East-Asian Regionalism — A Bulwark Against a “Post-Liberal” International Order?


November 18, 2017

East-Asian Regionalism — A Bulwark Against a “Post-Liberal” International Order?

http://www.jpi.or.kr/eng/regular/policy_view.sky?code=EnOther&id=5325–www.eastasiaforum.org

By  See Seng Tan (RSIS, Nanyang Technological University)

In his January 2017 address to the World Economic Forum in Davos, Switzerland, Chinese President Xi Jinping positioned himself—unusually for the leader of Communist China—as a defender of globalization and free trade. Without a doubt, Xi’s remarks were directed at incoming US President Donald Trump, whose campaign rhetoric stressed resistance to globalization and promised the likelihood of an increasingly nationalist, isolationist, and protectionist America. Trump is not alone in wanting to reverse the tide of globalization the current pro-Brexit UK government has been singing a similar tune.

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This paper makes three interrelated points. First, the rising nationalist cum protectionist tide in the West is not a foregone conclusion due to mitigating factors that impel the great powers to cooperate, if only instrumentally and in the short term. Second, the history of East Asia from the Cold War to the present has been one where an emphasis on the preservation and protection of neutrality has given way in the post-Cold War period to so-called open regionalism, a broad-based preference for extensive and deep engagement with external powers and access to outside markets and resources. Third, East Asia’s shared commitment to open regionalism makes East Asian Regionalism, despite the present uncertainty surrounding regional trade deals like the Trans-Pacific Partnership (TPP) and the Regional Comprehensive Economic Partnership (RCEP), an important counter-narrative and alternative model to the isolationist and protectionist zeitgeist.

Is the World Turning Protectionist?

Should Trump and other anti-globalists have their way, how might their behavior impact the liberal international economic order? According to a Brookings Institution report, despite holding the largest share of world trade and foreign capital, the US, relative to its size, is not as globally integrated as other countries.1) What could prove detrimental, however, is if other countries retaliate against US protectionist policies this fact serves as the basis for concerns that Trump could precipitate a trade war. Yet while retaliatory trade behavior might only be a short-term issue, the more fundamental risk is if countries repudiate global norms and institutions that underpin the globalized economy. This is possible if they feel that the US is no longer committed to upholding the liberal economic order and shouldering its burden—a worry that predates the Trump presidency but has since been reinforced by it.2)

Additionally, there is concern whether China, despite President Xi’s performance at Davos 2017, will honor the commitments it has made. These include accepting imported manufactured products and services as well as fully implementing TRIPS (the Agreement on Trade-Related Aspects of Intellectual Property Rights) as China promised to do when it joined the World Trade Organization (WTO) in 2001.3) Finally, there is also concern about various types of “covert” protectionism (i.e., the so-called behind-the-border barriers) rampant in China and other emerging markets that are challenging to address.4)

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Recent developments suggest that Trump has been forced by unanticipated events to delay or defer the pursuit of his anti-liberal agenda. The Trump administration has made a series of abrupt reversals in foreign policy, such as revising his earlier opinions about NATO, US involvement in Syria, burden sharing by US allies, the One China policy, US involvement in the South China Sea, and the US Export-Import Bank. It has also retreated from intended protectionist moves toward China because Chinese cooperation is sorely needed to manage a recalcitrant North Korea. Consequently, Trump has gone from accusing China of being the “grand champion” of currency manipulation to declaring they have not manipulated the China’s currency in months. Additionally, since initially proposing a 45 percent tariff on Chinese goods for allegedly hollowing out US manufacturing, the administration has gone quiet (whilst at the same time threatening to impose a 20 percent tariff on Canadian lumber). Crucially, Trump has also expressed strong support for bilateral free trade deals.5)

Whether this retreat from protectionism and isolationism is a temporary or expedient move remains to be seen. After all, there is evidence to suggest that, despite these reversals toward what some observers see as a more traditional US foreign policy,6) Trump appears to persist in his preference for transactional approaches.7) This was apparent during the Trump-Xi summit, where both leaders reportedly deliberated with “a cold calculation of interests” as they mutually exacted concessions from one another while still acknowledging their interdependence.8) In other words, the reversals merely reflect the Trump administration‟s pragmatic response to evolving international conditions that require corresponding changes in reciprocity. These are the quid pro quos that embody transactional diplomacy. Still, by acknowledging mutual dependence, even if only on a transactional basis, a slide towards full-blown protectionism and unadulterated solipsism has been kept at bay.9)

East Asia: From “Neutrality” to “Open Regionalism”

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A More Engaged and Assertive Japan under Prime Minister Shinzo Abe

It is worth noting that the emergence and evolution of East Asian Regionalism (EAR) did not occur outside the liberal international order but within it. If anything, EAR has sought to complement rather than compete against liberalism. When former Malaysian Premier Mahathir bin Mohamad’s idea of an East Asian Economic Grouping (EAEG)—later amended to an East Asian Economic Caucus (EAEC)—was proposed in 1990, the assumption then was that the EAEG/EAEC would form a Japan-led regional bloc that could serve as a counterweight to emerging—and potentially rival—regionalisms in Europe (such as the European Union, or EU) and North America (such as the North American Free Trade Area, or NAFTA). However, EAR would take a back seat to Asia-Pacific regionalism with the formation of the ASEAN Regional Forum (ARF) in 1994. Together with the earlier formation of the Asia-Pacific Economic Cooperation (APEC) trade forum, the emergence of ARF—with ASEAN as first its midwife and subsequently its anointed custodian—marked a strategic shift in the way ASEAN viewed the involvement of great and regional powers within Southeast Asia. For the ASEAN countries, the Cold War perspective of the great powers as outsiders seeking to intervene, exploit, and divide the region and who therefore must be checked—as embodied in the 1971 ASEAN declaration of the Zone of Peace, Freedom and Neutrality (ZOPFAN)—was gradually replaced by a post-Cold War perspective of those same powers as external actors with whom Southeast Asians ought to actively engage through multilateral diplomacy, among other means.

