Anwar faces difficulties in power

May 16, 2018

Like Suu Kyi, Anwar faces difficulties in power

by Ross Tapsell and Kean Wong

Malaysia has been stable, predictable, even boring, for Australians looking at its Southeast Asian neighbourhood, which has experienced great upheaval in the decades since the Vietnam War and the Asian Financial Crisis of the 1990s. Malaysia’s ruling coalition of Barisan Nasional was in power for more than 60 years, rigging the elections system enough to allow them to maintain its rule. Now, in a surprising turn of events, that system has failed them. And no one is really sure what comes next.

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Anwar Ibrahim

Malaysia has now entered uncharted waters, matching the uncertainty of the South China Sea that divides the peninsula from East Malaysia’s states of Sabah and Sarawak. First, prime minister Najib Razak was implicated in one of the world’s largest corruption scandals, with millions of dollars found in his personal bank account in what the US Department of Justice declared was the biggest kleptocracy case it has ever investigated. But Najib’s government was routed at last week’s polls. Winning in its place is a coalition called Pakatan Harapan (or “hope”), five parties with a broad array of agendas and visions for Malaysia.

Former Prime Minister Mahathir Mohamad was last week sworn in again, this time as the 7th Prime Minister, in a deal he took to voters where he would seek to release jailed opposition leader Anwar Ibrahim via a royal pardon from the King, stepping aside after an expected two years to enable Anwar to take over. Anwar is expected to be released this week, as early as today.

In Australia, two former Prime Ministers reflect the ambivalence and sometimes confused views many share about a “predictable” Malaysia. As Tony Abbott tweeted last week: “PM Najib Razak was a good friend of Australia and a voice of decency and common sense at international gatherings. On the big questions he got much right and his time in government saw strong and effective cooperation between our countries.” Kevin Rudd avoided mentioning Najib, but shared Abbott’s view that this “new” Malaysia has far-reaching consequences for Australia and the region. “This is a stunning development with profound implications for Malaysia, South East Asia and China,” he tweeted. Malaysia is a key partner for Australia in responding to a rising China.

But what will this new Malaysia look like? For this unfinished nation’s burgeoning civil society, the “reformasi” (or Malaysian reformation) movement that was sparked off by Anwar’s sacking and jailing by Mahathir 20 years ago still drives the democratisation hopes represented by Anwar.

For many urban Malaysians, over 70 per cent of the country, Anwar personalises the non-racialised political and economic reforms they yearn for, with many assaulted and jailed over the past decades by BN governments led by Mahathir and Najib. Anwar’s coalition politics contrasted its inclusive nature against the “Malay supremacy” policies that were a feature of BN’s rule.

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Opposition party supporters cheer and wave their party flags on election night.

But, like Aung San Suu Kyi in Myanmar, Anwar faces difficulties. Mahathir’s new party ran on a policy to maintain these Malay-first policies, and is buffeted by a still hardy Islamist PAS party as well. This new government would not have won without Mahathir’s leadership and this promise. The opposition coalition was able to placate and win over millions of semi-rural and rural Malay voters previously beyond Anwar’s reach, partly because Mahathir represents Malaysia – and ethnic Malay leadership – at its peak in the 1990s, when Malaysia hosted the world’s tallest buildings and the stock market was the biggest (briefly) in Asia. Mahathir also played off his elder statesman role in the campaign by cutting through to rural voters with simple attacks against Najib, shredding him with accusations of “thief!”. The enmity was starkly and deliberately drawn, and it worked.

Understanding and engaging with this new, possibly fractured Malaysia will be essential to the region’s security, economy, and political developments. This new Malaysia is a win for democracy – and a big win for Australia’s own values. But this will require Australia and its democratic neighbours to invest in this win like never before.

Ross Tapsell is Director of the ANU’s Malaysia Institute. Kean Wong is the Malaysia Editor of the ANU’s Southeast Asia website, New Mandala.

