KayJay on ASEAN beyond 50


August 17, 2017

KayJay on ASEAN beyond 50

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As ASEAN celebrates its Golden Jubilee, it is opportune for us to take a step back and ask our people what they want of the regional bloc in the next 50 years before striving forward together as one community.

THERE has never been a better time to examine ASEAN as a regional bloc, how far we have come and where we are heading next. It has been exactly 50 years since ASEAN was formed and since then, this regional bloc has never been stronger and more prominent in the global stage.

Malaysia will always be a pro-active member of ASEAN and other multilateral organisations. Our success story as a nation has been predicated upon the stability provided by a multilateral framework. Malaysia as a country is one that reaches beyond its potential and one that has always set its sight on the distant future. For that reason, we must be integrated into a region that is greater than the sum of its parts.

The past is prologue while the future is ours to shape. While taking lessons from the past, we must continue the work of building the future.

Immediately after the 1969 riots, Malaysia embarked on the New Economic Policy, which was to be a new deal for Malaysia in eradicating poverty and rebalancing the economic distribution in the country. Thirty years later, that was followed by Vision 2020, which would leapfrog Malaysia to a country that is modern and developed.

As we are nearing 2020, it became imperative for us to ask ourselves “what’s next?”. The world in 2050 will be much different from the world today – what will guide us to face this future?

This is I have been tasked to reach as many youths as possible to get their aspirations of what they want to see the nation be in the future, to be recorded in a massive plan called the National Transformation 2050 (TN50).

TN50 is an initiative to plan for the future of Malaysia in the period between 2020 and 2050. From the vision of becoming a developed nation, we should strive to be among the top countries in economic development, citizen well-being and innovation.

For this, I’ve spent the first six months of 2017 traveling through all corners of Malaysia, reaching out to more than one million youths and what they aspire for. Most of them coalesce around wanting a future that is fair, sustainable, competitive, united and happy.

What that means is we want a future that goes beyond the old measurement of GDP growth as an indicator of success to one that looks at well-being more comprehensively. One that looks into wealth and income inequality, healthcare, access to quality education, environmental protection, a good standard of living, integrated public transport, sporting achievement, civic consciousness and greater investments into scientific research, among many others.

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With shared dreams come shared responsibility – and nothing binds a society better than having a common weight on their shoulders. Similarly, as ASEAN heads towards 2050, it is opportune for us to take a step back, ask our people what they want of ASEAN in 2050 and then strive forward together as one community.

The challenge of automation and robots, the need for a differently-skilled and adaptive workforce, the breakdown of societal fabric into smaller family units, the shifting powerhouses in global trade and many other challenges await us in the near horizon.

Though individual countries are looking at these in their own way, there are many areas we can embrace together, leveraging on individual strength to compensate for individual weaknesses, so ASEAN can future proof the region and truly become a global powerhouse in the next 33 years.

What would we like ASEAN to be in the next decade, or five decades? The current generation entrusted with the responsibility to shape the future of ASEAN would like to see an ASEAN that will be able to realise all of its potential. An association consisting of 10 sovereign high-income nations fully developed with prosperity for all. It is indeed a tall objective, but not an impossible one, for ASEAN is a work perpetually in progress passing from one generation to the next, a sacred trust to be upheld.

I am an optimist on the future of ASEAN and I am a firm believer in its role as the catalyst for peace and prosperity in this region. Our fate in ASEAN has been pre-determined by our geography. As the saying goes, we can choose our friends but we cannot choose our neighbours.

The success of one nation in the region will have a positive bearing on all, while the failure of any will have a calamitous effect on all. ASEAN’s future is in its togetherness. We can either leverage on our collective strengths to soar together towards greater heights or go separately to face a more dangerous and challenging world.

Economically, we must continue to build upon the ASEAN Economic Community. More integration is needed, not less. By all means draw lessons from Brexit but the right ones not the wrong ones. We must be serious to further bring down barriers to trade both tariff and non-tariff.

We must work to better integrate our economy and welcome investments, ease the process of doing business, and protect intellectual property while better leveraging our various competitive advantages. Healthy competition coupled with pragmatic cooperation must be the way forward.

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ASEAN leaders must focus on good governance, fight corruption, end crony capitalism and work for peace, stability and development with equity. Make ASEAN relevant to the lives of Southeast Asians. That means more action and less talk.–Din Merican

We must work to make ASEAN more relevant to the needs of members and the challenges that they are facing, be it political, security or economic. ASEAN will continue to thrive, despite its many challenges, if every member perseveres to make it a national priority; for the national interest of each member could only be advanced effectively through ASEAN collectively.

