America first, geo-economic logic last


April 27, 2017

America first, geo-economic logic last

by Gary Hawke, Victoria University of Wellington

http://www.eastasiaforum.org

Image result for tomahawk over syriaTrumponomics–Military Power over Geo-Economics

The Trump Administration has introduced a new set of challenges to the international economy. It has profoundly changed the role of the United States in international economic diplomacy, ceasing to be a champion of multilateralism.

Within the first 100 days of the Trump administration, reality has overwhelmed a good deal of campaign rhetoric, and individuals experienced and skilled in conventional public management have prevailed over some who epitomised revolt against elites. But ideas that challenge longstanding US positions on the world economy and international integration remain at the core of the Trump administration.

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Get the Message, Theresa May?

Bilateral trade balances have long been known to be an inappropriate policy objective. Yet the Trump administration is pursuing this without any sound argument. Its belief is that only bilaterally balanced trade (or an excess of US exports) is ‘fair trade’. This nonsense is reinforced by concentrating on trade in goods, ignoring surpluses on services trade. And the capital account is ignored entirely.

Trump expands the idea of bilateral balance to the trading relationship with every other country. He insists on what Gary Hufbauer has called ‘mirror-image reciprocity’. Every component of a deal, every individual tariff rate, any provision about rules of origin for specific products, and any condition for foreign investment must be no less favourable for US exporters than the corresponding rule applied to the United States. This is misplaced concreteness has gone mad.

The idea of a win-win overall deal is rejected. The very idea of complementarities between economies is ignored. That this is endorsed by the chair of the newly established National Trade Council Peter Navarro, who holds a Harvard PhD in economics, is a conclusive argument for an enquiry into Harvard standards.

Two of Trump’s executive orders on trade deficits and trade laws would both fail the most elementary of economics examinations.

Under the Trump Administration, history is no more respected than economics. It has been argued that the WTO and its predecessor GATT were intended to apply only to developed economies. Those who were at the Havana conference in the 1940s and those who negotiated with developing economies in the Uruguay Round saw no such belief among their US colleagues.

This is a thin disguise for wishing to continue using subterfuge rather than economic logic in consideration of so-called ‘countervailing duties’ and ‘anti-dumping penalties’ against China. The idea that there is an indisputable definition of a ‘market economy’ is absurd, but then so is the underlying idea of dumping. Artificial lowering of prices with the intention of raising them after forcing a competitor out of business should be countered — if it were ever properly detected.

Even more absurd is the notion that ‘over capacity’ is something that requires government intervention. Consumers gain from cheap products. When producers cannot sustain output levels at such low prices, the appropriate response is for the least efficient producers to exit. In the case of steel, ‘least efficient’ is probably not the same as ‘Chinese’.

Most concerning is an attack on the WTO dispute resolution system. US opposition to it predated the Trump administration. The Obama administration vetoed the reappointment of a judge to the Appellate Body for the little-disguised reason that his decisions were uncongenial.

US resistance to the dispute resolution system has never been far from the surface. It is often rationalised by a constitutional principle that only the US Congress can create laws which bind US citizens. Some US judges can nevertheless make positive use of international reasoning, and previous administrations have recognised that membership of international institutions could require them to persuade Congress to amend US law or to compensate a foreign party.

The language in the final statement of the WTO dispute resolution system is in no way an exemption of the United States from the dispute resolution system. The words of the dispute settlement understanding that a ruling can’t ‘add to or diminish the rights or obligations’ of a member country — relate to member countries’ commitments, not US law, and their interpretation is not a US prerogative.

Rhetoric about a ‘rules-based international order’ or the ‘modern liberal international order’ is now entirely empty when set beside the declared intentions of the Trump administration. Again, the problem is deeper than Trump. No country can be an effective advocate of the rule of law when its partisan politics dominates the choice of its most senior judges. Fundamentally, the United States has to adjust to no longer being able to dominate global affairs.

Economic integration now has to be led by countries other than the United States. But successful integration elsewhere will cause responses within the United States as businesses miss profitable opportunities and as voters see that they are missing out on consumption and employment gains.

Gary Hawke is retired Head of the School of Government and Professor of Economic History, Victoria University of Wellington.

International Finance Ministers Discuss Growth Strategies at The George Washington University


April 26, 2017

International Finance Ministers Discuss Growth Strategies

GW-hosted event, “Growth Strategies in a De-Globalizing World,” brought finance ministers from Colombia, Indonesia and Paraguay.