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Cambodia and China–Strategic Partners in Development

Far from exclusivist, the new regionalism that emerged in the early post-Cold War years in the Asia-Pacific is what some have termed open regionalism. This concept argues for cooperation across national borders in a region to reduce transaction costs through the collective involvement of governments in “trade facilitation,” or the expansion of open trade.10)

Second, open regionalism is meant to be inclusive in that it seeks to incorporate outside powers such as the US and other eastern Pacific Rim countries into APEC and ARF.11) Belief in such inclusivism—coupled with the perceived need to construct a stable regional balance of power by including outside groups to counter possible hegemonic ambitions—led to a push to enlarge the membership of the East Asia Summit (EAS) to include countries beyond the 10+3 of ASEAN plus Three (APT).12)

Third, open regionalism encourages groups to make their enterprises compatible with institutional arrangements and practices in other parts of the world, including world bodies. For example, the architects of ARF made it clear that the forum is not meant to replace the San Francisco system of military alliances. Instead, it serves as a supplementary mechanism for dialogue and consultation. Likewise with the Chiang Mai Initiative (CMI) reserve currency pool, an institutional expression of EAR and APT, was launched against the backof the crippling Asian financial crisis of the late 1990s. Speculations that the CMI—along with its multilateral component, the CMI Multilateralization (CMIM)—would surpass the International Monetary Fund (IMF) as the region‟s first port of call for financial assistance in times of crisis were put to rest when it became clear that regional countries either prefer IMF assistance or bilateral swap agreements that had no IMF links.13)

This is also evident in how ASEAN and its suite of regional offshoots have avoided asserting themselves as the region‟s savior organizations when troubles hit by limiting their aim and remit. As in the case of the CMI/CMIM, Asian countries involved in territorial disputes have looked to world bodies such as the Hague-based International Court of Justice (ICJ)—as in the cases of the Indonesia-Malaysia dispute over Sipadan and Ligitan, the Malaysia-Singapore dispute over Pedra Branca, and the Cambodia-Thailand disputes over Preah Vihear and its promontory—the Hamburg-based International Tribunal for the Law of the Sea (ITLOS), or the Hague-based Permanent Court of Arbitration (PCA) for UNCLOS Annex VII arbitrations—activated recently in the case of the China-Philippines dispute over the South China Sea (SCS). Alternatively, they rely on bilateral means of dispute settlement rather than ASEAN-based dispute settlement mechanisms.14)

Reinforcing the Liberal Message Though EAR

Since the knee-jerk reactions in the immediate aftermath of the US withdrawal from the TPP—in particular, Japan’s insistence that a TPP without the US would be “meaningless”—Australia and Japan have emerged as the loudest voices in favor of an 11-member TPP trade deal sans the US, without ruling out the possibility of the latter’s return to the fold.15) Meanwhile some are hoping that RCEP will launch by the end of 2017, though the best possible outcome is likely to be a framework agreement.16) Much was made at the RCEP Kobe meeting in February 2017 about an inclusive agreement that ensures roles for all stakeholders. The argument by RCEP Trade Negotiating Committee Chief Iman Pambagyo, for example, that RCEP balance the needs of both developed and developing nations implies that progress is likely to be slow and by no means guaranteed.17) APEC supports a third trade pact, the Free Trade Area of the Asia-Pacific (FTAAP), but it remains at the consultative stage despite receiving strong support from China when it chaired the 2014 APEC summit.18)

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Open regionalism inherently and intuitively liberalizes trade and refutes protectionism. Or it tries to. Despite the uncertainty surrounding TPP-11 and RCEP, they remain key reference points for any defense of trade liberalization. There is a longstanding debate over whether regional trade agreements compete with the world trade system.19) But, as we have seen, the ways in which open regionalism has hitherto been conceptualized and practiced in both the economic and security domains in East Asia render EAR a key political counterpoint to the anti-globalization fever that has seized the geo-economic cum geopolitical imaginations of the West. This is perhaps the most important role that EAR can and hopefully will play in the future, namely, as a bulwark against the anti-globalization tide through reinforcement of a liberal message.

Footnotes:

1) Brina Seideland Laurence Chandy, “Donald Trump and the future of globalization”, Brookings, 18 November 2016,
https://www.brookings.edu/blog/up-front/2016/11/18/donald-trump-and-the-future-of-globalization/
2) Kati Suominen, Peerless and Periled: The Paradox of American Leadership in the World Economic Order (Stanford, CA: Stanford University Press, 2012), p. 243.
3) Douglas Bulloch, “Protectionism May Be Rising Around The World, But In China It Never Went Away”, Forbes, 12 October 2016,
https://www.forbes.com/sites/douglasbulloch/2016/10/12/protectionism-may-be-rising-around-the-world-but-in-china-it-never-went-away/#359ae9bc73da
4) “Protectionism: The Hidden Persuaders”, The Economist, 12 October 2013,
http://www.economist.com/news/special-report/21587381-protectionism-can-take-many-forms-not-all-them-obvious-hidden-persuaders
5) Geoffrey Gertz, “What will Trump‟s embrace of bilateralism mean for America‟s trade partners?” Brookings, 8 February 2017,
https://www.brookings.edu/blog/future-development/2017/02/08/what-will-trumps-embrace-of-bilateralism-mean-for-americas-trade-partners/
6) David Ignatius, “Trump moves slightly toward pillars of traditional foreign policy”, USA Today, 13 April 2017,
https://www.usatoday.com/story/opinion/columnists/2017/04/13/trump-moves-slightly-toward-pillars-traditional-foreign-policy/100413776/
7) Greg Jaffe and Joshua Partlow, “Trump phone calls signal a new transactional approach to allies and neighbors”, The Washington Post, 2 February 2017,
https://www.washingtonpost.com/world/national-security/trump-phone-calls-signals-a-new-transactional-approach-to-allies-and-neighbors/2017/02/02/dcb797fa-e989-11e6-b82f-687d6e6a3e7c_story.html?utm_term=.97755b835303
8) Lexington, “A coldly transactional China policy: Donald Trump‟s first meeting with Xi Jinping was all about business”, The Economist, 8 April 2017,
http://www.economist.com/blogs/democracyinamerica/2017/04/coldly-transactional-china-policy
9) Robert Kagan, “Trump marks the end of America as world‟s „indispensable nation‟”, The Financial Times, 20 November 2016, https://www.ft.com/content/782381b6-ad91-11e6-ba7d-76378e4fef24
10) Ross Garnaut, Open Regionalism and Trade Liberalization: An Asia-Pacific Contribution to the World Trade System (Singapore: ISEAS Yusof Ishak, 1996).
11) Amitav Acharya, “Ideas, Identity, and Institution-building: From the „ASEAN Way‟ to the „Asia-Pacific Way‟?”, The Pacific Review, Vol. 10, No. 3 (1997), pp. 319-346.
12) Malcolm Cook and Nick Bisley, “Contested Asia and the East Asia Summit”, ISEAS Perspective, No. 46, 18 August 2016.
13) Hal Hill and Jayant Menon, “Asia‟s new financial safety net: Is the Chiang Mai Initiative designed not to be used?”, Vox, 25 July 2012, http://voxeu.org/article/chiang-mai-initiative-designed-not-be-used
14) See Seng Tan, “The Institutionalisation of Dispute Settlements in Southeast Asia: The Legitimacy of the Association of Southeast Asian Nations in De-securitising Trade and Territorial Disputes”, in Hitoshi Nasu and Kim Rubenstein, eds., Legal Perspectives on Security Institutions (Cambridge: Cambridge University Press, 2015), pp. 248-266.
15) WSim, “Australia, Japan lobby for TPP-11”, The Straits Times, 21 April 2017, http://www.straitstimes.com/asia/east-asia/australia-japan-lobby-for-tpp-11 “’TPP 11′ to Washington: We’ll keep your seat warm”, Nikkei Review, 16 May 2017,
http://asia.nikkei.com/Politics-Economy/International-Relations/TPP-11-to-Washington-We-ll-keep-your-seat-warm
16) Shefali Rekhi, “Will RCEP be a reality by the end of 2017?” The Straits Times, 23 April 2017,
http://www.straitstimes.com/asia/se-asia/will-rcep-be-a-reality-by-the-end-of-2017
17) Eric Johnston, “16-nation RCEP talks resume in wake of TPP‟s demise”, The Japan Times, 27 February 2017,
http://www.japantimes.co.jp/news/2017/02/27/business/16-nation-rcep-talks-resume-wake-tpps-demise/#.WR1RaU21v3g
18) Mireya Solís, “China flexes its muscles at APEC with the revival of FTAAP”, East Asia Forum, 24 November 2014.
19) Parthapratim Pal, “Regional Trade Agreements in a Multilateral Trade Regime: A Survey of Recent Issues”, Foreign Trade Review, Vol. 40, No. 1 (2005), pp. 27-48.