The first 50 years is coming to an end, so let us now turn the work at hand to the next 50 years dedicating it to the future generation. Let us continue to build on the dreams of the founding fathers of ASEAN who started a journey so improbable that they themselves in their wildest imaginations never could have thought how successful it would eventually be.

That 50 years later, we are marveling at their collective wisdom in every capital of a united ASEAN is the most fitting tribute of all to this greatest and most enduring of endeavours.–by Khairy Jamaluddin

Khairy Jamaluddin is the Youth and Sports Minister. The views expressed here are entirely the writer’s own.

Manila’s pivot to pragmatism on the South China Sea


August 14, 2017

Manila’s pivot to pragmatism on the South China Sea

by EAF Editorial Board

http://www.eastasiaforum.org

The Philippines is at the frontline of China’s entry into a strategic theatre in Asia that has been dominated by the United States since World War II. Its experience of China’s rise is a sometimes fraught daily reality.

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In disputed South China Sea territory, episodes like the standoffs between military personnel on remote reefs, tiffs over fishing rights, and brinkmanship over ‘red lines’ like the Scarborough Shoal are a reminder of the importance of the waters to the west of the Philippine archipelago.

The Philippines’ handling of China’s rise holds lessons for other countries sandwiched between Beijing’s provocation and US pressures.

For one thing, the Philippines might offer lessons in how to ‘compartmentalise’ different aspects of the relationship with China, as Aileen Baviera suggests in this week’s lead article. Despite immense tensions inherited from the Aquino administration, the government of Rodrigo Duterte has forged a path that might allow his country to benefit from economic engagement with China, while continuing to speak up on issues of national security and integrity.

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First and foremost is Manila’s acknowledgement that, like it or not, the strategic status quo in the South China Sea has changed — and its own policy must reflect the new reality. The Aquino government’s commitment to using the instruments of international law was laudable. And Aquino’s stance may have gained some ground in the face of hard power realities. But in the face of Chinese determination, and inconsistent US policy, Duterte has taken a different approach.

‘Duterte’, writes Baviera, ‘has downplayed maritime disputes in favour of pursuing close economic and political ties with China’. The President, tired of megaphone diplomacy’s interfering with his goal of maximising the economic benefits of the China relationship, has agreed to leave the territorial disputes at a stalemate while he develops the bilateral economic relationship.

Such pragmatism has come from a curious, and indeed unlikely, source in Duterte. He is a strongman populist who is eroding Philippine institutions, favours brutal solutions to domestic social problems, and, on the surface, possesses an unsophisticated understanding of international affairs. Part of his rapport with China is presumed to stem from a shared disdain for Western preoccupations with human rights.

But Duterte’s preoccupation with policy ends — and disregard for the niceties of the means — may end up serving the Philippines well when it comes to the China relationship.

A mutually acceptable resolution of South China Sea disputes looks likely to entail a boost in Chinese aid and infrastructure investment, which the Philippine economy could use to maintain its healthy growth momentum. As Baviera notes, ‘China now sees the Philippines as a welcome partner in its Asian Infrastructure Investment Bank and the Belt and Road Initiative’. China has responded appreciatively, desisting from further provocations such as beginning construction activities on the disputed Scarborough Shoal.

The pivot to pragmatism from Manila has also had positive spillovers for ASEAN, a central player in any sustainable settlement between China and regional states over the South China Sea. Instead of undermining regional resolve on territorial issues, ‘Duterte’s China policy shift also reduces disagreement within ASEAN over the handling of the disputes’, and ‘forces some of the other stakeholders who were formerly free-riding on Philippine efforts to do more on the issue, thus easing pressure on the Philippines’.

This dynamic makes the formation of a common ASEAN position more likely: polarisation and provocation on the part of one aggrieved member state can spell doom for ASEAN’s ability to work towards consensus and retain its relevance on South China Sea disputes.

Signs of ASEAN consensus appeared in May, when the ASEAN states and China agreed on a framework for a Code of Conduct on the South China Sea. Though the Code of Conduct is not yet a done deal, the more a durable solution to conflict in the South China Sea has credibility as a product of a multilateral Southeast Asian consensus, the better.