Finance ministers Mauricio Cárdenas, Sri Mulyani Indrawati and Santiago Peña

Finance Ministers Mauricio Cárdenas, Sri Mulyani Indrawati and Santiago Peña discussed their countries’ growth strategies, including focusing domestically in an uncertain global market. (Logan Werlinger/GW Today)
April 20, 2017

 

https://gwtoday.gwu.edu/international-finance-ministers-discuss-growth-strategies

As the International Monetary Fund and World Bank Group spring meetings loomed, the George Washington University on Wednesday hosted international finance ministers and other experts to discuss the global economic landscape and implications for countries trying to grow in a “de-globalizing” world.

The event—hosted by GW’s Institute for International Economic Policy, GW School of Business and the Growth Dialogue—brought together the current finance ministers from Colombia, Indonesia and Paraguay and was moderated by Danny Leipziger, GW professor of practice of international business and managing director of the Growth Dialogue.

“The world is not in a good place,” Dr. Leipziger said in framing the discussion, adding many “warning signs” show countries’ difficulties with growing their economies, particularly at a time when others, including the U.S., are questioning globalization.

Does that mean that countries’ development strategies need to shift? And if so, how? Many agreed that looking inward is important during times of global uncertainty.

“We have to rely on domestic forces,” said Mauricio Cárdenas, Colombia’s minister of finance and public credit, adding infrastructure and brokering national peace and stability are important factors in growing his country’s economy.

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Sri Mulyani Indrawati of Indonesia

Sri Mulyani Indrawati, Indonesia’s Minister of Finance, added that while increasing revenues is important for a country, so is a good spending plan when every dollar counts. “How you spend it, and how you spend it better, is going to also be very critical,” she said.

Looking at trade inter-regionally could also be an important tactic if engaging with the broader globe is difficult, said Santiago Peña, Paraguay’s minister of finance. Many countries in Asia have been able to do this and have coped better with global changes, he said.

Panelists also said growth worries are compounded by uncertainty surrounding some of the rhetoric and policy actions of the Trump administration with respect to globalization and declarations that certain countries have a trade surplus with the United States.

“I hope that GW is also playing an important role in this location because you have a moral responsibility to continue pushing back the policy trend which is worrying for many countries in the world,” Ms. Indrawati said.

Adam Posen, president of the Peterson Institute for International Economics, had some advice for the finance ministers with respect to engaging with the United States.

“One just has to assume for the next couple of years at a minimum that the U.S. is going to be, at best, a bad actor,” when it comes to trade and other international partnerships, he said.

Image result for the george washington university campus

Thailand: The New King and Politics


April 24, 2017

Thailand: The New King and Politics

by Pavin Chachavalpongpun

http://www.newmandala.org/kingdom-fear-favour/

Image result for New King of Thailand

How is the new monarch of Thailand, Maha Vajiralongkorn, ruling his kingdom since the death of his father, the late King Bhumibol Adulyadej?

FEAR.

The overwhelming success of Bhumibol’s reign has evidently become an entrapment for Vajiralongkorn, who has failed to follow in the footsteps of his much-revered father. Vajiralongkorn is the mirror image of Bhumibol. Based on this assessment, some analysts have expected Vajiralongkorn to be a ‘weak king’, precisely because of his lack of moral authority, divinity and popularity once enjoyed by Bhumibol.

Bhumibol’s moral authority was made a sacred instrument that underpinned his effective reign for seven decades. It legitimised his political position, so as to place it above what were perceived to be ill elements, including ‘dirty’ politics and ‘corrupt’ politicians. Members of the network monarchy had worked indefatigably to ensure the strengthening of his moral authority, through vigorous glorification programs in the media and national education, about the devoted king who strove for his people’s better livelihood. It was his moral authority which was partly exploited to justify the use of the lese-majeste law.

Now that Bhumibol has passed from the scene, a critical question emerges: how has Vajiralongkorn forged new alliances and eliminated enemies and critics in order to consolidate his reign?

Without his own charisma, or baramee, Vajiralongkorn has exercised fear to command those serving him instead of trusting or convincing them to work for him based on love and respect, as argued by a recent article of Claudio Sopranzetti. Vajiralongkorn has used fear to build order, perhaps similar to the way in which mafias, or chaophos, operate their empire.

Vajiralongkorn reigns as a monarch whose authority is based upon fear, and as one who cares little about people around him. Fear is a tool to threaten his subordinates and drive them to the edge to keep them compliant and docile. He has kept his subordinates in line with unnecessary, yet rigid, rules, from professing a cropped haircut style to a tough fitness regime. But such rules possibly reflect Vajiralongkorn’s own state of fear. He does not know who will betray him at the end of the day. His intimidating image is his only source of personal power — but he also realises how fragile it could be.