* This is a presentation manuscript in the panel “Regionalism After Liberalism”, Jeju Forum, 31 May 2017.

The Belt and Road Initiative and Asia’s changing order


November 18, 2017

The Belt and Road Initiative and Asia’s changing order

by Nick Bisley, La Trobe University

In the two days of meetings from 8 November between President Donald Trump and President Xi Jinping in Beijing on Trump’s first state visit, it appears that they did not talk at all about the Belt and Road Initiative (BRI). Trump’s tour reflected the tendency of his administration to see Asia entirely through the lens of bilateral ties and crises. US Secretary of State Rex Tillerson and Trump have stated that the United States seeks to sustain and protect a free and open Indo-Pacific, but the inability to match that concept with either a meaningful strategic vision or substantive policy was plainly on display.

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This absence of strategic thinking about the region is a key reason for the neglect of China’s BRI. It is a policy that is monumental in scale, highly strategic in its outlook and reflects Xi’s confident and ambitious vision of China’s global role. If the United States and its allies want to maintain the underlying economic and strategic status quo in Asia, they need to recognise that they will be doing so at the same time that China is forging ahead with its BRI plans.

The initiative was first announced in a pair of speeches given by Xi in 2013 in Kazakhstan and Bandung, setting out a sweeping but vague vision for improved connectivity between China and the former Silk Road Corridor. At the recent 19th National Congress of the Chinese Communist Party (CCP), the initiative was written into the party’s constitution. It is without question the most important element in China’s international policy.

At its core, the BRI is about the practical business of connecting peoples and markets through infrastructure. But it also has at least five different strategic functions.

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Perhaps the most immediate of these is that it is a means to drive economic growth in China’s deprived southern and western provinces. The aim is both to reduce the huge economic inequalities between the Chinese hinterlands and the coast and to provide a social developmental anchor for parts of China that the CCP has long seen as restive and resistant to Beijing rule. A more prosperous Xinjiang is, from this view, less likely to be susceptible to the allure of ‘terrorism and separatism’.

But huge investment in infrastructure is not just about leveling out economic prospects within China: the initiative also aims to improve economic development prospects in China’s western periphery. The China–Pakistan Economic Corridor — a sprawling program of pipelines, dams and development projects in Pakistan — is not so much about bringing hydrocarbons from the Arabian Sea to Xinjiang. Rather, it is about improving Pakistan’s welfare. A well-off Pakistan is a better market for Chinese goods, a more reliable partner to balance Indian influence and is less likely to be a source of radical Islamist inspiration. That the economic improvement among China’s neighbours would also align those countries’ interests with Beijing’s is an added bonus.

This will also help create more developed markets to consume the higher-end manufactured goods that China’s economic reformers aim to create. Importantly, as those markets  along the Belt and Road are developed they are also intended to have Chinese industrial standards to become internationalised, further entrenching China’s economic advantage. As the United States knows, countries that build infrastructure also set the standards.

A fourth motive — and perhaps one that has been the most prominent in the minds of China hawks — is the BRI’s geopolitics. China’s dependence on its maritime approaches and their vulnerability to US power has long been a source of concern for the Party leadership. The US navy’s submarine fleet is likely to ensure that even if China were to ‘leapfrog’ aircraft carrier development, the country would remain susceptible to US naval predation. By pivoting west and being able to access markets via continental means, China can overcome the maritime choke points that create submarine vulnerability, thereby gaining much needed strategic depth.

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Finally, in developing the BRI’s US$1 trillion infrastructure program that binds states and economies into a China-centred economic and strategic system, China is aiming to weaken existing strategic and institutional structures. In short, the BRI is a crucial part of China’s incremental and non-threatening construction of a new regional order. The symbolism could not be clearer from Beijing: we are building bridges, ports and pipelines while you, the United States, are building walls.

More than 60 countries have signed memorandums of understanding with China about the BRI, yet many others (particularly those close to the United States) remain sceptical. Australia seems genuinely perplexed as to how to respond, while Japan’s recent cautious approval is the public face of a very sceptical Japanese government. This uncertainty is understandable.