But, as Baviera concludes, the key ingredient is whether China will reward a more nuanced Philippines position with accommodations of its own. The opportunity for de-escalation of tensions, allowing for a sustainable resolution to the South China Sea issue and enhanced trust among Southeast Asians, is Beijing’s for the taking.

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.

 

New World Order is leaving the US behind


August 13, 2017

New World Order is leaving the US behind

James Gibney, Bloomberg View

  • Pointing the way: German Chancellor Angela Merkel

 

Of all the global consequences of US President Donald Trump’s first half-year, surely one of the most surprising is the rise in multilateral diplomacy.

After all, this is the guy who came into office pledging to put America First. He downgraded the security guarantees of the North Atlantic Treaty Organisation to a definite maybe — and only if its members ponied up more defence dollars.

The Iran nuclear pact was “the worst deal ever”, and the Paris accord on climate change wasn’t much better. The Trans-Pacific Partnership was dead on arrival. Japan and South Korea’s freeriding days were over. The North American Free Trade Agreement was toast. The US would ignore the rules of the World Trade Organisation.

And from its proposed cuts in foreign aid and United Nations peacekeeping to the empty offices and embassies of the State Department, the Trump administration has made clear how little it thinks of soft power and diplomacy.

But a funny thing happened on the way to the disintegration of the international liberal order. It’s started to reconstitute itself — only not with the US at its centre. Unfortunately, that has less to do with a realisation among our allies and partners that the burden must be more equitably shared than with the increasing recognition that Trump is not, as some US diplomats liked to say about Third World dictators during the Cold War, “someone we can do business with”.

That sentiment found its most trenchant expression in German Chancellor Angela Merkel’s declaration, following Trump’s May trip to Europe, that the continent “must really take our fate into our own hands”. The net result of the Trump administration’s antipathy to free trade and co-operation on climate change and refugee resettlement was a united front against the US at both the Group of Seven and Group of 20 meetings.

Jilted by the US, the other 11 members of the Trans-Pacific Partnership are moving ahead on their own. Canada and Mexico are working together more closely than ever to save NAFTA. Asian nations are hedging their bets between the US and China. Trump’s tough talk on Mexico has prompted it to reach out to its hemispheric rival Brazil on defence co-operation.

Serious differences among allies are nothing new. During the Ronald Reagan administration, for instance, hardline US attitudes towards a planned gas pipeline from the Soviet Union to Europe caused a transatlantic breach that strained even the “special relationship” with the UK. And the call for fairer burden-sharing by American treaty allies — the “free riders” — is also as old as the alliances themselves, even if Trump turned the volume up to 11.

Yet as destabilising as Trump’s transactional mindset — we’ll protect you if you pay us — has been, his temperament has been even more destructive. In Latin America, his brash bullying plays to the worst caricature of Yankee behaviour. No wonder the foreign ministers of 12 nations in the Americas who pledged this week in Peru not to recognise Venezuela’s new constituent assembly — a remarkable regional diplomatic achievement — chose to keep the US mostly out of it.

Then there is Trump’s uncoordinated impulsiveness. His “fire and fury” outburst towards North Korea upended earlier efforts by Secretary of State Rex Tillerson and Secretary of Defence James Mattis to reassure South Korea and Japan that the US was not about to put them in danger.

Tillerson has seen Trump repeatedly sandbag his efforts to broker a rapprochement among the US’s fractious Gulf allies. And transcripts of Trump’s phone conversations with Australia’s Malcolm Turnbull and Mexico’s Enrique Peña Nieto suggest that both men could be forgiven for thinking they were dealing with Homer Simpson, not the Leader of the Free World.

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Every hegemon has a sell-by date, and the US is no exception. Even during the halcyon days of the 1990s — remember when the US was being called a “hyperpower”? — President Bill Clinton’s administration was focused on creating institutions and a rules-based international order that it hoped would constrain China’s economic and strategic rise and extend the half-life of US supremacy. For a variety of reasons, that didn’t work out so well.

In that and other respects, the willingness of other democracies to step up on the world’s non-zero-sum challenges is welcome. Moreover, whether in matters of security or trade, Trump’s strong preference for bilateral deals that allow the US to make the most of its leverage could yield clear benefits.

If he and Chinese President Xi Jinping achieve a compact that balances their respective interests, so much the better. That approach could apply to US relations with Japan, the UK, and other US allies and partners. Strong bilateral agreements, after all, can provide a basis for stronger multilateral ones in years to come.

