Duterte as ASEAN Chair in 2017


November 20, 2017

Duterte as ASEAN Chair in 2017

by  Purple Romero

https://www.asiasentinel.com/politics/rodrigo-duterte-as-asean-leader/

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President Rodrigo Duterte, who took over the chairmanship of the Association of Southeast Asian Nations a year ago, is responsible for a decision to mute controversy over ownership of the South China Sea that has drastically changed ASEAN’s role in the resolution of the longstanding territorial dispute between its claimant-states and China.

Duterte’s year-long leadership of the 10-member pact was hardly a watershed. Overall, the Philippines did put ASEAN towards a more productive path on some points by steering clear of the more contentious issues of addressing human rights issues or giving claimant states much-needed regional support in their territorial conflict with China.

“Given ASEAN’s constraints and limitations, its modus operandi and increasing workload of consultations and discussions, it is difficult to see what else it [the Philippines] could have done within the one-year chairmanship that could make ASEAN more progressive and more productive,” said Jay Batongbacal, director of the UP Institute for Maritime Affairs and Law of the Sea.

 “It was enough for [the Philippines] to have been able to competently chair and host the meetings without potential serious controversies (particularly regarding the South China Sea and the Rohingya) paralyzing its processes.”

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On the issue of the South China Sea and China’s claim to virtually all of it via its so-called Nine-Dash Line, the events of the last year draw a clear contrast to previous actions. Two decades ago, the Philippines had to ask for the help of the Association of Southeast Asian Nations (ASEAN) over China’s reported military installations in Mischief reef, an atoll claimed by both Manila and Beijing.

ASEAN came to the rescue with a joint communique calling for a code of conduct in 1996, designed to set restrictions on the construction of buildings and military activity in the sea, which was being claimed by ASEAN members Malaysia and Brunei. Vietnam, another claimant, joined ASEAN later.

Fast forward to 2017. ASEAN, under Duterte’s chairmanship, and China has endorsed a framework for the code of conduct. It was Chinese foreign minister Wang Yi – and not ASEAN – which announced the adoption of the framework at the ASEAN Foreign Ministers’ Meeting in August.

Wang said both parties would discuss “the principles, and plan for the next stage of consultation of the COC” and build a “consensus.”

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ASEAN and China now have announced their commitment to negotiate, saying it “is important that we cooperate to maintain peace.” After 21 years since ASEAN first raised the need for a code of conduct, the negotiations will start next year.

It won’t ultimately show ASEAN’s unity. Ironically, even as it signals an important milestone in the history of resolving the maritime rows between China and clamant-states, it also cements the return to settling the territorial discord over South China Sea through bilateral talks – just the way China wants it.

Duterte’s pivot: Good to a point

As the height of irony, the first sign of the thawing of Manila’s cold relations with Beijing started when the Philippines won its dispute against the latter when an international court in The Hague struck down China’s nine-dash claim in July 2016, scoring a significant win for the Philippines which, devoid of military might, had to cast its lot in the international court of arbitration.

It was a historic win in a David-vs-Goliath scenario. But Duterte was quick to change the tone of the triumph, calling “on all those concerned to exercise restraint and sobriety” instead of celebrating the stunning rebuke to China.

There are two major explanations behind Duterte’s lackluster reaction. US President Barack Obama chastised the Philippine leader for alleged human rights violations allegedly committed under Duterte’s violent and murderous war on drugs, sparking a furious response from Duterte, who responds to criticism of his actions with hair-raising rhetoric.

But in addition, Duterte has always maintained that the Philippines is no match for the military and economic superpower China and that as an Asian neighbor it is in the Philippines’ interest to make its own pivot.

That is a mantra that defined the Philippines’ ASEAN chairmanship. And, while it marked a shocking turnaround for the Philippines – which used to be counted on as one of the most aggressive and vocal ASEAN-member states in its opposition to China’s expansionism in South China Sea – it did help keep China at the negotiating table until a framework on the COC was finalized.