From a US ally point of view, the BRI is a genuinely puzzling program. The region badly needs infrastructure investment and China has the capital, experience and capability to drive this forward. But the initiative will almost certainly increase China’s relative strength and further erode the old regional order. As a project in which the geopolitical cannot be disentangled from the economic, it also frustrates more conventional approaches to international policy.

The BRI’s close association with President Xi means that it is going to be the most important component of China’s international policy over the coming decade. Equally, as it unfolds it will significantly alter strategic and economic relationships in the region. More broadly, the BRI reflects an ambition to fill in the missing piece of the connectivity puzzle that will create a more China-centred regional order. The question is whether the United States will contest China’s efforts or be too busy with its own travails to even realise that there is a competition. If Trump’s first nine months in office are any indication, China has the field wide open.

Nick Bisley is Executive Director of La Trobe Asia and Professor of International Relations at La Trobe University. You can follow him on Twitter at @NickBisley.

The 2017 APEC Summit: A Game Changer for the Asia-Pacific?


November 16, 2017

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Number 405 | November 15, 2017

ANALYSIS

The 2017 APEC Summit: A Game Changer for the Asia-Pacific?

By Le Dinh Tinh

One of the most important diplomatic, political, and economic events for the Asia-Pacific region this year – the APEC Summit – was held in Da Nang, Viet Nam (November 6-11, 2017). Amid the fast changing geostrategic context and domestic situation in a number of countries, the APEC Leader’s week may have been a game changing moment for the Asia-Pacific region for a number of reasons.

First, APEC is the premier forum in the region to facilitate the realization of the development goals set forth by the United Nations. Home to around 2.8 billion people, approximately 59 percent of world GDP and 49 percent of world trade, APEC includes the world’s biggest economies, such as the US, China, Japan, ASEAN, and thus has the potential to make important economic contributions to the region – and the world. APEC could help to promote economic development in the region in many important ways. Even though the Asia Pacific is the fastest-growing region at a time when the world economy is witnessing positive growth, there are lurking risks such as inward-looking policies of many countries, aging populations, as well as traditional and emerging security challenges. With the focus on “creating new dynamism, fostering a shared future,” the 2017 APEC under the host of Viet Nam proposed four areas for cooperation: a) sustainable, innovative and inclusive growth; b) regional economic integration and connectivity; c) dynamism for micro, small, and medium-sized enterprises (MSMEs) – a key driver of the region’s growth; and d) food security and achieving sustainable agriculture. Topics of discussion also included improving work force skills to meet the new demand for the fourth industrial revolution, reducing income gaps and, and promoting inclusive and equitable development. The Danang Declaration – unanimously adopted at the Summit – reaffirmed all these and called them “long-standing commitments” by all member economies. Similarly, the dramatic revival of the Trans Pacific Partnership Agreement talks (now changed to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership) after intensive negotiations in Danang has helped tighten an embrace of “high-stardard,” “balanced,” “free,” and “fair” game of trade for concerned stakeholders.

Second, the APEC Summit provides an opportunity for regional economies to make their priorities better known to each other, thus boosting trust and cooperation. Through high-level interaction, the US and China, whose relationship is a crucial factor shaping the region’s geopolitical landscape, identified measures to address new realities. On the one hand, US policy toward the Asia Pacific, despite a rough start, has gained clarity, especially on the security-defense side. Soon after his arrival in Danang, President Trump delivered a speech promoting the idea of a “free and open Indo-Pacific”, with significant implications both for the regional architecture and the US future ties with allies and partners. On the other, China has become more confident internationally owing to its rise in both capacity and determination. Many argue that China has eased and even dropped the long-time brake on its strategy of “tao guang yang hui” (hide one’s capabilities and bide one’s time). An American scholar Michael Pillsbury has gone further by stating that China’s international strategy is already effective both at present and in the longer term. President Xi called globalization an “irreversible historical trend”, affirming China’s place as a leader in the trend. Japan, South Korea, and Australia – important members of APEC – have recently played more active roles in regional affairs. These new-found strategic contours give birth to a hope that following the meetings in Viet Nam, the United States, China, and other powers will be able to make necessary adjustments to their new postures for the larger interests of the region.

Third, at the APEC Summit, for the first time ASEAN leaders had a dialogue with APEC members’ heads of delegation. This is a testament to both ASEAN and APEC’s continued aspirations for a wider community of cooperation. APEC, like ASEAN, constitutes a significant building block for the region’s deeper integration and connectivity. ASEAN has endeavored to keep its centrality in the regional architecture, one with values shared by APEC, such as open regionalism and inclusiveness. The Association is however facing new challenges. ASEAN fears of a regional lack of unity are starting to become a reality. The principle of consensus that has helped ASEAN in the past now raises questions about the organization’s effectiveness. The last ASEAN Foreign Ministers meeting in Manila, for example, showed that to a certain extent reaching unanimity on vital issues like the South China Sea has become harder. Against this backdrop, the 2017 APEC, with its agenda on practical cooperation and community-building, and its multilateralism, should be a naturally complementary process for ASEAN.

For all of these reasons the November 2017 APEC Summit came at a critical time and has the potential to make important contributions. Da Nang – a beautiful coastal city in central Vietnam – provided an ideal venue for dialogue between leaders from member economies. In early October, advance teams from 21 economies expressed their satisfaction with Vietnam’s preparatory work. This same positive feeling was also witnessed when the Summit’s most important moment – the Leaders’ Meeting Retreat – ended on November 11. US President Donald Trump’s attendance bodes well for regional cooperation, and adds clarity to US policy toward the region. Unlike many past US presidential trips to Asia, President Trump’s took place in the first year of his administration. Chinese President Xi Jinping also drew a lot of attention because the meeting took place not long after China’s 19th Party Congress. The region wanted to know Beijing’s major policy lines for the new term as could be seen in President Xi’s numerous sideline meetings, and Vietnam was the first foreign country President Xi visited. Russia, Japan, Canada, South Korea, and Australia (an APEC founding member) certainly took APEC seriously with their respective agreement on the host country’s proposed agenda. As for ASEAN, with the presence of Secretary General Le Luong Minh, it was able to seize the opportunity to cement its solidarity and the working principles that have brought about its successes in the last five decades.

The 2017 APEC Summit presents a key medium for regional stakeholders to tackle current problems and promote better understanding. APEC’s consensus-based approach, broad inclusiveness, and efficient platform for numerous multilateral and bilateral meetings make the venue important. Cooperative programs within the APEC framework may be either substantive or symbolic, but given all the present challenges and needs, both  are valuable for the region.

