge as the effects of climate change become more severe.

Security issues remain diverse in the region. We have North Korea acquiring nuclear weapons and now regularly testing missile systems that are highly threatening to many states in the region. Pivoting to the East China Sea and South China Sea, we have China challenging Japan’s control over the Senkaku Islands by sending merchant ships into Japan’s exclusive economic zone. In the South China Sea, China has ignored international rulings and built artificial and now militarized islands. ASEAN’s unity is being fractured by outside powers making it increasingly difficult to forge a consensus on important issues facing the region such as a code of conduct for the South China Sea. Last but not least, U.S.-China strategic competition in the region is putting states in the region in the position of choosing their economic partner over their security and comprehensive partner.

In dealing with the security challenges facing the Indo-Pacific, one participant at the FOIP symposium adroitly pointed out that by not pushing back against states that do not obey international law, or states that are engaged in assertive, revisionist behavior, we are contributing to a Machiavellian world of “might makes right.”

Middle powers alongside their traditional ally the U.S. must cooperate to send the strongest signal to revisionist powers that rules-based behavior will never by supplanted by force. To do this, middle powers must collectively voice their concerns but also collectively act to build a rules-based order.

Signaling could take the form of jointly building maritime awareness capabilities, joint humanitarian and disaster relief exercises and joint transits in contested areas. Middle powers should also work together to build the capacity of states in the region in activities such as interoperability and human capacity building. Without a unified critical mass of aligned states, the region’s current rules-based order may give way to a “might is right” region that would have hugely negative consequences for the region’s development.

More long term in nature, climate change will be heavily destabilizing to the Mekong Delta, Bangladesh, the Pacific islands and parts of India. Rising sea levels will affect food security and the livelihoods of millions. It will also come with uncountable refugees, fueling extremism as millions are displaced. This long-term challenge to the Indo-Pacific is why any regional vision will have to include China. It will only be through the collective capacities of all states that the region’s sustainable peaceful development can be secured.

With that in mind, the Indo-Pacific era should not and must not be defined by the U.S.-China strategic competition. Middle powers must chart out a positive-sum approach to contributing to the Indo-Pacific region’s development and to moderating and even mediating the strategic competition between the U.S. and China.

Stephen R. Nagy (@nagystephen1) is a senior associate professor at the International Christian University and a visiting fellow with the Japan Institute for International Affairs.

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