Smart Asia Pacific pivots beyond a Trump-led America

April 20, 2018

Smart Asia Pacific pivots beyond a Trump-led America

Pradumna B Rana and Xianbai Ji, RSIS
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The United States President Donald Trump thinks it is easy to win trade wars. It takes a genius like him to figure it out. No one in the United States dares to challenge his doctrine


US President Donald Trump has taken a radically protectionist approach to trade. Trump has launched a series of unilateral moves including increasing tariffs on steel and aluminium imports on national security grounds and announcing plans to impose tariffs on US$60 billion of Chinese imports.

Uncertainties regarding continued access to the US market have forced Asia Pacific countries, for whom trade is an economic lifeline, to pivot beyond Trump-led America by adopting a three-pronged policy response: the acceleration of mega free trade agreements (FTAs), the enhancement of regional connectivity and the deepening of inter regional economic cooperation.

Japan and Australia have taken the lead in pushing through the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP or TPP-11) without the United States. This agreement was signed on  March 8, 2018 and is expected to come into effect in early 2019, once it is ratified by at least six of the 11 members.

Although the CPTPP suspends or amends 22 US-supported provisions from the original Trans-Pacific Partnership, the CPTPP is still a gold standard agreement. It eliminates tariffs on 95 per cent of merchandise trade between the agreement’s parties while containing many ground-breaking rules relevant to 21st century trade. The CPTPP offers large economic benefits even without US participation.

Several other countries may also join the CPTPP. South Korea says it is assessing the CPTPP’s effect before making a decision. Indonesia, Thailand and even the United Kingdom have expressed interest in joining the accord. Trump has said that he is open to re-joining the trade agreement but only if it involves a ‘better deal for the United States’. This may not happen any time soon.

Asian countries have also accelerated negotiations for the ASEAN-led Regional Comprehensive Economic Partnership (RCEP). If the CPTPP is successful, it should give a boost to RCEP negotiations. The negotiating parties are optimistic that RCEP can be concluded in 2018 under Singapore’s ASEAN chairmanship. To fast-track RCEP, the idea of an ‘RCEP minus X’ formula is gaining traction.

Since RCEP is a mega FTA comprising mostly developing countries, it would not be as transformative as the CPTPP. But its conventional free trade agenda would still confer significant benefits. We estimate that in the medium term, RCEP would generate welfare gains of US$127 billion, compared to US$35 billion from the CPTPP. Cambodia and Thailand are likely to benefit the most from RCEP.

Asia Pacific countries have also stepped up efforts to enhance regional connectivity through infrastructure development, as a second prong to offset US trade protectionism. In 2016, ASEAN unveiled its Master Plan on ASEAN Connectivity. The plan envisions a ‘seamlessly and comprehensively connected and integrated ASEAN’ by 2025. It includes several major region-wide infrastructure projects such as the ASEAN Highway Network.

But the headline-grabbing infrastructure initiative in the region is China’s Belt and Road Initiative (BRI), spearheaded by Chinese President Xi Jinping since 2013. The BRI aims to connect more than 70 countries across the Afro–Eurasian supercontinent via large-scale projects including railways, roads, bridges, ports and pipelines. Despite criticism of a lack of transparency and of China’s debt-trap diplomacy, many developing countries in need of investment finance see the BRI as an attractive proposition.

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Figure It out, Guys.

Two connectivity proposals can be viewed as alternatives to the BRI. India is collaborating with Japan under the Asia–Africa Growth Corridor proposal to develop maritime connectivity across Africa, India and Southeast Asia. Australia, India, Japan and the United States are involved in another grouping known as the Indo-Pacific Partnership. Both proposals remain at the consultation stage.

The third prong of the Asia Pacific response to rising US protectionism is the promotion of inter-regional economic cooperation.

On March 5, 2018, the Philippines ratified its FTA with the European Free Trade Association. Australia and New Zealand hope to start trade negotiations with the European Union this year, while ASEAN hopes to resume its stalled region-to-region FTA negotiations with the European Union in the next few months. South Korea signed FTAs in February 2018 with a number of Central American countries. Singapore is negotiating an FTA with the Pacific Alliance (Chile, Colombia, Mexico and Peru).