“The Duterte administration’s ‘softly’ approach on its disputes with China in South China Sea permitted the framework agreement to be realized,” said Malcolm Cook, Senior Fellow at the Institute of Southeast Asian Studies (ISEAS)-Yusof Ishak Institute.

Prior to Duterte’s reign, his predecessor Benigno Aquino III explored different ways to strengthen the position of the ASEAN claimant-states. The Philippine Department of Foreign Affairs proposed a Zone of Peace, Freedom and Cooperation in the South China Sea in 2011 to enclave the Spratly and Paracel islands and turn them into a Joint Cooperation Area.

The proposal, however, did not gain much support from other ASEAN members. The following year, China and the Philippines would engage in a standoff in the Scarborough Shoal, pushing the Philippines to consider taking the legal route – and eventually winning – against China.

ASEAN, however, was divided over the Philippines’ victory in 2016.  While Vietnam lauded it, Cambodia – which considers China a major economic ally – objected to it being referenced in the joint communique at the 2016 ASEAN Foreign Ministers Meeting in Vientiane, Laos, resulting in the first time the organization failed to agree on a joint communique.

When the Philippines chaired ASEAN in 2017, it adopted Cambodia’s stance, negating the mention of Manila’s momentous victory in any forum involving ASEAN and China. The Philippines took that a step further by opposing the inclusion of any objection to China’s alleged militarization and land reclamation in South China Sea in the joint communique in August.

In the ASEAN Regional Forum in August 2017, Philippine foreign affairs Sec. Alan Peter Cayetano admitted that the Philippines wanted references to land reclamation and militarization in South China Sea dropped in the joint communique, forcing Vietnam into a corner. “They’re not reclaiming land anymore, so why will you put it again this year?” he said.

In the end though, consensus prevailed and the chairman had to give in. The Philippines withdrew its opposition and the joint communique contained language showing concerns over China’s reported militarization and land reclamation activities.

But up until the 31st ASEAN Summit in November, even as the Philippines was caught in another standoff –   albeit briefly – with China in Thitu (Pag-asa) island, the Philippines was still generally cordial in its approach.

The most that Duterte did is to bring up with China the concerns of ASEAN about freedom of navigation in the strategic trade route, which China said it wouldn’t impede.

 “The warmer ties between Philippines and China, combined with the chairmanship of the Philippines, were instrumental in drawing down the prominence of the (South China Sea) SCS disputes on the ASEAN agenda, from being a divisive issue in 2013 into a practically peripheral matter in 2017,” Jay Bongalo, director of the UP Institute for Maritime Affairs and Law of the Sea said.

“This will allow ASEAN to essentially remove the controversial aspects of the SCS issues from its agenda, move on from playing any really significant role in the resolution of the territorial and jurisdictional rows, and allow the ASEAN claimant countries to deal with their respective issues bilaterally with China.”

Even if the Philippines was able to get the negotiations on the COC going, ASEAN as whole and at its best, will now largely focus on crisis management or prevention. When it comes to resolving territorial tiff, each country will now be left on its own – a crucial victory for Beijing.

 ASEAN’s expected “lowest point:” human rights

In the 31st ASEAN Summit, allegations by a long list of human rights organizations over violations and extrajudicial killings in the Philippines were brought up by the US (though this was denied by the Philippines), Canada and New Zealand, countries that are external partners of ASEAN, but not by ASEAN members themselves.

The Philippines, which decried any criticism over the issue from other countries, was also silent on another human rights concern, the plight of the Rohingya in Myanmar. The Rohingya ethnic group had to flee the Rakhine state in Myanmar due to cases of persecution and discrimination.

This was a curious reaction as Duterte appeared sympathetic to the state of refugees from the Middle East, even saying that they are welcome to the Philippines. In the case of the Rohingya however, the Philippines drew the line when it did not mention the “Rohingya” in its statement at the UN General Assembly in New York in September. This was challenged by Malaysia, which slammed the statement as a “misrepresentation of reality.””