Even prior to the death of Bhumibol, Vajiralongkorn relied on fear for his own rearrangement of power. He allowed a faction under his control to purge another perceived to be disloyal to him. The cases of Suriyan Sucharitpolwong, or Moh Yong, Police Major Prakrom Warunprapha, and Major General Phisitsak Seniwongse na Ayutthaya — all of whom worked for Vajiralongkorn, most visibly in the ‘Bike for Mum’ project —   reiterated that death could become a reward for those who breached his trust. Each of these individuals were given a nickname. For example, Phisitsak was called by Vajiralongkorn, Mister Heng Rayah (เฮง ระย้า), although exactly why he was named as such remained unknown.

Image result for Thailand's Politics of FearThai Army Chief General Prayuth Chan-ocha calls the shots in Thailand

Within Vajiralongkorn’s palace, Dhaveevatthana, a prison was built. The Ministry of Justice, during the Yingluck administration, announced on 27 March 2013 that a 60 square metre plot of land within Dhaveevathana was allocated for the building of what is now called the Bhudha Monthon Temporary Prison. This ‘temporary’ prison has been legalised, potentially allowing the king to detain anyone under its roof legally. Adjacent to the prison is a crematorium. Major General Phisitsak died inside the prison and was cremated there too.

His former consort, Srirasmi, has been put under house arrest in a Rachaburi house, shaved and dressed as a nun. Her family members and relatives were imprisoned on dubious charges. Pongpat Chayaphan, a former Royal Thai Police officer who was the head of the country’s Central Investigation Bureau, was convicted in 2015 from profiting from a gambling den, violating a forestry-related law, and money laundering. Srirasmi is his niece. Earlier in 2014, Police General Akrawut Limrat, a close aide to Pongpat, was also found dead following a mysterious fall from a building.

Vajiralongkorn’s estranged sons, Juthavachara, Vacharaesorn, Chakriwat and Vatcharawee — who live in exile in the United States with their mother Sujarinee Vivacharawongse, née Yuvathida Polpraserth — have been banned from coming home. These extreme punitive measures reiterated the fact that fear once again functions as a controlling device over his subjects, even those with royal blood.

Image result for Juthavachara, Vacharaesorn, Chakriwat and Vatcharawee — who live in exile in the United States with their mother Sujarinee Vivacharawongse, née Yuvadhida Polpraserth

Vajiralongkorn also reorganised the Privy Council, appointing new faces from the Queen’s Guard, to entrench his alliance with the junta. He has also let General Prem Tinsulanonda remain in his position of President of the Privy Council, arguably, as part of using fear to keep his enemy close to him, so that Prem could be closely monitored and work under his direct command. And recently, he punished one of his close confidants, Police General Jumpol Manmai, a former deputy national police chief, labelling him as the extremely evil official so as to justify the humiliation caused to him. Jumpol was arrested and imprisoned. His head was shaved, like Moh Yong and Prakrom, and was sent to undergo a military training within the Dhaweevattana Palace. Like Pongpat, he was found guilty of forest encroachment.

Meanwhile, some have been promoted, some demoted. Speedy promotions in the military and the police were enjoyed by the king’s new favourites. Those irritating him were thrown out — but before that, they were humiliated on the pages of the newspapers. Vajiralongkorn purged the entire Vajarodaya clan, one of the most prominent families of palace officials serving under Bhumibol. Disathorn Vajarodaya was stripped of his power in the palace, forced to re-enter a military training at the age of 53, and is now working as a house maid who serves drinks to guests of the new king. Meanwhile, Suthida Vajiralongkorn na Ayutthaya, a former Thai Airways air crew, was promoted to the rank of a general. She is currently the number one mistress of Vajiralongkorn. But the life of Suthida is not without competition. Colonel Sineenat Wongvajirapakdi, aka Koi, who is a nurse, is reportedly becoming his number one favourite. A video clip of Vajiralongkorn and Koi, both wearing skimpy crop tops barely covering fake tattoo wandering a Munich mall, was viral on the Internet.

In the political domain, Vajiralongkorn directly meddled in the drafting of the new constitution, requesting an amendment to boost royal powers. The changes included removing the need for him to appoint a regent when he travels overseas. More importantly, a clause that gave power to the constitutional court and other institutions in the event of an unforeseen crisis was removed. But by removing it, the king’s political role was significantly reinforced.

Because of his direct interference in Thai political affairs, it is naïve to assume that Vajiralongkorn is simply a mad king, clueless about running his kingdom. His meddling has unveiled his desire to solidify his power at this critical juncture in politics, forging ties with his allies while deposing his enemies and critics through brutal means.