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Obama understood the importance of Asia and Xi’s China

But even bilateral agreements require a degree of discipline and co-ordination that Trump has yet to display. For now, Trump’s reflexive trashing of President Barack Obama’s policy choices without offering any coherent alternatives has left the US on awkward ground. It’s one thing for other countries to fill a diplomatic vacuum created by a gradual US withdrawal; it’s another for them to do so in the wake of a scorched-earth retreat. If and when the US recovers its strategic senses, it might find itself reduced to occupying a much less attractive seat at the multilateral table.

•James Gibney writes editorials on international affairs for Bloomberg View. He was features editor at the Atlantic, deputy editor at the New York Times op-ed page and executive editor at Foreign Policy magazine. He was a foreign service officer and a speechwriter for Secretary of State Warren Christopher, National Security Adviser Anthony Lake and president Bill Clinton

ASEAN– New Challenges Ahead after 50 years


August 12, 2017

ASEAN– New Challenges Ahead after credible 50 years

by Dr. Munir Majid

http://www.thestar.com.my

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FIRST, let us give credit where it is due: 50 years of continued existence in half a century of challenge and change is a feat of achievement. ASEAN can consider that the cup is half full.

The problem with ASEAN is that not enough is known about it. And what is known is usually about where it has failed, like its failure to take a common stand or to propose creative cooperation in the South China Sea disputes.

Or its pusillanimity in removing non-tariff barriers (NTBs) which are seriously hindering ASEAN economic integration and establishment of a single market and production base.

The fact that so many things – the half-full cup – are happening on the ground, is lost. Taking just the ASEAN Economic Community (AEC), how many Malaysians, for instance, appreciate there are over 1,000 of our companies all over ASEAN, taking advantage of regional growth against the frustrations of investment laws and domestic bureaucracies?

How many are aware of huge Thai companies like Charoen Pokphand (one of the largest private conglomerates in the world, employing 500,000 people across the globe) with big plans to make Malaysia its halal food hub?

Just imagine, Buddhist Thailand working in Muslim Malaysia to propel a fast-growing industry forward – despite whatever halal certification problems it might face in Indonesia, for instance – for its food products. Charoen Pokphand will find a way, as it has all over the world, since its establishment in 1921.

The point is, what is heard are the complaints. Inevitably, as these are louder than what is quietly achieved, with whatever difficulty, by the likes of Sime Darby or Gamuda Land or auto-parts company Ingress Corp Bhd.

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AirAsia Bhd, however loud and incessant its complaints, is now the largest low-cost airline in Asia, truly well-established in ASEAN.

The other side of the story, of course, is – the glass is half empty. The loud, big, private sector push is for ASEAN to strive for optimality.

This is where the great divide begins. Old ASEAN hand Bilahari Kausikan of Singapore once famously said ASEAN is a cow which some people expect to be a horse. The suggestion is, it cannot.

However, why not? Even if it cannot, is the cow fully-milked? Perhaps there should be a convergence between those who say the glass is half full and those who say it is half empty.

With respect to the AEC, there is great effort by the official ASEAN side to engage the private sector to forge cooperation, if not quite convergence. The AEC 2025 Blueprint clearly recognises the role of the private sector in the economic integration process.

In 2015, ASEAN Economic Ministers acknowledged there has to be concentrated effort to get NTBs reduced, and agreed with the ASEAN Business Advisory Council (ASEAN-BAC) that the way forward is by concentrating on a few people-centric sectors – agri-food, healthcare, retail and e-commerce, and logistics.

In the middle of 2016, the ASEAN Trade Facilitation Joint Consultative Committee (ATF-JCC) was revived, with part of its remit being to form working groups with expert private sector entities to address NTBs in those four sectors with, additionally, the tourism sector.

In January this year, the ATF-JCC met in Bangkok and ASEAN-BAC was called to discuss the way forward. Some progress in terms of customs procedures was made just recently on how intra-ASEAN trade could be facilitated. But work on the specific, prioritised sectors has yet to begin.

This is part of the reason why, while there is cooperation between the official and private sectors, there is not quite convergence. Rate of progress: the process is not just slow. It is long, grinding and exhausting.

Beyond the AEC, more generally, there is great need to raise the profile of ASEAN among the people at large, especially the young, whose knowledge of what it does is lacking. It is like a close-kept secret. The top-down approach among those of a certain age has to change.