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Malaysia has yet to find an ally from ASEAN. At the ASEAN defense ministers’ meeting, Philippine Defense Sec. Delfina Lorenzana said that ASEAN agreed the Rohingya problem is an “internal matter” in Myanmar.

ASEAN’s hands-off attitude over the human rights problems in the Philippines and Myanmar were to be expected, however according to political analysts given the body’s principle of non-interference.

“ASEAN’s handling of the most prominent human rights issues such as the Rohingya crisis and the drug-related killings in the Philippines are definitely the lowest points in its performance,” Batongbacal said. “However, this is to be expected given ASEAN’s non-interference principle and reluctance to discuss human rights issues, as both directly involve the domestic policies of member-states.”

Malcolm agreed, saying ASEAN’s hands are further tied by its principle to act based on consensus. While saying that ASEAN’s response to the reported human rights violations in the Philippines and Myanmar were far from sufficient, one should not expect much from it.

“As ASEAN is an inter-governmental, consensus-based body, one should not expect much from ASEAN in relation to human rights abuses undertaken by member-states,” Malcolm said. “Quiet diplomacy and moral suasion is the best ASEAN will do in this front.”

There’s one bright spot, however when it comes to ASEAN’s action on rights – and that is the signing of the ASEAN Consensus on the Protection and Promotion of the Rights of Migrant Workers. The agreement, which gives allows migrant workers to form unions apart from enjoying other rights, came 10 years after ASEAN member-states adopted the Declaration on the Protection and Promotion of the Rights of Migrant Workers in Cebu, Philippines.

United against extremism

ASEAN, while divided on a number of issues, was united when it comes to tackling terrorism, a problem faced by the Philippines, Indonesia and Malaysia. The Philippines in particular just ended a five-month siege in Marawi city, Mindanao which was caused by the ISIS-inspired Maute group.

ASEAN said it will take on additional preventive measures to stop the growth of terrorism in the region. These include education and enlisting the help of the women and youth sector to counter extremist leanings.

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When it comes to another threat to security, however – the nuclear ambition of North Korea – ASEAN, while one with the rest of the international community in condemning its launching of intercontinental ballistic missiles, did not go as far as asking its member-countries to cut ties with North Korea.

“Cambodia and Laos in particular have close relations with North Korea and this has not changed despite the focus on international pressure in North Korea,” Malcolm said.

In trademark ASEAN diplomacy, the regional bloc also kept its doors open to North Korea in the ASEAN Regional Forum (ARF). The ARF has previously been touted by ASEAN as a venue for the six-party talks between North Korea, South Korea, the US, Russia, China and Japan.

 Not paralyzed by controversy

Under the Philippine chairmanship, Malcom said ASEAN gained some headway when it comes to trade, signing the ASEAN-Hong Kong, China Free Trade Agreement (AHKFTA) and the ASEAN-Hong Kong Investment Agreement which could spur business opportunities in the region. The regional bloc has yet to gain significant progress though in the negotiations on the Regional Comprehensive Economic Agreement, which aims to lower tariffs and strengthen regional economic integration and cooperation.

Batongbacal said that ASEAN also deserved some plus points for putting the spotlight on the role of micro, small and medium economic enterprises in economic growth.

Toward a People-Centered ASEAN Community


November 19, 2017

Toward a People-Centered ASEAN Community

by Moon Jae-in
http://www.project-syndicate.org

In the 50 years since the founding of the Association of Southeast Asian Nations, almost all of Asia has been utterly transformed. ASEAN’s contributions to harnessing and spreading economic dynamism have been essential to the region’s success.

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ASEAN TIES. South Korean President Moon Jae-in speaks at ASEAN-South Korea 2017 Summit in Manila recently.

SEOUL – I am delighted that my first meeting with the leaders of the Association of Southeast Asian Nations comes at a historic moment: the 50th anniversary of ASEAN’s founding. During those 50 years, not only my country, the Republic of Korea, but almost all of Asia has been utterly transformed. ASEAN’s role in harnessing and spreading economic dynamism has been essential to the region’s success.