Fear — for one’s own freedom, or one’s own personal safety — is a key weapon of Vajiralongkorn’s in keeping elites around him in line, alongside the longstanding use of the lese-majeste law to curb public discontentment against him. For instance, the military government chose to punish Jatupat ‘Phai’ Boonpattararaksa for sharing a BBC article on the biography of Vajiralongkorn, underscoring the use of fear to warn the public to stay away from his private life. Jatupat is the only person to be imprisoned for sharing the article.

On the eve of the recent Songkran holidays, the Ministry of Digital Economy and Society released an announcement to forbid the public from following, befriending and sharing content of three critics of the monarchy: myself, the exiled historian Somsak Jeamteerasakul, and former reporter Andrew MacGregor Marshall. Fear has now been ulitised at a national level, in cyberspace, to frighten ordinary social media users. In failing to obey the royal prerogatives, some could be jailed, like Jatupat.

But fear can fall away. Overused and frequently exploited, fear will eventually loose its spell. Exactly how long Vajiralongkorn will continue to count on fear to build up his power remains uncertain. What is certain today is the fact that Thailand is no longer a smiling country. It is a country in deep anxiety.

Pavin Chachavalpongpun is associate professor at Kyoto University’s Center for Southeast Asian Studies.

 

DJT’s Muddled Foreign Policy


April 23, 2017

DJT’s Muddled Foreign Policy: Holding the Free World hostage to Trump’s Oversized Ego

by Dr. Munir Majid

http://www.thestar.com.my

Image result for Trump the egoistic alpha male

DJT: Exploding from the starting blocks only to realise that as President he is in a long distance race to make America Great Again

PRESIDENT Donald J. Trump exploded from the blocks after his inauguration on January 20, but soon found out he was not in a sprint but in a long-distance race.

 

His rapid fire of orders to fulfill promises he made for his first 100 days were not as easy to shoot as he thought. Most notable, of course, were the executive orders on entry into the United States, immigrants and refugees. The way these orders were shot down was one of the most heartening evidences that the liberal system in America was alive and well – not just the laws, but the people willing to fight for others – and that the Trump avalanche could not crush it.

Trump has promised to come roaring back, but not yet. Meanwhile he has moved to the H-1B visa, signing just this week the “Buy American, Hire American” executive order in Wisconsin (where his stunning victory was part of the Rust Belt sweep that propelled him to the White House).

This order could curb the hiring of foreign technical workers and will get government agencies to buy more domestically produced products – all part of his promise to protect American jobs and wages. So there still is this anti-foreign binge, if not quite fulfilled on the alleged security front at least on the economic front, misplaced though it may be to most rational people.

For friends and foes alike, their main concern with the Trump Presidency is his threat to attack the open global trading system, which he claims has been unfair to the United States. His performance on this within these 100 days is mixed and uncertain.

The big overhang was a possible trade war between the United States and China. Though not quite averted, it does not look as if China is going to be slapped with a tariff of 45% or declared a currency manipulator in Trump’s first 100 days, or perhaps even the next.

This was a lightning campaign promise, over which wiser counsel has prevailed. The former was hyperbole of the highest order, and the latter plainly not true. This does not mean, however, that there is no prospect of trade conflict with China or that the Trump Administration has embraced free trade. It is just that some strategy or policy is forming.

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China’s first lady Peng Liyuan with senior Trump adviser Jared Kushner at Trump’s Mar-a-Lago estate

Trump’s summit meeting with Xi Jinping was just a first touch. There may even be trade-offs in the offing: Trump’s much vaunted “art of the deal”, normally called linkage politics.

This mixed and uncertain future is evident in a number of instances. The US Trade Representative office, in its report to Congress in March (while still without its head confirmed), left the part on China unfilled and referred the reader to a previous report under the Obama administration in 2016 which was just a factual rendition of China’s track record that year against its World Trade Organisation (WTO) obligations.

The other parts of the March report – the first on trade policy under the Trump administration – were clear but not trenchant on “America First” and on an emphasis on bilateral rather than multilateral trade arrangements. There were ominous references, however, to the United States not being bound by WTO rulings.

At the G-20 finance ministers meeting in Hamburg, US Treasury secretary Steven Mnuchin insisted there should be no reference in the joint communique to “avoid all forms of protectionism”, which had been an allusion after all G-20 meetings. It would be interesting to see what line Trump would take at the G-20 summit in July, also to be held in Hamburg.

And there is now this notorious list of 16 countries – Malaysia included – with whom the United States has a chronic trade deficit problem, as if the Sword of Damocles hangs over their heads.

Yet Vice-President Mike Spence was this week in Indonesia to reassure Asia on US commitment to its friends and allies in the region. Damage to trade-dependent economies cannot be good commitment, which even a Trump administration must realise.