What shape could the evolving regional trade architecture take?  Countries would benefit from joining more than one mega FTA. For example, Vietnam’s real GDP would increase by 1.5 per cent from joining the CPTPP or 3.3 per cent from joining RCEP. If Vietnam joins both, its real GDP would increase by an estimated 4.2 per cent.

Once the CPTPP is ratified, countries party only to the CPTPP (Canada, Mexico, Peru and Chile) should seek RCEP membership. Similarly, the countries party only to RCEP (Cambodia, China, India, Indonesia, Laos, Myanmar, Philippines, South Korea and Thailand) should seek CPTPP membership. This would result in a bloc in the Asia Pacific of 20 countries with membership in both the CPTPP and RCEP.

The advantages of dual membership are access to Chinese and Indian markets through RCEP and valuable exposure to high-quality trade rules through the CPTPP. Countries would not have to choose sides between the Japan- and Australia-led CPTPP and the ASEAN-led RCEP.

Ironically, President Trump may have done more to promote regional and interregional cooperation in the Asia Pacific than the region would have achieved independently.

Pradumna B Rana is Associate Professor at the S Rajaratnam School of International Studies (RSIS), Nanyang Technological University, Singapore.

Xianbai Ji is a PhD candidate at RSIS holding the Nanyang President’s Graduate Scholarship.

Earlier versions of this article appeared here on RSIS and here on the Council on Foreign Relations website.


Deciphering Jokowi’s Javanese card in ASEAN-Australia relations

March 30, 2018

Deciphering Jokowi’s Javanese card in ASEAN-Australia relations

by Dedi Dinarto

Research Associate with the Indonesia Programme, S. Rajaratnam School of International Studies, Nanyang Technological University.

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In an interview with Fairfax media in mid-March, Indonesian President Joko “Jokowi” Widodo said that “it is a good idea” for Australia to join the Association of Southeast Asian States (ASEAN) to increase political and economy stability in the region. This prompted speculation among political analysts. Some have interpreted Jokowi’s implied invitation to Australia as a “Javanese response” – giving an ambiguous answer to please others.

Mission impossible?

Observers argue there is little chance Australia will join ASEAN. This is due to various reasons, including their different defence policies.

Australia is tied to military-based defence pacts, including the Australia, New Zealand, United States Security Treaty (ANZUS Treaty) and North Atlantic Treaty Organization (NATO). The aggressive nature of these pacts goes against ASEAN’s non-interference principle. ASEAN emphasises the absence of external military hostility as its core principle.

Another barrier possibly comes from other ASEAN member states. As ASEAN is run by consensus, all ten members must approve the proposal of having Australia as the bloc’s 11th member. So far, other members have not responded to Jokowi’s suggestion.

In the past, ASEAN leaders, including Indonesia, have resisted the idea. In 2002, the then Malaysian Prime Minister, Mahathir Mohamad, rejected attempts by his Australian counterpart, John Howard, to build closer ties with ASEAN. The previous Indonesian President, Megawati Sukarnoputri, also expressed reservations.

In 2017, former ASEAN secretary-general Rodolfo Severino rebuffed the idea of Australia being part of ASEAN. Australia was “not Southeast Asian”, he said.

Stereotyping Javanese residents

Jokowi’s presidency has reinforced an old pattern in Indonesian politics that the President should be of Javanese ethnicity.

Only one out of seven Indonesian Presidents was not Javanese. The Sulawesi-born B.J. Habibie received the presidential mandate after Suharto resigned following student protests in 1998. And even Habibie is half-Javanese.

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President B.J. Habibie

With the unwritten rule that the Indonesian president should be Javanese, political analysts have often connected Javanese culture with Indonesian leadership. In the case of Jokowi’s comment on ASEAN membership for Australia, analysts believe he was being polite by giving an ambivalent answer.

However, it is important to note that Javanese culture is not simply about being overly polite and giving safe answers.

The richness of Javanese culture comprises both belligerent and benevolent elements, such as ambition, influence, interests, power, harmony and thoughtfulness (ngugemi rasa) – the idea of being inoffensive and considerate to the feelings of others.