For Korea, ASEAN has undoubtedly been a special and valued friend. Last year alone, some six million Koreans visited ASEAN member states, both as tourists and for business. Approximately 500,000 citizens of ASEAN member states now live and work in Korea, while roughly 300,000 Koreans live and work in ASEAN countries.

This is one example of why Korea’s ties with ASEAN are more than just intergovernmental relations. Our relationship is deepened in the most personal way possible, through the intertwining of so many individuals’ lives.

This fact should not surprise anyone. ASEAN 2025: Forging Ahead Together, which was endorsed by ASEAN leaders at their 27th Summit in November 2015, states that the group strives to be a “people-centered, people-oriented community” that seeks to build a caring and sharing society which is inclusive and where the well-being, livelihood, and welfare of the people are enhanced.

“People first” has been my longstanding political philosophy as well, and it is a vision in line with the spirit of Korea’s “candlelight revolution” that lit and heated up the winter in Korea a year ago. Korea and ASEAN share a common philosophy that values people, and that shared outlook will set the path that Korea and ASEAN take together in the years and decades ahead.

Since 2010, Korea and ASEAN have made significant strides together as strategic partners. Korea-ASEAN cooperation so far, however, has remained focused mainly on government-led collaboration in political, security, and economic affairs. I intend to help advance Korea-ASEAN relations while placing a high priority on the “people” – both Koreans and the people of ASEAN. My vision is to create, in cooperation with ASEAN, a “peace-loving, people-centered community where all members are better off together.” This can be summed up in “three Ps”: People, Prosperity, and Peace.

To realize this vision, I will pursue “people-centered diplomacy.” So, from this point onward, cooperation between Korea and ASEAN will be developed in a way that respects public opinion among all of the peoples of our association, gains their support, and invites their hands-on participation.

To this end, and in commemoration of ASEAN’s 50th anniversary, we have designated this year as “Korea-ASEAN Cultural Exchange Year,” and actively promoted various cultural and people-to-people exchanges. Last September, the ASEAN Culture House (ACH) opened in Korea’s southern port city of Busan. The ACH is the first of its kind to be opened in an ASEAN dialogue partner country, and it is expected to serve as a hub for cultural and people-to-people exchanges between Korea and ASEAN members. The Korean government will spare no effort to expand these exchanges, especially among the young people who will lead Korea-ASEAN relations in the future.

We should also work to build a community of peace where people are safe. In Asia, we all are facing the threat posed by North Korea’s nuclear weapons and missiles, as well as non-traditional security threats, including terrorism, violent extremism, and cyber-attacks on our businesses, our social and civic infrastructure, and our official institutions. The Korean government will strive to ensure that both Koreans and the people of ASEAN are able to lead happy and safe lives, which means cooperating with all ASEAN member states, at both the bilateral and multilateral level, to overcome the security challenges that we jointly face.

Finally, I will endeavor to promote greater mutual prosperity, which benefits citizens of both ASEAN and Korea. To ensure the sustainability of people-centered cooperation, all countries in the region must grow and develop together. Creating a structure for mutual prosperity requires lowering regional and transnational barriers to facilitate the flow of goods and promote people-to-people interactions. In short, ASEAN’s dynamism must now be tied to its inclusiveness.

That is why Korea will actively support the “Master Plan on ASEAN Connectivity 2025” and “Initiative for ASEAN Integration (IAI) Work Plan,” both of which call for enhancing the connectivity between ASEAN economies and citizens. We will also accelerate the pace of negotiations for the further liberalization of a Korea-ASEAN Free Trade Agreement (FTA), in order to pave the way for freer and more inclusive growth in the region.

Korea is now preparing for yet another “hot” winter: the PyeongChang Olympic and Paralympic Winter Games, to be held in February 2018. Our preparations are focused on ensuring that these Games deliver a message of reconciliation, peace, mutual understanding, and cooperation throughout the world.

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I happily invite you all to discover a peaceful and joyous winter in PyeongChang, and experience the dynamism sweeping through Korea and ASEAN. Don’t miss an opportunity to find out and enjoy what Korea and ASEAN share in common.