Just to mix it up even more, the vice-president announced that Trump would be attending the APEC and ASEAN summits in November, something countries in the region were hopeful for but absolutely not sure about.

To boot, this message was conveyed after Mike Spence visited the ASEAN Secretariat in Jakarta, when he further stated the Trump administration would work with Asean on security and freedom of trade in the South China Sea. While there is uncertainty, there are also surprises, not always unpleasant.

The Mike Spence Asia trip was primarily intended to reassure South Korea and Japan, and to warn North Korea which was making everyone excitable with its nuclear weapon adventurism. There is, however, a correlation between economic capacity and defence capability of its allies, which the Trump Administration perhaps is beginning to realise. Enfeebling with trade sanctions is not the best way to boost their confidence or capability in defence.

The assurance, it would seem, would come from the Trump Administration’s willingness to shoot its way out of the troubles it may face, such as those threatened by North Korea.

This is quite dubious foreign policy strategy, as there are a limited number of bush fires that can be fought, especially as some can become overwhelming conflagrations.

The language Mike Spence has been using, like his boss through Twitter rather than based on any strategic doctrine, has been: “Choice today the same as ages past. Security through strength or an uncertain future of weakness and faltering… (America) will always seek peace but under president Trump, the shield stands guard and the sword stands ready.”

No doubt the 59 Tomahawk cruise missiles that hit a Syrian airbase in response to the Assad regime’s callous chemical attack on innocents, is the pointed reference, but surely not the armada that did not appear around North Korea.

Deterrence needs to be credible, absolutely, but easier in some situations, like Syria, and complicated in North Korea where the China factor has to be weighed more carefully than the faraway Russian Syrian interest.

The point is there is a greater complexity in international relations than a one-size-fits-all approach. There is merit in the Trump argument that there has been, in US foreign policy, a perfectionist strategic paralysis. But there is also proof that threat of an all-out action is not sustainable in all situations.

What is observable in the past almost 100 days of the Trump administration is a retreat from quite a number of the US president’s outlandish assertions and policy threats – like blanking out Nato – which have come out more as movement sideways, compensated by direct action which even has some American public intellectuals cooing.

There is still uncertainty. There will be more surprises. But will the Trump new normal be more normal than new?

Tan Sri Munir Majid, chairman of Bank Muamalat and visiting senior fellow at LSE Ideas (Centre for International Affairs, Diplomacy and Strategy), is also chairman of CIMB Asean Research Institute.

Read more at http://www.thestar.com.my/opinion/columnists/comment/2017/04/22/trumps-100-days-and-still-going-wrong/#Zq3eGeO5UEqd53Bp.99

Canada’s Foreign Policy: Middle Power Engagement with Asia-Pacific in Trade and Peace


April 23, 2017

Canada’s Foreign Policy: Middle Power Engagement with Asia-Pacific in Trade and Peace

by Adam P MacDonald

http://www.eastasiaforum.org

Image result for Justin Trudeau

Ever since Washington unveiled its ‘rebalance’ strategy for the Asia Pacific, debate has emerged in Canada over the need for a similar ‘mini-pivot’ towards the region. Despite its large Western coastline, Canada does not self-identify as a Pacific state due to enduring ties to Europe and the Atlantic.

Image result for Trudeau and China's Xi

But East Asia is increasingly the focus of Canada’s efforts to diversify trade partners and secure access to emerging markets. This is exemplified by the 2015 Canada–Korea Free Trade Agreement, China recently becoming Canada’s second largest trading partner, and Ottawa’s support for and participation in the now terminated Trans-Pacific Partnership (TPP) negotiations.

Still, growing economic relations in East Asia have not been accompanied by any sustained political or strategic engagement despite the abundance of security interests of direct relevance for Canada. These interests include promoting global and regional stability amid shifting power configurations, resolving outstanding regional maritime disputes and North Korea’s growing nuclear and missile capabilities (motivating renewed discussions about Ottawa joining Washington’s Ballistic Missile Defence program). East Asian states’ growing interest and involvement in the Arctic — particularly China — is also a source of speculation and debate within Canadian strategic circles.

Successive governments have spoken eloquently of Canada’s long and enduring interests and involvement in East Asia. But Canada’s presence has been sporadic and on a downward slope since its zenith in the mid-1990s. Canadian engagement with the region has been ‘fair-weather’, whereby the degree of participation is not determined by enduring interests but as a function of available resources and the absence of competing foreign policy demands.

