Southeast Asian policy makers looking north to the Asian mainland and east across the Pacific see two major assets to their region: China’s biggest-in-the-world economy and America’s best-in-the-world military.
Of course, America is still important to Southeast Asia’s economy: the US and China each imported 10.1 per cent of the total value of ASEAN’s exports in 2009; and accounted for almost identical shares of FDI inflows into ASEAN: 10.8 per cent and 10.4 per cent respectively.
But back in 2003 America took in more than three times the share of ASEAN’s exports absorbed by China — 19 per cent versus 6 per cent. Seen from Southeast Asia, that American advantage over China has since disappeared. From 2003 to 2008, China’s share of all Southeast Asian trade burgeoned at an astonishing average annual pace of 26 per cent.
China’s economic importance to its southern neighbours will only increase as Western economies retrench. Certainly, China will not escape collateral damage if the euro zone implodes and American budget deficits and national debts spiral unchecked. But China could still emerge from such extreme turbulence relatively better off than Europe or America, thus better equipped to cushion the shocks to Southeast Asia.
Southeast Asians are by no means giving up on the American market. But the tendency in Southeast Asia is to think of Beijing and Washington as playing specialised roles: China the economic partner who facilitates prosperity, America the security provider who guards the peace.
Reinforcing this ostensible division of labour is the economic success of China’s preferred regional vehicle, ASEAN+3, which excludes the US, compared with the prominence of security on the evolving agenda of the East Asia Summit (EAS), to which both China and the US belong.
Beijing prefers the East Asia-only ASEAN+3 to the larger EAS where its influence is diluted. China sees ASEAN+3 as a nascent East Asian Community based on trade and investment, a vision ASEAN shares.
Two questions therefore arise: should the economy-focused ASEAN+3 aspire to play a security role? And conversely, should the EAS privilege security alone or should it also develop an economic agenda?
Under present conditions, ASEAN+3 will not enlarge its footprint to encompass traditional security. China has not pressed for such an expansion of ASEAN+3’s terms of reference, and the ASEAN states are too suspicious of Beijing — especially because of its forceful claims over the South China Sea — to go down this road.
In this delicate context, a security focus for the EAS amounts to a hedge against unwanted Chinese assertion. That hedge is still purely symbolic. To the extent that the US credibly underwrites Asia Pacific security, it does so through bilateral, not multilateral, ties, and the EAS to date is little more than an annual conversation.
But could the EAS eventually add the regional economy to regional security as an object of its attention?
Chinese officials did not welcome the formation of the EAS and now appear reluctant to incorporate economic affairs into its terms of reference. Beijing is loath to further empower a vehicle through which the US and its democratic friends outside East Asia (India, Australia and New Zealand also belong to the Summit) could frustrate Chinese goals.
If China is already first among equals within the 13-member ASEAN+3 economies, and is becoming the hub of the global economy, some in Beijing may see in the 18-member EAS the next circle in which to augment Chinese economic influence. But China’s current priority is to grow ASEAN+3 into an East Asian economic community that reflects and projects China’s own comparative advantage.
Like the Hu administration in Beijing, but for very different reasons, the Obama administration is not eager for the EAS to become an economic summit — APEC already is one. And conceivably more important to American policy makers is theTrans-PacificPartnership (TPP). Originally a modest agreement between Brunei, Chile, New Zealand and Singapore in 2005, six more countries — Australia, Malaysia, Peru, the US, Vietnam and now Japan — have agreed to participate in negotiations with a view to joining the group. Canada, the Philippines, South Korea and Taiwan have also expressed interest in signing on.
A juggernaut the TPP is not. The high quality of the agreement helps to explain the low quantity of its members, who must commit themselves to comprehensive economic liberalisation.
But its provisions will be harder to endorse in countries that protect agriculture, repress labour, appropriate technology and resent the costs of ‘greening’ their economies. Its rules on intellectual property are especially controversial. This would matter less if the TPP were content to be a club of the few. But the agreement expressly aims ‘to support the wider liberalisation process in APEC consistent with its goals of free and open trade and investment’ (Article 1.1.3). Linked as the TPP is to APEC, the Obama administration would rather encourage this vanguard role for free trade in a two-track division of labour between the TPP/APEC (economy) and the EAS (security).
President Obama’s visit to Darwin, before attending the Sixth East Asia Summit in Bali, saw the announcement with Australian Prime Minister Julia Gillard that 2500 American marines will eventually be rotated through the north-coastal Australian city every six months or so for exercises and training with the Australian Defence Force. The American contingent will also be available for rapid relief should a natural disaster strike Indonesia, less than 500 miles away.
America is not and does not wish to be seen as a half-super power in Asia, consigned only to a security role, but the Darwin decision has reinforced this association. It has also increased the chance that Washington could be seen as siding with this or that claimant in the dispute over the South China Sea.
In 2008–09 then-Australian Prime Minister Rudd proposed a full-spectrum framework equipped with a summit that could address both economic and political problems. His idea was not well conceived or presented at the time. But the absence of such a venue may be regretted nonetheless, as the latest financial crisis continues to illustrate so painfully the need for transnational coordination and governance reform to speed economic recovery, and the rising role of the Pacific Rim in seeking and sustaining long-term solutions.
The Obama administration deserves credit for having pivoted toward Asia and involving itself adroitly in the multilateral economic and security architecture. Drawdowns in Iraq and Afghanistan should help. So, too, will a more concerted effort to rebalance America’s profile toward greater and more productive economic engagements with Asia./.