About the Author

Le Dinh Tinh, PhD, is a Senior Fellow at the Diplomatic Academy of Vietnam. He can be contacted at tinhiir@gmail.com.

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Remarks by President Trump on His Trip to Asia (Full Text)


November 16, 2017

Remarks by President Trump on His Trip to Asia

Source: The White House, Washington DC

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“I explained to all of the world leaders, and across Asia, how well the United States is doing. Economic growth has been over 3 percent the last two quarters and is going higher. Unemployment is at its lowest level in 17 years. The stock market has gained trillions of dollars in value since my election and has reached record highs. We are massively increasing our military budget to historic levels .–President Donald J. Trump

 

Last night, I returned from a historic 12-day trip to Asia. This journey took us to five nations to meet with dozens of foreign leaders, participate in three formal state visits, and attend three key regional summits. It was the longest visit to the region by an American President in more than a quarter of a century.

Everywhere we went, our foreign hosts greeted the American delegation, myself included, with incredible warmth, hospitality, and most importantly respect. And this great respect showed very well our country is — further evidence that America’s renewed confidence and standing in the world has never been stronger than it is right now.

When we are confident in ourselves, our strength, our flag, our history, our values — other nations are confident in us. And when we treat our citizens with the respect they deserve, other countries treat America with the respect that our country so richly deserves.

During our travels, this is exactly what the world saw: a strong, proud, and confident America.

Today, I want to update the American people on the tremendous success of this trip and the progress we’ve made to advance American security and prosperity throughout the year.

When I came into office, our country was faced with a series of growing dangers. These threats included rogue regimes pursuing deadly weapons, foreign powers challenging America’s influence, the spread of the murderous terror group ISIS, and years of unfair trade practices that had dangerously depleted our manufacturing base and wiped out millions and millions of middle-class jobs.

The challenges were inherited, and these products really showed what previous mistakes were made over many years — and even decades — by other administrations. Some of these mistakes were born of indifference and neglect. Others from naïve thinking and misguided judgement. In some cases, the negative influence of partisan politics and special interests was to blame. But the one common thread behind all of these problems was a failure to protect and promote the interests of the American people and American workers.

Upon my inauguration, I pledged that we would rebuild America, restore its economic strength, and defend its national security. With this goal in mind, I vowed that we would reaffirm old alliances and form new friendships in pursuit of shared goals. Above all, I swore that in every decision, with every action, I would put the best interests of the American people first.

Over the past 10 months, traveling across the globe and meeting with world leaders, that is exactly what I have done.

Earlier this year, in Saudi Arabia, I spoke to the leaders of more than 50 Arab and Muslim nations about our strategy to defeat terrorists by stripping them of financing, territory, and ideological support. And I urged the leaders to drive out the terrorists and extremists from their societies. Since that time, we have dealt ISIS one crushing defeat after another.

In Israel, I reaffirmed the unbreakable bond between America and the Jewish State, and I met with leaders of the Palestinian Authority and initiated an effort to facilitate lasting peace between the Israelis and the Palestinians.

In Brussels, I urged our NATO allies to do more to strengthen our crucial alliance and set the stage for significant increases in member contributions. Billions and billions of dollars are pouring in because of that initiative. NATO, believe me, is very happy with Donald Trump and what I did.

In Warsaw, I declared to the world America’s resolve to preserve and protect Western civilization and the values we hold so dear.

In Rome, Sicily, Hamburg, and Paris, I strengthened our friendships with key allies to promote our shared interests of security and prosperity.

In September, at the United Nations General Assembly in New York, I urged that the nations of the world join in confronting rogue regimes that threaten humanity and laid out a model for international cooperation grounded in respect for sovereignty and the responsibilities that come with it.

On each trip, I have worked to advance American interests and leadership in the world.

And to each of these places, I have carried our vision for a better — a vision for something stronger and sovereign — so important — sovereign and independent nations, rooted in their histories, confident in their destinies, and cooperating together to advance their security, prosperity, and the noble cause of peace.

It was this same vision that I carried to Asia two weeks ago. And it was this same commitment to you, the American people, that was always at the forefront of my mind and my thinking.

Our trip was defined by three core goals. First: to unite the world against the nuclear menace posed by the North Korean regime, a threat that has increased steadily through many administrations and now requires urgent action.

Second: to strengthen America’s alliances and economic partnerships in a free and open Indo-Pacific, made up of thriving, independent nations, respectful of other countries and their own citizens, and safe from foreign domination and economic servitude.

And third: to finally — after many years — insist on fair and reciprocal trade. Fair and reciprocal trade — so important. These two words — fairness and reciprocity — are an open invitation to every country that seeks to do business with the United States, and they are a firm warning to every country that cheats, breaks the rules, and engages in economic aggression — like they’ve been doing in the past, especially in the recent past.

That is why we have almost an $800-billion-a-year trade deficit with other nations. Unacceptable. We are going to start whittling that down, and as fast as possible.

With these goals, it was my profound honor to travel on this journey as your representative. I explained to all of the world leaders, and across Asia, how well the United States is doing. Economic growth has been over 3 percent the last two quarters and is going higher. Unemployment is at its lowest level in 17 years. The stock market has gained trillions of dollars in value since my election and has reached record highs. We are massively increasing our military budget to historic levels. The House has just passed a nearly $700 billion defense package, and it could not come at a better time for our nation.

Once again our country is optimistic about the future, confident in our values, and proud of our history and a role in the world.

I want to thank every citizen of this country for the part you have played in making this great American comeback possible. In Asia, our message was clear and well received: America is here to compete, to do business, and to defend our values and our security.

We began our trip in Hawaii to pay our respects to brave American service members at Pearl Harbor and the United States Pacific Command, the guardian of our security and freedom across the Indo-Pacific region.

As our country prepared to observe Veterans Day, we remembered the incredible sacrifices and courage of all of the veterans whose service has preserved our liberty and a way of life that is very special. We also thanked military families for their support for our brave servicemen and women.

From Hawaii, we traveled to Japan, a crucial U.S. ally and partner in the region . Upon landing in Japan, my first act was to thank the American service members and Japanese Self-Defense Forces who personify the strength of our enduring alliance.