In the past, Indonesian leaders have expressed Javanese culture in various ways for diplomatic purposes.

Strenuous Sukarno

Sukarno, nurtured by Javanese traditions like the wayang stories of Ramayana and Mahabharata, left his mark in history as a strong leader who fought colonialism and imperialism with assertive political tactics, bolstered with his unforgettable charisma.

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The Charismatic Orator President Sukarno seen with US President John F. Kennedy

Javanese believe that such a pattern of foreign policies carries a certain logic, which is depicted through the symbol mandala.

Indonesian historian and academic Soemarsaid Moertono defined mandala as a circle that symbolises the dynamics of influence, interests or ambitions and reflects the Javanese idea of pursuing world domination and universal peace under a sole supreme ruler.

During the 1960s, Sukarno demonstrated a belligerent worldview against Dutch colonialism over West Irian (now West Papua). He also confronted the formation of Malaysia in 1963, which he believed was the extension of British colonial rule in the region.

In this case, Sukarno’s leadership style was a confrontational expression of Javanese culture.

Suharto’s soft and hard approach

Suharto, in contrast, expressed a more benevolent notion of Javanese culture. A native of the Javanese heartland, Suharto avoided open disputes. He preferred solving disputes behind closed doors.

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President Suharto with Cambodia’s  Norodom Sihanouk

One of Suharto’s achievements was to push the “benevolent” Javanese notion of “achieving and maintaining harmony as one of the primary goals of social life” to become ASEAN’s fundamental principles, known as the “ASEAN Way”.

However, Suharto also exercised the belligerent notion of Javanese culture. His campaign against communism in Indonesia and the country’s invasion of Timor Leste (now East Timor) in 1975 are examples of this.

Jokowi’s leadership style

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President Jokowi embodies Javanese politeness and diplomatic courtesy

Jokowi’s statement on Australia joining ASEAN is therefore unsurprising. His statement is an expression of ngugemi rasa, or thoughtfulness.

However, rather than emphasising Jokowi’s Javanese politeness and diplomatic courtesy, the concept of ngugemi rasa might explain his intention not to offend Australia in order to maintain harmonious relationship with ASEAN’s largest southern neighbour.

Therefore, Jokowi’s statement should not be taken lightly. In fact, this is not the first time that Southeast Asian leaders have opined about granting membership to non-Southeast Asian countries.

In May 2017, Philippine President Rodrigo Duterte pushed for the inclusion of Mongolia and Turkey in ASEAN, a move that dismissed the importance of geographical boundaries and shared historical experience.

Although Australia is not a member of ASEAN, their relationship is inseparable as they are interconnected in the economic and security realms. Jokowi’s statement can be understood as a compliment for Australian contributions to the region, instead of an explicit statement of support for Australian ASEAN membership.

It is important for Australia to understand the significant role of Javanese culture in Indonesia’s diplomacy. Taking for granted statements from Indonesia’s Javanese leaders may lead to misunderstandings and misinformed responses.


Misunderstanding ASEAN

March 29, 2018

Misunderstanding ASEAN

by Bunn

“SO when is China going to join ASEAN?” a foreign news editor asked me in the early 1990s by way of introduction at a luncheon meeting in Tokyo.

He had asked when, not if, seeming to assume it was just a matter of time. There was no talk or even rumour of such a prospect at the time, so he must have just dreamt it up.

It was so ludicrous as to seem like a trick question.

Shouldn’t a foreign news editor be better informed about ASEAN and China than to even think of asking such a question? And yet so much about ASEAN remains unknown even among some of its national leaders.

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Turkey in ASEAN?– You must be joking, Mr. President
Last year Philippine President Rodrigo Duterte advocated ASEAN membership for Turkey and Mongolia. The Philippines at the time held the rotating chairmanship of ASEAN, and Duterte must have thought he could do as he pleased.
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Jokowi wants Australian Prime Minister, Malcolm Turnbull, to keep him company in ASEAN. What a ridiculous idea.

This year it was the turn of Indonesian President Joko Widodo to dabble in the ridiculous. On a recent trip to Australia he told the media that Australia should join ASEAN.