ASEAN’s young population have to be brought into the whole process, to energise it and to form the future that will be theirs. If ASEAN wants to bring them along into that future, it is absolutely essential to form an ASEAN Youth Consultative body to hear from the young what they want of and for ASEAN.

If ASEAN does not do this, it will be wasting one of its most valuable assets – its demographic vitality. They can take on the digital world.

After we recognise credit should be given to ASEAN for what it has achieved, it is a totally pro-ASEAN thing to do to highlight the formidable challenges it faces going forward. The biggest is happening now: digitisation.

ASEAN has not quite addressed what is now popularly dubbed Economy 4.0. ASEAN talks about the opportunities of e-commerce and, correctly, intones that the trading platforms, payments settlement and connectivity have to be in place to drive it. But even as this being talked about – and inadequate progress is made – the sweep of the digital economy might have uncomfortable consequences for ASEAN if it does not prepare itself.

The fourth industrial revolution is more comprehensive than just e-commerce. There are vast opportunities for new industries and services, as well as for greater productivity. But there are also grave challenges to employment and skills development.

ASEAN needs to fashion clear policies on education and training – with emphasis on cognitive skills – and retraining, and on employment displacement. Yet the ASEAN mantra to attract investment remains low-cost of production. But will the manufacturing industries come to low-labour cost Indonesia or Myanmar in the new digital economy?

Unemployment and unemployability could seriously affect these countries, particularly their micro, small and medium enterprises sector. Serious socio-economic problems could scupper ASEAN economic integration, indeed threaten regional cohesion.

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The time to act is now. ASEAN really has not that much time to celebrate its creditable 50 years.

ASEAN@50


August 3, 2017

ASEAN@50

by Kishore Mahbubani*

*Professor Kishore Mahubani is Dean, Lee Kuan Yew School of Public Policy, National University of Singapore

https://www.project-syndicate.org/commentary/asean-50th-anniversary-by-kishore-mahbubani-2017-08

We live in troubled times, with pessimism clouding even the most prosperous parts of the planet. Many are convinced that the international order is falling apart. Some fear that a clash of civilizations is imminent, if it has not already begun.

Yet, amid the gloom, Southeast Asia offers an unexpected glimmer of hope. The region has made extraordinary progress in recent decades, achieving a level of peace and prosperity that was previously unimaginable. And it owes much of this success to the Association of Southeast Asian Nations (ASEAN), which marks its 50th anniversary this month.

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Dean Kishore Mahbubani and Singapore’s Ambassador at Large Bilahari Kausikan

Southeast Asia is one of the world’s most diverse regions. Its 640 million people include 240 million Muslims, 120 million Christians, 150 million Buddhists, and millions of Hindus, Taoists, Confucianists, and Communists. Its most populous country, Indonesia, is home to 261 million people, while Brunei has just 450,000. Singapore’s per capita income of $52,960 per annum is 22.5 times that of Laos ($2,353).

This diversity puts Southeast Asia at a distinct disadvantage in terms of fostering regional cooperation. When ASEAN was founded in 1967, most experts expected it to die within a few years.

At the time, Southeast Asia was a poor and deeply troubled region, which the British historian C.A. Fisher had described as the Balkans of Asia. The Vietnam War was underway, and the Sino-Vietnamese War was yet to be fought. Many viewed the five non-Communist states that founded ASEAN – Indonesia, Malaysia, the Philippines, Singapore, and Thailand – as dominoes, set to be tipped over by a neighbor’s fall to communism or descent into civil strife.

But ASEAN defied expectations, becoming the world’s second most successful regional organization, after the European Union. Some 1,000 ASEAN meetings are held each year to deepen cooperation in areas such as education, health, and diplomacy. ASEAN has signed free-trade agreements (FTAs) with China, Japan, India, South Korea, Australia, and New Zealand, and established an ASEAN economic community. Today, ASEAN comprises the world’s seventh-largest economy, on track to become the fourth largest by 2050.

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As I explain in my book The ASEAN Miracle, several factors have underpinned the bloc’s success. At first, anti-communism provided a powerful incentive to collaborate. Strong leaders, like Indonesia’s Suharto, former Malaysian Prime Minister Mahathir Mohammed, and Singapore’s founding father Lee Kuan Yew, held the group together.