But there may be glimpses of a more concerted and sustained Canadian effort to remain regularly engaged with East Asia. Prime Minister Trudeau’s high-profile visits to Japan and China within the first year of his tenure along with the ongoing six-month deployment of two Canadian naval warships to the region are positive signs. Defence officials, in particular, explain the recent deployment as signalling the strategic importance of the region to Canada and as reinforcing a commitment to regional peace and security. Despite the navy’s declining size and capability, major deployments to East Asia are planned for the next two years.

While it is premature to extrapolate any emerging trends from these plans, a number of scholars advocate regular naval deployments for Canada to pursue maritime diplomacy as an ambitious but attainable avenue to achieve staying power in the region. This would also provide in-theatre capability for Canada to conduct a wide spectrum of operations ranging from combat to humanitarian assistance and disaster relief.

But even with the recent comprehensive refit of Canada’s last remaining major class of surface ships and a large-scale shipbuilding strategy to recapitalise the Canadian Navy, Canada’s naval forces will remain highly limited both in numbers and capabilities for the next 10–15 years.

Maritime diplomacy enables and supports but does not in and of itself constitute a regional strategy. While Ottawa is in the midst of a defence policy review largely focused on constructing a fiscal framework for major procurement projects, there appears to be little appetite to conduct a foreign policy review to guide and inform the use of military power in Canada’s international affairs.

Some have voiced aversion to any increased strategic interaction in East Asia, arguing the presence of even a small Canadian naval force will unnecessarily antagonise China and hamper economic relations. It would also put warships at risk in an increasingly tense geopolitical environment, be seen as an unwelcome interference in regional issues, and ultimately as a disjointed venture given the now uncertain trajectory of US regional policy.

Despite some reasonable concerns, Canada should also not avoid the region due to fears of being dragged into a local conflict or that national interests do not warrant such an investment. Canada has direct economic and political ties to the region and has a larger interest as a middle power supportive of a rules-based international system. Canada has also been criticised for too little engagement with the region, not too much. But such a maritime diplomacy strategy also requires Ottawa to acknowledge the reciprocal freedoms of other states to access maritime regions sensitive to Canada, especially the Arctic.

Any augmentation of strategic interactions also presents the challenge of perceptions that Ottawa’s presence is an extension of US policy in the region, especially regarding how military power is employed. While a close ally with the United States and sharing common international interests, Canada is never going to be a major player in the region given its limited ability to project power and influence. Ottawa is ill-suited to adopt similar strategies to Washington in this respect.

Instead, Canada does have an ability to participate in the regional political discourse, especially regarding areas of tension. For example, as an Arctic state, Canada could positively contribute to advising on structures for joint management by competing claimants over disputed areas, such as in the South China Sea. But Ottawa should not confuse a regional strategy with a strategy specifically about this or other disputed areas. Canada must first build and strengthen relations with the region to promote the necessary political conditions to address outstanding territorial and maritime disputes.

Maritime diplomacy is not the only avenue towards increasing relations with East Asia. But it does allow Canadian leaders to signal a visible presence and commitment to the region and creates an impetus for Ottawa to construct a more comprehensive, clear and independent foreign engagement strategy. Whether the recent dispatching of warships is the start of a real determination to shed its fair-weather status is yet to be seen.

Adam P MacDonald is an independent researcher based in Halifax, Canada.

Soothing East Asia’s Nerves–Mike Pence in Asia


April 21, 2017

Soothing East Asia’s Nerves

https://www.stratfor.com

Forecast

  • U.S. Vice President Mike Pence’s 10-day tour of East Asia will focus primarily on easing uncertainty among U.S. allies about the administration’s policies in the region.
  • U.S. moves to contain North Korea and compel China toward cooperation will dominate discussions in Seoul and Tokyo, though tension over the Trump administration’s trade policies will loom large in both visits.
  • Indonesia and Australia will remain wary of joining U.S. initiatives that risk provoking China but also receptive to U.S. efforts to lay the groundwork for more robust defense cooperation.

Analysis

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Nearly 100 days into Donald Trump’s presidency, uncertainty over the direction of U.S. policy and its behavior in the Asia-Pacific continues to pervade the region, including among many of Washington’s most important allies. In particular, between Trump’s early calls for strategic partners such Japan and South Korea to cover more of the costs of supporting U.S. troops on their shores, his decision to withdraw the United States from the 12-nation Trans-Pacific Partnership, and his administration’s recent statements and actions in response to North Korea’s nuclear weapons program, Trump has helped put the typically slow-moving and carefully managed geopolitics of the Asia-Pacific in flux.

In doing so, his administration has arguably opened avenues for progress on issues of longstanding concern to Washington, especially U.S.-China trade relations and North Korean nuclearization. At the same time, the White House’s actions have left countries such as Japan, South Korea and Australia — traditional linchpins of U.S. strategy in the region — looking for greater stability and predictability from Washington.