Image result for President Trump with Abe in Japan

Prime Minister Abe and I agreed on our absolute determination to remain united to achieve the goal of denuclearized North Korea. Shortly following our visit, Japan announced additional sanctions on 35 North Korean entities and individuals. Japan also committed to shouldering more of the burden of our common defense by reimbursing costs borne by American taxpayers, as well as by making deep investments in Japan’s own military. This will include purchases of U.S. advanced capabilities — from jet fighters to missile defense systems worth many, many billions of dollars — and jobs for the American worker.

The Prime Minister and I also discussed ways we can deepen our trade relationship based on the core principles of fairness and reciprocity. I am pleased that since January of this year, Japanese companies have announced investments in the United States worth more than $8 billion — 17,000 jobs. Thank you.

Oh, they don’t have water? That’s okay. What? That’s okay.

(Drinks water.)

THE PRESIDENT: Japanese manufacturers, Toyota and Mazda, announced that they will be opening a new plant in the United States that will create 4,000 jobs.

We also signed agreements between our nations to enhance infrastructure development, increase access to affordable energy, and advance our foreign policy goals through economic investment.

From Japan, we traveled to another key American ally in Asia — the Republic of Korea. My official state visit to South Korea was the first by an American President in 25 years.

Speaking before the National Assembly of the Republic of Korea, I spoke the truth about the evil crimes of the North Korean regime, and I made clear that we will not allow this twisted dictatorship to hold the world hostage to nuclear blackmail.

I called on every nation, including China and Russia, to unite in isolating the North Korean regime — cutting off all ties of trade and commerce — until it stops its dangerous provocation on — and this is the whole key to what we’re doing — on denuclearization. We have to denuclearize North Korea.

We have ended the failed strategy of strategic patience, and, as a result, we have already seen important progress — including tough new sanctions from the U.N. council — we have a Security Council that has been with us and just about with us from the beginning.

South Korea agreed to harmonize sanctions and joined the United States in sanctioning additional rogue actors whose fund and funds have helped North Korea and North Korea’s nuclear and ballistic missile programs. It’s unacceptable to us.

The United States welcomed the decision of President Moon to remove the payload restrictions on missiles to combat the North Korean threat. And together we reaffirmed our commitment to a campaign of maximum pressure.

Like Japan, South Korea is increasing its defense contributions. During our meetings, President Moon acknowledged his desire for equitable cost-sharing for the United States military forces stationed in South Korea. And I visited soldiers at Camp Humphreys, a brand-new, joint American-South Korean base, paid for almost entirely by the South Korean government. At that base, I discussed with the United States and South Korean military leaders both military options and readiness to respond to North Korean provocation or offensive actions.

During our visit, President Moon and I also discussed America’s commitment to reducing our trade deficit with South Korea. At my discretion and direction, we are currently renegotiating the disastrous U.S.-Korea trade agreement signed under the previous administration. It has been a disaster for the United States.

Last week, 42 South Korean companies announced their intent to invest in projects worth more than $17 billion dollars in the United States, and 24 companies announced plans to purchase $58 billion dollars in American goods and services.

From South Korea, Melania and I traveled to China, where, as in Japan and South Korea, we were greatly honored by the splendor of our reception. Our trip included the first official dinner held for a foreign leader in the Forbidden City since the founding of the modern China, where we enjoyed a very productive evening hosted by President Xi and his wonderful wife, Madam Pung.

Image result for President Trump with President Xi in Beijing

During our visit, President Xi pledged to faithfully implement United Nations Security Council resolutions on North Korea and to use his great economic influence over the regime to achieve our common goal of a denuclearized Korean Peninsula.

President Xi recognizes that a nuclear North Korea is a grave threat to China, and we agreed that we would not accept a so-called “freeze for freeze” agreement like those that have consistently failed in the past. We made that time is running out and we made it clear, and all options remain on the table.

I also had very candid conversations with President Xi about the need to reduce our staggering trade deficit with China and for our trading relationship to be conducted on a truly fair and equitable basis. We can no longer tolerate unfair trading practices that steal American jobs, wealth, and intellectual property. The days of the United States being taken advantage of are over.

In China, we also announced $250 billion worth in trade-investment deals that will create jobs in the United States.

From China, I flew to the city of Da Nang in Vietnam, to attend the Leaders Meeting for APEC — Asia Pacific Economic Cooperation. There, I spoke to a major gathering of business leaders, where I reminded the world of America’s historic role in the Pacific as a force for freedom and for peace.

Image result for President Trump at APEC DanangU.S. President Donald Trump speaks on the final day of the APEC CEO Summit on the sidelines of the Asia-Pacific Economic Cooperation (APEC) leaders’ summit in Danang, Vietnam, Friday, Nov. 10, 2017. (Photo | Associated Press)

 

Standing on this proud history, I offered our vision for robust trading relationships in which Indo-Pacific nations can all prosper and grow together. I announced that the United States is ready to make bilateral trade deals with any nation in the region that wants to be our partner in fair and reciprocal trade.

We will never again turn a blind eye to trading abuses, to cheating, economic aggression, or anything else from countries that profess a belief in open trade, but do not follow the rules or live by its principles themselves.

No international trading organization can function if members are allowed to exploit the openness of others for unfair economic gain. Trade abuses harm the United States and its workers — but no more. No more.

We will take every trade action necessary to achieve the fair and reciprocal treatment that the United States has offered to the rest of the world for decades.

My message has resonated. The 21 APEC leaders — for the first time ever — recognized the importance of fair and reciprocal trade, recognized the need to address unfair trade practices, and acknowledged that the WTO is in strong need of reform. These leaders also noted that countries must do a better job following the rules to which they agreed.

I also made very clear that the United States will promote a free and open Indo-Pacific in which nations enjoy the independence and respect they deserve.

In Vietnam, during a state visit in Hanoi, I also met with President Quang and Prime Minister Fook to discuss the growing friendship between our countries. Our Vietnamese partners are taking new actions to enforce sanctions on North Korea. In addition, we committed to expand trade and investment between our countries, and we pledged to address the imbalances. I am particularly pleased that the United States and Vietnam recently announced $12 billion in commercial agreements, which will include $10 billion in U.S. content.

 

Finally, I visited the Philippines, where I met with numerous world leaders at the U.S.-ASEAN and East Asia Summits. At ASEAN — the Association of Southeast Asian Nations — we made it clear that no one owns the ocean. Freedom of navigation and overflight are critical to the security and prosperity of all nations.