Moon Jae-in is President of the Republic of Korea.

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.

Regional Comprehensive Economic Partnership (RCEP) is the way forward for ASEAN


November 2, 2017

Regional Comprehensive Economic Partnership (RCEP) is the way forward for ASEAN

by M. Chatib Basri, University of Indonesia

http://www.eastasiaforum.org

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The success story of the East Asian economy was about the connection between trade and industrialisation — look at the cases of Japan, South Korea, China, Taiwan and Singapore. Trade-oriented industrialisation drove regional economic integration in through trade and investment — and integration into the world economy that was made possible by conducive global economic growth and a relatively open global economy.

 

Unfortunately, the party is now over. Many economists are beginning to talk of a ‘new normal’ global economy with slower growth and trade. Brexit, the ascendency of US President Donald Trump and anti-immigration sentiment all point to a growing resistance to globalisation. At the March 2017 G20 meeting in Germany, even finance ministers and central bank governors backed away from agreement on support for free trade and investment.

It’s premature to conclude that the world has fully embraced protectionism, but the conditions for trade liberalisation and negotiating trade agreements are tougher than they were. Economic recovery in the United States and some parts of Europe remains fragile, and China’s growth though robust is also on the wane. Against this ‘new normal’ backdrop, what can ASEAN countries do to counter this trend and mitigate its impact? What role can regional cooperation play in addressing these emerging challenges in the global trade and investment environment?

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Slowing economic growth will impact on job creation, and ASEAN nations cannot afford slow economic growth — more jobs are essential to win the fight on reducing poverty.

ASEAN and East Asia must continue to encourage economic growth to improve the socio-economic welfare of their citizens. Even though global growth  is sluggish, East Asian economies still have relatively high growth. The potential is there. East Asia must strive to achieve it growth potential.

Fiscal expansion is one possible solution for those countries that have the fiscal space — though that’s a luxury afforded to few countries in ASEAN. Room for monetary expansion is also limited due to the growing possibility of the normalisation of US monetary policy.

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Forcing the pace on continued structural reform is where progress is vital. But structural reform is much easier said than done. Further unilateral liberalisation is not easy when the rest of the world is consumed by creeping protectionism, and the progress of a multilateral agenda is still in limbo as the WTO’s Doha Round seemingly goes nowhere.

A more feasible way forward is a combination of structural reform and the revitalisation of regional cooperation.

Pursuing openness through regional economic integration will not be easy. The trend towards deglobalisation demonstrates that the original model of globalisation — rapidly reducing the barriers to trade of goods and services trade— does not have strong political backing. It’s clear that economic reform and trade liberalisation need now to be accompanied by policies that ensure that ‘losers’ in realising the overall gains from trade are effectively compensated. Where distribution of the gains from trade has not been attended to, globalisation’s positive impact has found less support among the people and political will for it has waned. A consequence is the pockets of deep political resistance to globalisation.

Restoring trust in globalisation is now a primary goal. This can be done by highlighting globalisation’s success stories and its direct and positive impact on people’s lives. The success of reform does not hang on the merits of the reform’s agenda, but rather on political support — an intrinsic dilemma of reform is that the cost is more immediate and concentrated and the benefit is more diffuse and long term. This makes it necessary to get ‘quick wins’ or success stories to ensure political support.

These circumstances underline the need for multi-stage regional cooperation. This can start slowly and then tackle more complex issues. For example, instead of negotiating over how to lower trade barriers, negotiations can start on issues related to connectivity and capacity building. These objectives are acceptable politically by nearly all member countries and can be economically beneficial. Revitalising the ASEAN infrastructure fund is another example of a ‘low hanging fruit’ in regional cooperation.

If this kind of cooperation can be carried out, people will feel its real impact of regional cooperation and ASEAN states can move forward with a more complex agenda for economic integration.