It helped that as ASEAN was getting off the ground in the late 1960s and early 1970s, the strategic interests of America, China, and the bloc’s members converged. But even when the Cold War ended, the region did not erupt into conflict, as the real Balkans did. ASEAN countries maintained the cooperative habits that had become established in Southeast Asia in the 1970s and 1980s.

In fact, ASEAN’s erstwhile communist enemies – Cambodia, Laos, and Vietnam – decided to join the bloc. So, too, did Myanmar, ending decades of isolation. ASEAN’s policy of engaging Myanmar attracted criticism from the West, but it helped lay the groundwork for a peaceful transition from military rule. (Compare this to the West’s policy of isolation toward, say, Syria, which certainly won’t lead to a similar outcome.)

To be sure, ASEAN is far from perfect. Over the short term, it seems to move like a crab – two steps forward, one step back, and one step sideways.

Yet ASEAN’s long-term progress is undeniable. Its combined GDP has grown from $95 billion in 1970 to $2.5 trillion in 2014. And it is the only reliable platform for geopolitical engagement in the Asia-Pacific region, unique in its ability to convene meetings attended by all of the world’s great powers, from the United States and the European Union to China and Russia.

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ASEAN continues to face serious challenges. Territorial disputes in the South China Sea have created deep divisions, and the intensifying geopolitical rivalry between the US and China poses a further threat to cohesion. And domestic politics in several member states, including Malaysia and Thailand, is becoming increasingly chaotic.

But ASEAN’s history suggests that the bloc can weather these storms. Its impressive resilience is rooted in the culture of musyawarah and muafakat (consultation and consensus) championed by Indonesia. Imagine how other regional organizations, such as the Gulf Cooperation Council or the South Asian Association of Regional Cooperation, could benefit from adherence to such norms.

The EU once amounted to the gold standard for regional cooperation. But it continues to struggle with a seemingly never-ending series of crises and weak economic growth. Add to that the impending departure of the United Kingdom, and it seems only prudent to seek other models of cooperation. ASEAN, however imperfect, provides an attractive one.

The EU was awarded the Nobel Peace Prize in 2012. But ASEAN’s approach may turn out to be the way of the future, enabling other fractious regions to develop sturdy bonds of cooperation, too.

Regional Order Reconfigured: China, Japan, and the United States in the Evolving Asia Pacific


August 3, 2017

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Number 390 | August 2, 2017
ANALYSIS

Regional Order Reconfigured: China, Japan, and the United States in the Evolving Asia Pacific

by Saori Katada and Alex Lin

The Asia Pacific has seen the emergence of new and important regional institutions in the last ten years. Many observers saw such institution-building dynamics primarily through the lens of US-China competition. For example, the Trans-Pacific Partnership (TPP) free trade agreement, before it was scuttled by the Trump Administration, was popularly considered part of a containment strategy implemented by Washington. On the other hand, the Regional Comprehensive Economic Partnership (RCEP) and the Asian Infrastructure Investment Bank (AIIB) were regarded as alternative venues through which China could avoid or counter encirclement.

Japan was expected to follow the American lead because of the importance of its alliance with the United States. Thus, the countries’ ultimate objectives were seen as fixed: to prevail over rival(s) so as to define a regional order that privileges their own interests. Such views neglected, however, a variety of interests, fluidity of power balance, as well as the multiple utility of regional institutions.

Under the Trump Administration, conventional wisdom has become even more inadequate. Recently, the United States has retreated from the TPP and China has launched the One Belt One Road (OBOR) Initiative. Clearly, this is a period of reconfiguration and realignment in regional order building. The uncertainty introduced by the Trump administration has made alignment patterns more dynamic and unpredictable. For example, despite the stalling of the TPP, China is not pushing for RCEP to follow the trade and investment rules of the so-called “state capitalism.” In fact, Chinese leadership has expressed interest in TPP membership in the past and may still be interested. Another example of realignment comes from Japan, where Prime Minister Shinzo Abe recently suggested that Japan might be open to joining OBOR or AIIB. More fundamentally, the alleged US retreat from Asia has created a vacuum for regional leadership.

How does this power reconfiguration change regional order in the Asia Pacific? China and Japan now stand at a pivotal moment, wherein each confronts different structural constraints and strategic choices. China will enjoy greater success at persuading countries, especially traditional US allies, to join its initiatives. In the past, the United States labelled joining the AIIB as defection and attempted to dissuade its allies from seeking membership. However, given recent signals of enthusiasm exhibited by the Trump Administration to participate in OBOR, such dissuasion from the United States may be less likely.