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US Vice President Mike Pence at The DMZ , South Korea

During his ongoing tour of the region, which started April 15 and will end April 25, U.S. Vice President Mike Pence is seeking to project precisely that: a more stable, predictable and reliable United States. In meetings with heads of state and key lawmakers in South Korea, Japan, Indonesia and Australia, the Vice President will reaffirm Washington’s commitment to stability in the region and the defense of allies and partners against a range of threats, including North Korea, Chinese maritime expansion and terrorism. Likewise, in scheduled “listening sessions” with business leaders from each country — and, in particular, by formally opening the U.S.-Japanese economic dialogue with Japanese Deputy Prime Minister Taro Aso — Pence will seek to address regional concerns over Washington’s trade, investment and currency policies and foreground its continued commitment to regional free trade, albeit through avenues other than multilateral pacts like the Trans-Pacific Partnership. (Notably, on April 18, Pence announced that Washington plans to review and reform the 2007 U.S.-South Korean trade pact.)

To the extent that Pence’s visit is aimed at shoring up Washington’s regional alliances and partnerships, the four stops of his tour share at least one common theme: the goal of countering China’s expanding security footprint in the South and East China seas and, more broadly, to constrain Beijing’s long-term strategy of replacing the United States as the dominant power in East Asia. But each leg of his tour will address a different aspect of this underlying imperative. Like his visit to South Korea on April 16-17, Pence’s subsequent meetings in Tokyo likely will center on managing North Korea’s nuclear weapons development program and, in Japan’s case, checking Chinese maritime activities in the East China Sea. His meetings in Indonesia and Australia from April 20-23, by contrast, will focus on clarifying Washington’s positions on regional trade and South China Sea security, while smoothing over earlier bumps in relations (in Australia’s case) and offering increased defense support both for maritime and counter-terrorism activities (in Indonesia’s case).

Pence’s Seoul Visit and the North Korean Nuclear Quagmire

Given the visibility and significance of mounting tensions on the Korean Peninsula, it is no surprise that South Korea was the first stop on Pence’s tour. His visit, which comes just ahead of the expected arrival in Northeast Asian waters of the USS Carl Vinson carrier strike group and, more significantly, the North’s ballistic missile test on April 15 — the 105th anniversary of the birth of North Korean founder Kim Il Sung — sought to reaffirm U.S. defense support for South Korea and signal Washington’s willingness to take unilateral military action against the North if diplomacy fails. Such moves are aimed as much at compelling China to step up its own efforts to coerce North Korea as at deterring Pyongyang itself from conducting further nuclear or missile tests. Last week, the semiofficial Chinese news outlet Global Times said China would cut off oil supplies to the North (one of Beijing’s most effective tools of leverage over the Kim government) if Pyongyang conducted additional nuclear tests.

But while China’s tacit announcement, followed with a phone call between Trump and Chinese President Xi Jinping, signal burgeoning cooperation, however limited, between Washington and Beijing on North Korea, the situation on the peninsula is highly fraught and fluid. In particular, it remains to be seen whether the United States can compel China to throw its full diplomatic weight behind the effort to halt North Korea’s nuclear weapons program. It is also unclear whether China possesses sufficient leverage to compel the North to meaningfully change its behavior.

Washington’s ability to nudge Beijing toward action depends on a number of factors — in particular, what measures the White House has asked the Chinese to take toward Pyongyang and the extent to which Beijing, given its own geopolitical constraints and often countervailing interests, can or is willing to intervene. The Trump administration’s threats to use military force against Pyongyang and its expected positioning of the carrier strike group near the peninsula are likely intended to undercut China’s capacity to parlay its leverage on North Korea into concessions from Washington on other issues. The U.S. moves also raise the direct costs for China of continued intransigence on negotiations with Pyongyang. The prospect of an even greater U.S. defense footprint in South Korea and Japan is deeply worrisome for Beijing, independent of what happens to North Korea. China’s recent statements suggest that Washington’s actions have had some effect. Even so, it is questionable whether any action China takes against North Korea, short of completely cutting off the latter’s economic lifelines, will deter Pyongyang from pursuing a functional nuclear deterrent. In fact, punitive actions by Beijing and increased saber rattling by the United States may only accelerate the North’s nuclear weapons development efforts.

Against this backdrop, Pence’s visit to Seoul served primarily as an opportunity to reaffirm Washington’s commitment to the South’s security and, to that end, to shore up political support within South Korea for rapid deployment of the Terminal High Altitude Area Defense (THAAD) missile defense system in the face of Chinese economic retaliation. The emphasis on the reliability of U.S. support will carry over into Pence’s visit to Japan from April 18-21. But unlike in South Korea, where Washington must carefully weigh its options against the risks and costs of retaliation by China or further provocations by North Korea, the United States faces fewer such constraints in Japan.