The Regional Comprehensive Economic Partnership (RCEP) fits the bill and can now be brought into play. The Trans-Pacific Partnership (TPP) is practically dead in the water since the United States withdrew. RCEP is the only way forward. RCEP provides an ongoing framework through which to promote open regionalism and an open international economy. RCEP is important for ASEAN as an initiative that was put forward when Indonesia was the chair of ASEAN in 2011 — not a Chinese initiative as some wrongly believe.

As the global economy and the support for globalisation both languish, ASEAN nations need to act immediately to preserve the economic order that gave East Asia such prodigious development. RCEP offers a practical way forward in global trade diplomacy — and ASEAN would be remiss not to pursue it fully at a time when it’s important to our global economic future.

Chatib Basri is a Senior Lecturer at the Department of Economics, University of Indonesia and formerly Indonesia’s minister of finance.

 

The Worldview from Cambodia


October 3, 2015

The worldview from Cambodia

by Chheang Vannarith

http://www.khmertimeskh.com/5083558/the-worldview-from-cambodia/

The Cambodian government, under the leadership of the Cambodian People’s Party (CPP), is striving to adjust its foreign policy and adapt itself to the fast-changing global geopolitics and geo-economics.

Addressing the 72nd Session of the United Nations General Assembly, Cambodian Foreign Minister Prak Sokhonn underlined two key terms: multipolar world and complex interdependence.

“Today, our multipolar world has gained its prominence in global affairs, causing chaos and turbulence as competition between the major powers is becoming more confrontational,” Mr Sokhonn said.

“We are more interdependent, but more unequal; we are more prosperous, and yet millions are inflicted with poverty,” he added.

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In terms of the global economic system, there are more than two growth poles. A growth pole refers to an economy that significantly drives global growth, mainly through international trade and investment, capital flows and the spillover effects of innovation, technology and knowledge.

Emerging economies, especially BRICS economies including Brazil, Russia, India, China and South Africa, are transforming the global economy. The Asia Pacific region has become the centre of gravity of the world economy.

The China-proposed Belt and Road Initiative (BRI) is the new engine of an emerging new global economic order. The BRI will also significantly affect the global geopolitical landscape. The question is time. How long will it take China to realise this grand strategy to project its global power?

Global power shifts or transitions, as historical facts have shown, usually lead to conflicts or wars. According to the “Thucydides Trap” theory, it is forecast that China, the rising power, and the US, the status-quo power, will inevitably clash.

How can the “Thucydides Trap” be avoided? China has proposed “a new type of major power relations”, but it failed to convince the US. Trust deficit is the main stumbling block in China-US bilateral ties.

The West is relatively declining. The two black swan events, the Brexit vote in the UK in June 2016 and the election of Donald Trump to the White House in the US in November 2016, have damaged the global role and image of the West.

The Western values of liberal democracy are adversely affected as well. President Trump has attacked the freedom of the press by calling them “fake news” and alleged some journalists as “truly dishonest people”.

Rising protectionism and inward-looking political leadership puts the future of the West in an uncertain and dangerous path. Widening socio-economic inequality is partially due to the implementation of Anglo-Saxon capitalism, in which corporate governance is focusing on shareholders, not stakeholders.

Amidst global power shifts, Cambodia is softly going with China, while slightly hedging through a strategic and economic diversification strategy. The good Cambodia-Japan partnership is a case in point explaining Cambodia’s hedging strategy.

There are three reasons explaining Cambodia’s view of China. First, China gives a core “back up” to Cambodia’s ruling elites to counterbalance the pressures from the US and its allies relating to democracy and human rights.

The ruling CPP gives priority to output legitimacy, which is defined in terms of peace, political stability and economic growth than input legitimacy, which is defined in terms of free and fair elections and people’s participation.

Hence the ideals of liberal democracy as understood and practiced by the West are deemed not yet appropriate for Cambodia. Power politics, the survival of the fittest, remain the characteristics of Cambodian politics

Second, Cambodia stands to benefit from China’s economic powerhouse, especially in infrastructure development, foreign direct investment, tourism and trade. China is now the top donor and investor in the kingdom.

Third, China offers an effective balancing force against two big neighbours – Thailand and Vietnam – which are perceived as “historic predators”.