I also met with the Prime Ministers of India, Australia, and Japan to discuss our shared commitment to a free and open Indo-Pacific.

Image result for Trump with Duterte in Manila

During our visit, President Duterte of the Philippines thanked the American people and our armed forces for supporting the recent liberation of Marawi from ISIS. We pledged to strengthen and deepen our long-standing alliance.

At the East Asia Summit, the United States negotiated and signed four important leaders’ statements on the use of chemical weapons, money laundering, poverty alleviation, and countering terrorist propaganda and financing.

And crucially, at both summits and throughout the trip, we asked all nations to support our campaign of maximum pressure for North Korean denuclearization. And they are responding by cutting trade with North Korea, restricting financial ties to the regime, and expelling North Korean diplomats and workers.

Over the last two weeks, we have made historic strides in reasserting American leadership, restoring American security, and reawakening American confidence.

Everywhere we went, I reaffirmed our vision for cooperation between proud, independent and sovereign countries — and I made clear that the United States will be a reliable friend, a strong partner, and a powerful advocate for its own citizens.

The momentum from our trip will launch us on our continued effort to accomplish the three core objectives I outlined: to unite the world against North Korean nuclear threat, to promote a free and open Indo-Pacific region, and to advance fair and reciprocal economic relations with our trading partners and allies in the region.

We have established a new framework for trade that will ensure reciprocity through enforcement actions, reform of international organizations, and new fair trade deals that benefit the United States and our partners.

And we have laid out a pathway toward peace and security in our world where sovereign nations can thrive, flourish, and prosper side-by-side.

This is our beautiful vision for the future. This is a where this vision — this dream — is only possible if America is strong, proud, and free.

As long as we are true to ourselves, faithful to our founding, and loyal to our citizens, then there is no task too great, no dream too large, no goal beyond our reach.

My fellow citizens: America is back. And the future has never looked brighter.

Thank you. God Bless you and God Bless the United States of America. Thank you very much. Thank you. Thank you all.

An American Bull in Asia’s China Shop


November 14, 2017

An American Bull in Asia’s China Shop

By: Asia Sentinel editors

https://www.asiasentinel.com/politics/donald-trump-asia/

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The Donald Trump wrecking ball has now completed its swath across Asia, from Saudi Arabia to Japan. It began on May 20 when he chose Riyadh, the capital of the medieval kingdom and ground zero of Muslim extremism, as his first overseas visit after taking office and has ended with his now-concluded 12 day swing and his embrace of the Philippines’ murderous president Rodrigo Duterte. He took time out to outrage the US’s intelligence community by his fawning embrace of former KGB Colonel Vladimir Putin, who, wide-eyed, told Trump he had nothing to do with sabotaging the US election that brought Trump to power.

Thus far the results have been more dangerous in West Asia, where the young Saudi de facto ruler Prince Mohamed bin Salman has since embarked on confrontations with Iran in Yemen and now Lebanon, actions which appear to please few other than Israeli Prime Minister Benyamin Netanyahu’s expansionist government.

In east Asia on the other hand, the reaction to Trump has been to gasp at his gaffes and empty rhetoric and try to carry on as though he did not exist. So far the only damage has been to the US itself as it sees the policies of 70 years which have so benefited trade and prosperity in the US itself as well as much of Asia viewed as contrary to US interests. For Trump it appears that the only free trade he wants is ability to plant Trump Towers everywhere from Riyadh to Bali to Manila via Moscow.

The record of the President‘s Asian tour was indeed remarkable, leaving a string of Asian leaders agog at his superficiality. Shinzo Abe was suitably flattering and took him golfing. But the highlight of the visit was a meal which proved that the Donald had little taste for his host nation’s acclaimed foods but needed a large cheeseburger of US-produced beef and cheese to keep him going while Abe looked on, bemused. On trade issues, which he says are so important, nothing significant transpired, with the President focusing on the art of the deal across Asia rather than the structural reforms that the trade regime needs.

China did even better in flattering him with a display of pomp which would give credit to an ancient empire, with Xi Jinping as emperor – an emperor whose growing power is sending tremors throughout the rest of Asia.  But again Trump came home empty-handed on trade.  Promises of US$250 billion of imports to China may well be built on sand. Commercial sales announced totalled US$65 million, many involving goods that Chinese companies buy routinely. Others were merely memorandums of understanding.

A Chinese decision to ease foreign access to financial markets appears to have had no direct connection to the visit. Trump even undercut his own cause by suggesting that China’s huge trade surplus with the US was the fault of the system, not China itself, saying “I don’t blame China. Who can blame a country for being able to take advantage of another country for the benefit of its citizens? I give China great credit.”

Instead, Trump blamed past American presidents. By definition this undermined demands of US businessmen for fairer treatment by China – treatment of the type which was the norm in most of its major trade partners. Legitimate US complaints could be ignored.

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His South Korea visit demonstrated just how much his violent rhetoric against North Korea, not to mention his attacks on trade pacts, had already so damaged relations that Seoul succumbed to Chinese economic and diplomatic pressures and agreed to limiting deployment of THAAD missiles.

On to Vietnam and, the APEC meeting in Da Nang showed just how far Trump was out of step with the attempts of the other nations on either side of the Pacific to forge closer economic links and reduce trade barriers. Meanwhile the remaining nine members of the Trans-Pacific Partnership, following withdrawal of the US, humiliated Trump while he was in Asia by announcing the revival of the plan, albeit under a slightly altered name.

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If that wasn’t a huge slap in the face for the US from its major Asian allies, more derision was to follow.  Trump proclaimed himself a potential mediator in South China Sea disputes. Reactions ranged from open-mouthed amazement to guffaws of laughter. The only person who seemed to take it seriously was the Philippines’ neophyte foreign minister Alan Peter Cayetano who was quoted saying “We welcome that offer.”

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But at least for Trump he was now headed for the one country in the world where, according to recent surveys, he enjoys more positive than negative views. That certainly fits well in a nation which still gives high marks to President Duterte despite, or because of, a campaign of extrajudicial killings of thousands of supposed, mostly poor, drug users – or, too often – people who weren’t drug users at all, but infants as young as 3 who were murdered mistakenly by police.

Trump remained silent on that topic but meanwhile was able to share with Duterte their mutual disdain for President Obama.  This was certainly no way to win friends and influence people in the rest of Asia which has relatively very fond memories of the thoughtful and dignified former president.