Of course, this requires that the Chinese leadership can credibly demonstrate that the initiatives do not entail overt geopolitical ambitions, as concerns about China pulling its economic levers and turning OBOR into something more than an investment scheme continue to underpin current discourse. OBOR remains an enigma; questions ranging from what it actually entails, to difficulties associated with implementation, to concerns over whether or not it will be successful – and by what metric – define discussions of OBOR.

Undoubtedly, OBOR appears to be more than just an infrastructure-building project that aims to open market access. However, it is less clear what this “more” entails, and what it might mean from a geostrategic perspective. For countries such as those in Southeast Asia or South Korea, this is the most fundamental and pressing question. In the past, these countries, to varying degrees, have been seeking to establish closer ties with China for economic gains while relying on the United States for security guarantees. So far, this “having the cake and eating it, too” hedging strategy has worked because of the leadership competition between the United States and China. With the United States allegedly retreating from the leadership competition, the key priority for China will be to signal to its neighbors that their space and flexibility to maneuver will not disappear with greater involvement in projects such as AIIB or OBOR. To do so, China will have to refrain from overplaying its advantages and from transforming the current positive-sum, win-win engagement into zero-sum competition with the United States.

On the other hand, Japan might become more inclined to take an independent and leading position in the region. Japan may be less constrained by the United States now than in the past, as exemplified by its evolving position on AIIB. Japan may take advantage of the opening presented by the uncertainty associated with the Trump administration and play a more proactive role in Asia, including getting on board with AIIB and/or OBOR.

Already, Japan is positioning itself as a source of continuity and a potential substitute for the United States by keeping key initiatives alive – such as the TPP without US involvement. Yet, in order for Japan to succeed in these endeavors, it will have to overcome its credibility deficit. Not only was the Japanese government seen as being excessively deferential to US interests as it supported the US-led liberal world order, Japan has never been able to follow through on its independent initiatives in Asian regional institution-building projects. Moreover, Japan often appears self-serving in tailoring its economic leadership to prioritize domestic interests such as the protection of its inefficient agriculture sector.

Japan’s history of being ambivalent about the Asia-Pacific regional project and lacking an independent grand strategy has long undermined its credibility as a leader. Unless Japan can show that the country is ready to stand on its own feet, and not react constantly to US-China dynamics, no one will follow. Therefore, the prospect of TPP without the United States, which the Japanese government is leading now, will be an important test. Can Japan lead the TPP and persuade other countries to remain in the agreement without US involvement? So far, the Japanese government’s efforts to advance the TPP-11 without altering the deal has not garnered enthusiasm among Asian members.

If the United States participates in OBOR, as suggested by President Trump, it will add another layer of complexity: will this undermine Japan’s ability to function as Washington’s substitute by downplaying US-Japan ties and increasing uncertainty in the Asia Pacific? Again, Japan faces this credibility challenge as it tries to assure potential followers and take a leadership role in an uncertain Asia Pacific.

As we begin to see greater US and Japanese participation in Chinese-led initiatives over the next few years, the final piece of the puzzle is whether China will be ready to join initiatives led by Japan or the United States. If so, we expect to see features of a positive-sum grand strategy from China, which will then produce a robust regional order supported by even more complex and multilayered regional institutions.

About the Authors

Saori Katada and Alex Lin are Associate Professor and PhD candidate, respectively, at the School of International Relations at the University of Southern California. They can be contacted at SKatada@usc.edu and LinYuTin@usc.edu, respectively.

The East-West Center promotes better relations and understanding among the people and nations of the United States, Asia, and the Pacific through cooperative study, research, and dialogue.

Established by the US Congress in 1960, the Center serves as a resource for information and analysis on critical issues of common concern, bringing people together to exchange views, build expertise, and develop policy options.

The Asia Pacific Bulletin (APB) series is produced by the East-West Center in Washington.

APB Series Editor: Dr. Satu Limaye, Director, East-West Center in Washington
APB Series Coordinator: Peter Valente, Project Assistant, East-West Center in Washington

The views expressed in this publication are those of the authors and do not necessarily reflect the policy or position of the East-West Center or any organization with which the author is affiliated.

For comments/responses on APB issues or article submissions, please contact washington@eastwestcenter.org.

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