Cambodia “views its immediate neighbours, Vietnam and Thailand, as historic predators of Khmer territories, and China as playing a pivotal role in ensuring its own survival”, wrote Edgar Pang, a visiting fellow at the ISEAS-Yusof Ishak Institute in Singapore.

Similarly, Terrence Chong, from the same institute, argues that “Cambodia’s fear that Vietnam and Thailand’s growing economic superiority will threaten its sovereignty has been a key reason for its embrace of China”.

Cambodia believes that complex interdependence, especially economic interdependence, will prevent major powers from going to war. Economic interest is the most decisive factor in foreign policy formation.

Prime Minister Hun Sen said in 2015: “Relations between the US and China are extremely important for the Asia-Pacific. Washington and Beijing are conscious of their complex interdependence and have been building mechanisms across their bilateral relationship to help manage their relations.”

Cambodia also stresses the critical role of ASEAN in maintaining regional peace and order by strengthening regional multilateral institutions and cooperation. Maintaining and strengthening the central role of ASEAN in shaping the evolving regional architecture serves regional common interests.

“Cambodia will continue to join hands with all ASEAN member states in the common endeavour to strengthen the community that is highly integrated, resilient, inclusive, people-oriented and people-centered for the sake of peace and prosperity of our region and the world at large,” wrote Mr Sokhonn in August this year.

Cambodia’s worldview can be understood as the following: First, a multipolar world is in the making. Second, the West is declining and the global power balance is shifting in favour of emerging economies, especially China.

Third, complex interdependence is the foundation of peace given it restrains major powers from going to war against each other. Fourth, multilateral institutions, especially Asean, play a crucial role in maintaining peace and promoting prosperity.

Chheang Vannarith is a Visiting Fellow at ISEAS – Yusof Ishak Institute in Singapore.

North Korea: Dealing with the “Rocket Man” via Negotiation, not Threats


September 20, 2017

North Korea: Dealing with the “Rocket Man”via Negotiation, not Threats

by Editorial Board, East Asia Forum

http://www.eastasiaforum.org

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War? “Look at the Map”, says French President Emmanuel Macron in an interview with CNN’s Christiane Amanpour at United Nations, New York

The North Korean nuclear threat has ratcheted up in recent months, following new rounds of missile and nuclear weapons tests by Pyongyang. In July, North Korea undertook two tests of an intercontinental-range ballistic missile (ICBM). Then on 3 September, it undertook its sixth nuclear test of a new thermonuclear bomb designed to be used with its ICBMs. US President Donald Trump responded to the ICBM tests by promising to deliver ‘fire and fury’ if North Korea again threatened the United States, to which North Korea responded in turn by threatening to deploy missiles into the seas near US military bases in Guam. And in the midst of all this, Pyongyang continued to unnerve the Japanese government and population by launching two ballistic missiles into the seas beyond the island of Hokkaido.

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The “Rocket Man” says to President Donald Trump: “Show me some respect. I am the leader of North Korea,an independent and sovereign nation. My duty is to protect my people from warmongers like you and to act in the best interest of my country. Aren’t you doing the same for your people when you say to the world, “America First”?

North Korea’s most recent tests and launches are significant. Like it or not, they demonstrate that the regime has crossed the technical threshold of being able to target the continental United States — as well as US allies in Asia — potentially with a nuclear warhead.

Throughout the growing crisis, the Trump administration — along with most of the international community — has viewed China as the key player in bringing North Korea to heel. This perception of China’s special leverage stems from China’s decades-old treaty of friendship and mutual assistance with the North Korean regime and, even more importantly, the fact that around 90 per cent of North Korean trade now takes place with or through China. Given North Korea’s near total dependence on China for its international economic ties, the United States and others have consistently called for China to tighten economic sanctions.

China had resisted tightening sanctions on North Korea for fear that economic pressure could prompt massive inflows of refugees into China’s Northeast, or even the collapse of the North Korean regime. Although North Korea remains China’s most troublesome and unpredictable neighbour, it also serves as a strategic ‘buffer’ between China and US forces stationed in Japan and South Korea.