Nobody else in ASEAN took either remark seriously, even if those statements made the news throughout the region. In case of lingering delusions resulting from these statements, some history may help.

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South-East Asia has had more than its share of regional organisations through the decades.

During the Cold War, the US and its allies fashioned the South-East Asia Treaty Organisation (SEATO) as a bulwark against international communism. It was basically a military grouping to turn the region into a Cold War zone. SEATO was a misnomer from the start, with six of its eight members from outside South-East Asia. Even the two members from this region, Thailand and the Philippines, were allies of the US in a Western-directed Cold War scheme.

Indonesia and Malaya (later Malaysia), which wanted no part of the Cold War, stayed out. So did most other countries in the region including Cambodia.

The Association of South-East Asia (ASA) was another attempt at regional identity politics. But with only three members Thailand, Malaya and the Philippines, it lacked credibility and purpose.

MAPHILINDO comprising Malaya, Philippines and Indonesia was yet another attempt by South-East Asian countries to create an organisation of the countries of the region themselves. MAPHILINDO came on the eve of Malaysia’s formation, with the undeclared purpose by Macapagal’s Philippines and Sukarno’s Indonesia to thwart the creation of Malaysia. Indonesia had its confrontation (konfrontasi) policy against Malaysia, while the Philippines pursued its claim to Sabah. Thus MAPHILINDO was diplomatically worded to favour Malaya over the others.

Still that did not work. With MAPHILINDO’s hidden purpose known to Malaya, it suffered from neglect and died an early death.

Soon after that Malaysia was born (September 16, 1963) with Sabah, Sarawak, Singapore and Malaya coming together to form a new federation.

Meanwhile, historic change was underway in Indonesia. Rebellion erupted against Sukarno’s rule, he was stripped of his life presidency, and konfrontasi against Malaysia ended when General Suharto assumed power in 1965.

Malaysian officials and their Indonesian counterparts had worked feverishly behind the scenes to manage an emerging situation with a fledgling new Indonesia. Within months, ASEAN was born in 1967.

Thus began a slow but steady process of regional institution building to ensure peace, stability and prosperity through fraternity. Since then, ASEAN has been at the heart of this process.

The other three co-founding members of ASEAN were Thailand, the Philippines and Singapore. With ASEAN, the dormant Philippine claim to Sabah stayed dormant between governments.

Since Indonesia, the Philippines and Malaysia had been locked in disputes over territory and Sukarno’s aggression, ASEAN had to come by way of a neutral partner country: Thailand.

So the Bangkok Declaration of August 8, 1967 saw the formation of ASEAN, following much spadework by Thai officials to ensure agreement. Malaysia acknowledged the hard work put in by Thai Foreign Minister Thanat Khoman, awarding him the title of “Tun” for his efforts.

However, right from the start, disparities existed among ASEAN member countries. There was a hulking Indonesia next to Singapore, while differences in economic development made for more variations.

For ASEAN to work, all members had to agree to certain basics: all members were equal regardless of size or wealth, decisions would be made by consensus, ASEAN chairmanship would be by rotation, none shall interfere in another’s internal affairs, and disputes had to be resolved peacefully.

Even as Thailand and the Philippines continued to host US military bases, these would only be temporary and never to be used against another member country. The ASEAN region would equate peace with freedom and neutrality, while rejecting all manner of nuclear weapons.

The spirit and essence of ASEAN is non-alignment. Today all 10 ASEAN members are in the Non-Aligned Movement, with Thailand, the Philippines and Brunei the latest to join in 1993.

When Duterte championed Turkey and Mongolia for ASEAN membership, many in the region were taken aback. Aung San Suu Kyi asked if he had considered geography and he said he had, showing instead how he had failed to grasp the subject and the question.

Neither Turkey nor Mongolia is in South-East Asia. Besides, Turkey is a member of NATO and is hoping to join the EU.

When Jokowi advocated Australia’s membership of ASEAN, he seemed to have lacked the luxury of thinking before speaking. To be fair he was probably prodded into a rash answer, or something must have been lost in translation.