Reflecting the approach of U.S. Defense Secretary James Mattis during his February visit to Tokyo, Pence will use his time in Japan to emphasize the importance of the U.S.-Japanese alliance as foundational to regional stability. In addition, he may urge Tokyo to take on a more prominent and proactive role in maintaining security in the East and South China seas and discuss avenues for future U.S.-Japanese defense cooperation.

Looking South: Indonesia and Australia

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US Vice President Mike Pence and his family were taken on a tour of Istiqlal, Indonesia’s biggest mosque, in Jakarta © POOL/AFP / Adek BERRY–Indonesia is a truly moderate Islamic country.

Pence’s discussions on Japan’s expanding diplomatic and security roles in Southeast Asia and the South China Sea will pave the way for the second half of his trip.

Conspicuously, Pence is not visiting Thailand or the Philippines, the United States’ two treaty allies in Southeast Asia, but which have both been tilting slightly toward China. Nor is Pence visiting Vietnam or Malaysia, two parties to the dispute with China over the South China Sea with which the Barack Obama administration was keen to enhance defense ties. What the decision to steer clear of the front lines of the South China Sea dispute signals, if anything, is difficult to say, though the Trump administration appears to be relying increasingly on Japan’s growing influence in these countries to further U.S. regional goals.

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Vice President  Mike Pence seen with Indonesia’s President Jokowi Widodo gives Malaysia a pass?

But Indonesia and Australia are increasingly pivotal players in the Western Pacific in their own right. In Jakarta, Pence will urge an inward-focused government to embrace the country’s potential role as a regional counterweight to China, a unifying voice within the Association of Southeast Asian Nations (ASEAN), and a robust check on sources of maritime insecurity. And in Australia, a steadfast treaty ally of the United States, Pence will focus on smoothing over lingering uncertainties about the Trump administration’s commitment to maintaining the U.S.-led economic and security architecture in the Western Pacific — doubts magnified by the famously rocky start to Trump’s relationship with Australian Prime Minister Malcolm Turnbull. In particular, Pence will seek to build on the momentum of his lengthy, reportedly fruitful talks with Australian Foreign Minister Julie Bishop during her trip to Washington in February.

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Australian Minister for Foreign Affairs Julie Bishop meets with US Vice President Mike Pence at the White House in Washington. Picture: Yuri Gripas

One important difference between Japan on one hand, and Indonesia and Australia on the other, is that where Tokyo possesses the requisite economic, diplomatic and military power to chart a strategic course openly at odds with Chinese interests, Jakarta and Canberra depend heavily on China for investment and as a market for their raw materials and finished goods. Indonesia and Australia’s interests in maintaining stable, close ties with Beijing will limit their ability and desire to throw their full weight behind U.S.-led efforts to check Chinese actions in the South China Sea.

In fact, though the United States and Indonesia have ample room for cooperation on issues such as counterterrorism, Jakarta remains exceedingly reluctant to entangle itself in regional disputes, and bilateral defense ties are relatively underdeveloped because of past U.S. sanctions over the military’s human rights abuses. (Jakarta’s deep suspicions about Canberra’s strategic intentions have also hindered development of Australian-Indonesian defense cooperation, despite a recent warming of ties.) Meanwhile, entrenched protectionist forces at home limit Indonesia’s ability to diversify its trade relationships and expand its economic influence in Southeast Asia. Australia, for its part, has a geopolitical imperative to ally itself with the world’s foremost naval power, but it, too, remains wary of provoking China, for example by joining U.S. “freedom of navigation operations” aimed at discrediting Chinese territorial claims in the South China Sea.

Even so, both countries have powerful incentives to keep the United States close. Though not directly involved in maritime territorial disputes in the South China Sea, Australia relies on global sea lines of communication — and the freedom of navigation through them afforded by U.S. protection — as the bedrock of its export-intensive economy. Indonesia, for its part, has stepped up efforts in recent years to defend its territorial claims in areas such as the Natuna Islands against China, as well as Malaysia and Vietnam. For Jakarta, substantially stronger defense ties with the one country capable of enforcing rules and checking Chinese expansionism in the region would be critical in a crisis.

Overall, Pence’s Asia tour is unlikely to bring major policy breakthroughs. Rather, the aim of his visits is to reaffirm the fundamental continuity of U.S. power in the Asia-Pacific and to communicate that while the ways in which Washington wields its power may be subject to modification under the Trump administration, that power and influence will not diminish.