Yet a combination of growing international pressure, and Beijing’s own frustration with Pyongyang over its unwelcome nuclear program, has made China more willing to apply sanctions and other economic measures. In February, in the wake of North Korea’s test of a short-range missile into the Sea of Japan, and the assassination in Malaysia of Kim Jong-un’s half-brother, China announced it was suspending coal imports from North Korea for the remainder of 2017. More significantly, on 11 September China (and Russia) agreed to a new round of UN Security Council sanctions which will ban North Korean textile exports, freeze its imports of crude oil at current levels and introduce a cap on its imports of refined petroleum. These are the most far-reaching sanctions that have so far been applied to North Korea. In addition, Chinese state-run banks have begun to ban North Koreans from opening new accounts and to suspend transactions on accounts already held by North Koreans.

Yet the key problem in all of this is that there is little evidence that sanctions applied in the past have worked in checking North Korea’s nuclear program. Most regional analysts are fairly pessimistic that even this latest round of sanctions will have much effect on the regime’s nuclear development plans.

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In our two lead pieces this week, Chen Dongxiao of the Shanghai Institute for International Studies, and Jia Qingguo of Peking University, underscore the urgent need for new thinking in managing the North Korean nuclear issue. Both highlight diplomatic engagement, with Pyongyang and among other key states in the region, as the only way forward.

Chen suggests that it is futile to hope that increased Chinese pressure will somehow encourage North Korea to relinquish its nuclear weapons. He underlines Pyongyang’s lack of regard for China’s interests to date, suggesting that, ‘Pyongyang will never shy away from pressing for more concessions by leveraging its nuclear weapons program, even at the expense of China’s national security interests and overall regional stability’.

Instead, the region must find new diplomatic and economic incentives to encourage Pyongyang to come back to the negotiating table. As a first step, both authors nominate China’s ‘two suspensions’ proposal as a way to reduce the dangerous tensions between Pyongyang and Washington. This proposal would see ‘North Korea…suspend nuclear and missile tests in exchange for suspension of joint US-South Korea military exercises’, explains Jia.

As a second step, Jia calls on Beijing to begin active ‘contingency planning’ talks with Washington and Seoul. In the past, Beijing has been hesitant to take part in such talks, out of concern for the signals that this would send to Pyongyang. Jia and Chen carry clear messages for Pyongyang and Washington. Given the gravity of the situation and the risk that North Korea may continue to ignore Beijing’s diplomatic efforts, it is now time for China to put aside its hesitation and engage in serious talks with Washington and Seoul, Jia argues.

Contingency planning talks should cover a range of critical issues including: who would control North Korea’s nuclear weapons arsenal in the event of a collapse of the regime; how to deal with the North Korean refugee problem; who would be responsible for restoring domestic order in North Korea in the event of a crisis; post-crisis political arrangements on the Korean Peninsula; and removal of the Terminal High Altitude Area Defense (THAAD) system when and if North Korea’s nuclear program has ended.

Each of these issues is a source of considerable anxiety in Beijing, and so far they’ve stymied closer regional cooperation on the North Korean nuclear issue. Indeed, these issues have, in Chen Dongxiao’s words, showcased the ‘deeply entrenched strategic suspicion’ between the US and China. Dialogue and negotiation on these questions may therefore help to alter the current impasse between China and the United States, and lessen Pyongyang’s ability to exploit the lack of unity among its neighbours.

As is now widely understood, both in Pyongyang and around the region, there are no good military options for resolving the North Korean nuclear issue. That will crucially require countries to get much better at talking to their adversaries and negotiating on fundamental, long-term political and security questions.

The EAF Editorial Board is comprised of Peter Drysdale, Shiro Armstrong, Ben Ascione, Amy King, Liam Gammon, Jillian Mowbray-Tsutsumi and Ben Hillman, and is located in the Crawford School of Public Policy in the ANU College of Asia and the Pacific.