His apparent enthusiasm has not been supported by his colleagues in government, among Indonesia’s elites or anyone else in ASEAN.

Australia is not in Asia, much less in South-East Asia. When Paul Keating was Prime Minister he insisted Australia was in Asia, but when he moved to a solemn academic post he admitted it wasn’t. Neither is Australia a non-aligned country, nor likely ever to be one. It is comfortably set in the US strategic alliance. Yet some senior Australian figures and establishments like the Asia Society Policy Institute recommend Australia joining ASEAN in 2024 together with New Zealand. Clearly, it is not just a deficiency in geography that is at issue.

One or even a few ASEAN leaders do not make decisions for a grouping that operates by consensus. When ASEAN was being formed in 1967, Malaysian Prime Minister Tunku Abdul Rahman reportedly favoured Sri Lanka’s membership.

Singapore opposed it, while the other three members were not particularly motivated either way. A decade later Papua New Guinea applied to join and ASEAN has kept it waiting ever since.

Some reports suggest even Pakistan and Bangladesh had been keen to join. Again, a better sense of geography and geopolitics would help to keep things in perspective. In 2011 Timor Leste applied to join ASEAN with the official support of Indonesia and Cambodia. Unlike the other hopefuls, the territory and people of Timor Leste had been in ASEAN before independence as part of Indonesia and as Indonesians.

No country joins ASEAN without a formal invitation, with that invitation resulting only from a consensus among all member countries. However, consensus is more accessible than unanimity.

Bunn Nagara is a Senior Fellow at the Institute of Strategic and International Studies (ISIS) Malaysia.

Trade outcome vital to success of ASEAN Summit

March 18, 2018

Trade outcome vital to success of ASEAN Summit

by Mari Pangestu and Peter Drysdale
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Economists Dr Mari Elka Pangestu (above) and Dr. Peter Drysdale

Australia has been an ASEAN dialogue partner since 1974, an acknowledgement of the centrality of ASEAN to Australia’s regional security. There have been ASEAN summits with Japan, China, the United States and India but the ASEAN summit in Sydney this weekend is the first in Australia.

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The Host, ASEAN-Australia Special Summit 2018, Prime Minister Malcolm Turnbull

The summit comes at a time when leaders in ASEAN and Australia confront a number of strategic choices. None is more important than how they respond to the threat to the global trading system, the foundation of East Asia’s prosperity and a critical element in its security.

ASEAN centrality has been an organising framework for Asian economic policy cooperation over the past half century.

The retreat of the United States under President Trump from leading the global economic order; the rise of China with its assertive stance on the South China Sea and its infrastructure development ‘carrot’ in the Belt and Road Initiative; a putative ‘Quad’ configuration of Indo-Pacific power around the US, India, Japan and Australia; and the North Korea crisis all present significant challenges to ASEAN’s central role in the region.

Last week, Mr Trump fired the first shots in what could become a global trade war with the imposition of 25 per cent tariffs on steel imports and 10 per cent tariffs on aluminium. The action, taken under the Section 232 national security provisions of US trade law, risks provoking tit-for-tat retaliation by trading partners who, unlike Canada, Mexico and Australia, aren’t able to negotiate exemption from its impact. It also risks the WTO rules-based trading system.

Mounting uncertainty has affected confidence in trade and economic recovery since Trump translated his campaign protectionist rhetoric into an ‘America First’ agenda. But the White House announcement last week threw the international system into chaos. If Trump’s imposition of these tariffs on a flimsy national security pretext does not outright flout the rules of the WTO, then it at least flouts its widely shared norms.

The response from the European Commission was to ‘do the same stupid things to respond to stupid things’ — promising retaliatory tariffs on a range of US exports into Europe, from Harley-Davidson motor bikes to bourbon whisky. The tariff imposts also launched a process in which partners like Australia successfully begged exemption on various grounds both sound and spurious, all of which are in clear violation of the understanding that trade will be conducted under internationally agreed rules, not ad hoc bilateral deals. That’s the beginning of the rot; it may be a short-term tactical victory for countries like Australia, but it is not effective trade policy strategy.

What can be done now?