Nor did Trump’s pals-act with Duterte make any dent in Duterte’s preference for Chinese money over asserting the rights in the sea accorded by the Permanent Court of Arbitration.

Image result for Trump and Modi in Manila

The one plus, at least in some quarters, of the visit was Trump’s reference to the Indo-Pacific rather than Asia Pacific, bringing India into the regional equation. This was not in fact new. The phrase had been used by Obama and it accords with history in so far as Indian cultural and trade influence was long bigger than China’s in much of Southeast Asia.

 

But that for now is a sideshow as apparent battle lines are drawn between an east Asian focus on open trade and a Trumpian desire to tear up multilateral pacts in favor of bilateral deals. That would spell the death of US influence in the region. Most likely it will not happen because US business, military and bureaucracy are all more concerned with building US influence to counter China than retreating behind tariff walls. But meanwhile China is tempted to gloat and smaller Asian countries are reluctantly trimming their policies in response to US trade threats and general incoherence.

ASEAN leaders should embrace 4IR for another 50 years of peace, growth


November 24, 2017

ASEAN leaders should embrace 4IR for another 50 years of peace, growth

by Jayant Menon and Anna Fink, ADB

http://www.eastasiaforum.org/2017/11/09/asean-looks-to-the-fourth-industrial-revolution/

The 10-member ASEAN is celebrating this year its 50th anniversary.
The 10-member ASEAN is celebrating this year its 50th anniversary.

When the leaders of the Association of Southeast Asian Nations (ASEAN) gather for their 31st Summit in the Philippines this week, they will also celebrate “ASEAN@50” – testimony to ASEAN’s endurance and durability, as the longest-running regional grouping of developing countries in the world.

A major item on the agenda will be regional security and addressing the rising tide of terrorism.  This takes ASEAN back to its roots, having been born as a politico-security pact during the Vietnam War in 1967.

Indeed, ASEAN’s role in sustaining peace and stability in Southeast Asia is often undervalued, if not overlooked. It’s easy to see why. War cannot go unnoticed but peace can, easily. ASEAN deserves its share of the credit for delivering the peace dividend. Moving forward, its economic success may depend on a different kind of revolution.

Inclusive, innovation-led growth

The summary of Key Outcomes from the 49th ASEAN Economic Ministers Meeting in September noted that the overall thematic priority of this year’s Summit would be “Inclusive, Innovation-led Growth”.  This would be supported by three strategic measures: increasing trade and investment, integrating micro, small and medium-sized enterprises (MSMEs) into global value chains, and developing an innovation-driven economy.

The trade slowdown appears to have bottomed out, and there are early indications that both domestic private investment and foreign direct investment are showing promising signs of recovery in countries like Malaysia and Indonesia, and continue to increase impressively in the Mekong countries. To sustain this growth, reforms will need to continue. Achievements on tariff liberalization have been partially offset by a rise in non-tariff measures which are a much more significant barrier to trade.

  Innovation-driven ASEAN economy must address 4IR

A new and growing trend in cross-border investment involves MSMEs, so much so that the last ASEAN Investment Report took this as its theme. And an innovation-driven economy has to address the challenges and opportunities presented by the so-called Fourth Industrial Revolution (4IR).

Image result for ASEAN and the 4th Industrial Revolution

All three strategic items are linked, especially the last two, as discussed in a joint Asian Development Bank-World Economic Forum report titled, What does the 4IR mean for ASEAN Regional Economic Integration?, to be presented to leaders at the upcoming Summit.

The report notes the differing level of preparedness of member countries, negatively correlated to their level of development, and how this may widen rather than narrow development gaps if not addressed.

4IR brings challenges and opportunities

One of the major challenges of the 4IR will be the loss of jobs caused by automation and increasingly advanced robotics and artificial intelligence. Jobs losses will affect some countries more than others. Low-skilled, repetitive jobs (such as assembly line workers) are most at risk, but increasingly service jobs (such as business process outsourcing) will be threatened.

As an immediate response, enabling greater mobility of unskilled workers would curtail unemployment in sending countries and help sustain growth in receiving countries, while also helping counter growing economic inequality within and between countries.

Image result for ASEAN and the 4th Industrial Revolution

In the medium term, new industries will grow and workers will need new skills. Investing in improving human capital must start now. The skills needed extend beyond technical capabilities to include creativity and innovative problem solving. What’s more, the accelerating pace of change calls for adult training and life-long learning not just early-life education. In addition, mutual recognition agreements must expand to cover new occupations, while expediting the harmonizing and streamlining of employment visas.

Integrating MSMEs into global value chains

One of the major opportunities of the 4IR, as highlighted in the report, is the potential of “disruptive technologies” to empower MSMEs. More than 90% of enterprises within ASEAN are MSMEs and they provide most of the employment in member states.

MSMEs are often constrained by lack of access to business and financial services. Blockchain technology has the potential to dramatically increase the security of cross-border financial transactions and logistics even in countries where these services are relatively underdeveloped. This technology has the potential to benefit the smallest firms in the poorest countries of ASEAN.

The rise of online marketplaces also provides platforms for MSMEs to access regional and global markets.

  4IR can help integrate ASEAN MSMEs into global value chains

The 4IR, therefore, provides an opportunity for ASEAN to meet its goal of greater inclusion by integrating MSMEs into global value chains. But it also presents a challenge to the region to invest in human capital to continue to trade and attract investment, and to enable innovation-driven economies.

Given the unequal impact of new technologies in the region, the promotion of inclusive growth must also be seen as a key pillar in underpinning peace in the region. Growing economic inequality could quickly contribute to social unrest and political instability.

Embracing the 4IR, and inclusive, innovation-led growth will be essential to securing another 50 years of peace in ASEAN.

Jayant Menon is Lead Economist in the Economic Research and Regional Cooperation Department at the Asian Development Bank, and Adjunct Fellow of the Arndt–Corden Division of Economics, The Australian National University.

Anna Fink is Economist in the Economic Research and Regional Cooperation Department at the Asian Development Bank.

This blog was first published as an op-ed by the Jakarta Globe, Singapore Business Times, Phnom Penh Post, Agence Kampuchea Presse, Myanmar Times, Philippine StarEast Asia Forum, Daily Star (Bangladesh), and the Bangkok Post.