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Australia’s Prime Minister Malcolm Turnbull (R) waves with ASEAN leaders (L to 2nd R) Laos’ Prime Minister Thongloun Sisoulith, Indonesia’s President Joko Widodo, Cambodia’s Prime Minister Hun Sen, Brunei’s Sultan Hassanal Bolkiah and Thailand’s Prime Minister Prayuth Chan-O-Cha for a family picture at the ASEAN-Australia Special Summit in Sydney on March 17, 2018.

The strategic objective is to keep the WTO system alive in the face of a potentially mortal threat. The United States is playing itself out of the system. Learning to live without the United States as a rules- and norms-enforcer won’t be easy, but it is the only response that will protect the system and avoid the large-scale economic cost and the dangerous political consequences of an escalating trade war.

Asia’s response to the Trump trade threat is critical for the international system. Asia’s prosperity and political stability depends critically on its integration into the global economy through the rules-based trading system which has underpinned the growth of Asian interdependence, Asia’s economic prosperity and its political security.

China is in Trump’s cross hairs as ‘the cause of US trade deficits because of its violation of trade rules’. But China is also a crucial stakeholder in the rules-based system through its largely faithful observance of the protocols of its accession to the WTO in 2001 and the huge trade in Asia and around the world that has been built on that.

Locking in China’s entrenchment to the WTO system — and resistance to the temptation to take retaliatory actions in the face of Mr Trump’s trade antics — is thus a major element in the system’s defence.

As China and the US stare each other down with a potentially devastating trade war on the horizon, it may seem strange to turn to ASEAN, but it has a central role in the collective response to Asia’s present predicament. That is because of ASEAN leadership in the strategic conception and negotiation of the Regional Comprehensive Economic Partnership (RCEP) in East Asia.

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RCEP includes not only the ten ASEAN economies but also Japan, South Korea, China, India, Australia and New Zealand. It’s a coalition of countries with the economic weight to deliver a powerful message to the world. The signing of the Trans-Pacific Partnership agreement without the United States in Chile last week was a start in defence of the global trading system. But that agreement doesn’t include China or most of ASEAN and is not systemically important enough to make the difference. RCEP is.

The threat to the multilateral trading system is more important than the still unfinished business on the Korean peninsula and worries about the South China Sea.

ASEAN, with Indonesia at its core, is a regional enterprise with a distinctly global outlook and objectives. Intra-regional trade is only 24 per cent of ASEAN’s total trade but it is deeply integrated into trade globally.

The Australia–ASEAN summit is a singularly important opportunity for setting out strategic interests in these economic dimensions of regional security and ASEAN’s role in achieving them. A declaration from the Sydney summit that commits to avoiding retaliation to US protectionism and elevating the momentum in RCEP will help cement a broader coalition of Asian economies, including China, Japan, South Korea and India, to holding firm on the international trading system.

It will also ensure ASEAN’s continuing centrality in cooperation across the region.

Dr. Mari Pangestu is former Indonesian Trade Minister and Professor at the University of Indonesia. Dr. Peter Drysdale is Professor of Economics and Head of the Asian Bureau of Economic Research and Co-Editor of East Asia Forum in the Crawford School of Public Policy at the ANU. This article was also published in the Australian Financial Review on 15 March 2018.


Four Challenges for Australia–ASEAN Relations

March 16, 2018

Four Challenges for Australia–ASEAN Relations

by Anthony Milner, Asialink

Image result for asean-australia special summit 2018Sydney plays host to ASEAN-Australia Special Summit in 2018, 

ASEAN is back on Australia’s agenda. The media release for the 2017 Foreign Policy White Paper states that Australia’s first foreign policy priority is to ‘increase [its] efforts to ensure [Australia] remain[s] a leading partner for Southeast Asia’. At a time of deep uncertainty, engaging with ASEAN is a prudent policy direction. But Australia faces at least four challenges.

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First, the Australian government will struggle to maintain its priority on ASEAN. For some years, Australian commentary has been preoccupied with the US–China issue. The Australian government needs to explain that ASEAN is the central element in its overall Asia strategy, without implying that US–China issues are any less important. Deepening relations with ASEAN will make Australia a less lonely country and strengthen its influence in both Washington and Beijing.

Second, Australia is in some ways a less attractive partner for ASEAN than it once was. Compared with the 1970s — when Australia became ASEAN’s first dialogue partner — its economy is now far smaller than the ASEAN economy and its military advantage is also lessened. Not only are Japan and China massive economic partners for the region but South Korea — a minor economy in the 1970s — is now more important than Australia. The diminished position of the United States, Australia’s much-proclaimed ally, is a further element in this changed balance.

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Third, Australia needs to recognise and navigate differences between ASEAN and Australian policy objectives. For instance, there has long been anxiety in ASEAN about being forced to take sides in struggles between major powers. In the Cold War, a number of ASEAN countries resisted joining the US-led Southeast Asian Treaty Organisation and supported maintaining ‘equidistance’ between rival blocs. It is not surprising to encounter ASEAN concern about meetings between senior officials from Australia, Japan, India and the United States to discuss closer ‘quadrilateral’ cooperation. Such initiatives inevitably sharpen the sense of a pro-democracy gang-up on China.

Canberra needs to make it clear that its foreign policy has long been tailored to Australian rather than US interests — especially when the 2017 White Paper actually highlights the need ‘to broaden and deepen our alliance cooperation’.

For many years, Australia has focused on building ‘Pacific’ or ‘Asia Pacific’ institutions with a strong US presence. In contrast, ASEAN tends to favour an ‘East Asia’ concept and to concentrate on building the ASEAN community itself.

Today Australia’s advocacy of the ‘Indo-Pacific’ concept is causing confusion. The White Paper’s insistence that the Indo-Pacific is the region of ‘primary importance to Australia’ may seem a non-controversial innovation in Australia’s foreign policy rhetoric, but in Southeast Asia and China it is seen to diminish the term ‘Asia’ and imply an anti-China mindset.

There is sensitivity about terminology, partly because it can reveal serious policy orientation. It is regrettable that official Australian statements tend to refer to ‘Southeast Asia’, not ‘ASEAN’. Australia needs to emphasise that it is not hesitating on the project of building a strong ASEAN community.

A further divergence in policy of growing significance concerns China. ASEAN commentators seem less suspicious than Australians of China’s policies, including the Belt and Road Initiative. Informed by centuries of experience in handling China, ASEAN favours a policy of signalling support for China-led projects and only arguing hard about the details. ASEAN analysts do not advocate a subservient approach. They seek smart accommodation, not confrontation, with China.

In all these policy areas Australia will require a comprehensive and often subtle understanding of ASEAN perspectives. This raises the question of whether the government, media and university system still possess the level of Southeast Asia expertise achieved in the 1970s.

The fourth challenge that Australia faces with ASEAN concerns political culture. When Australian governments speak about ‘work[ing] more closely with the region’s major democracies’, they run up against the ideological tolerance that is a hallmark of ASEAN thinking. This tolerance underpinned, for instance, ASEAN’s rapid pursuit of relations with Communist Indochina after the United States’ withdrawal in the 1970s.

Australians do not reflect enough on how their liberal heritage may sharpen the sense of Australia being an outsider in many Southeast Asian eyes. Hostility to liberalism has been expressed not only in Islamic circles in Southeast Asia. Political change in Thailand and the Philippines suggests a reduced commitment to liberal values, and distinguished Singapore sociologist Chua Beng Huat has drawn attention to the determined rejection of Western-style liberalism in Lee Kuan Yew’s state.

A decade or so ago, Australian commentators thought they had heard the end of the ‘Asian values’ debate. As Australia works at being ASEAN’s ‘leading partner’, government officials and public intellectuals may well have to engage in more serious dialogue about values and ideology.

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Anthony Milner is Professorial Fellow at Asialink, University of Melbourne and Visiting Professor at the Asia-Europe Institute, University of Malaya. He is Emeritus Professor at The Australian National University.

This article appeared in the most recent version of East Asia Forum Quarterly, ‘Why ASEAN matters’.