Time for bolder steps from ASEAN

March 4, 2019

By : Ponciano Intal Jr, ERIA

ttps://www.eastasiaforum.org.

ASEAN is now facing circumstances that are fundamentally different from anything it has dealt with before. They require a much more proactive approach on international and regional integration strategies. ASEAN is unlikely to maintain its centrality unless its leaders are prepared to take bold steps, beyond ‘business as usual’.

 

ASEAN has come a long way from its beginnings in 1967. It transformed an area of turmoil, antagonism and violence into a zone of cooperative peace and prosperity, and disparate economic backwaters into an increasingly integrated global growth powerhouse. A region that was a Cold War pawn is now central to the economic and political-security architecture of the Asia Pacific, and Southeast Asian peoples, once largely cut off from one another, are becoming a strong socio-cultural community.

A major reason for this remarkable transformation is that ASEAN leaders collectively stepped forward when faced with tremendous challenges. ASEAN crisis-points in the past are frequently forgotten when assessment is being made of its capacity to deal with new challenges. For example, leaders replaced Preferential Tariff Arrangements with the ASEAN Free Trade Area (AFTA) in 1992 when faced with potential ’fortresses’ in the European Union and the North American Free Trade Agreement. AFTA is still driving regional integration and the ASEAN Community, despite the 1997 financial crisis and the shift in investment flows out of ASEAN and into surging China.

But the new challenges require an even bolder response.

The realignment of great power relations in the Asia Pacific is causing great geopolitical uncertainty. The digital and fourth industrial revolution is expected to accelerate, generating significant regional unease about its impact on lower end employment. On the other hand, there is transformative potential for greater productivity in firms and industries, better growth opportunities for small and medium enterprises, and enhanced resiliency and sustainability across the ASEAN economies.

The surge in protectionism and anti-globalisation in much of the developed world underlines the priority of pursuing inclusive growth, economic openness and regional integration in ASEAN and the wider region through the proposed Regional Comprehensive Economic Partnership (RCEP). The rules-based multilateral trade regime and economic order is vital to ASEAN’s prosperity, but is under threat. The vulnerability of many ASEAN countries to climate change also demands sustainable and resilient development.

The next two decades will see history’s largest increase of middle and upper-middle classes in the India–ASEAN–China corridor, dubbed the ’golden arc of opportunity’. ASEAN needs to be well positioned to take advantage of this opportunity. With far less technological capability and skilled manpower than China or India, ASEAN has to improve markedly its technological prowess, human capital, institutions and infrastructure.

So what can ASEAN leaders do to overcome the immense challenges the region faces?

Nimble and proactive diplomacy that asserts ASEAN centrality and harnesses the collective leadership of middle powers can do much for peace, security and prosperity in the wider region. Bringing together middle powers to raise their concerns will help constrain China–US competition and confrontation. ASEAN can also provide a strong and unified voice to ensure an inclusive regional architecture emerges.

Asian collective leadership is now essential to maintaining and strengthening multilateral rules and trading systems that ASEAN and the wider region rely on for economic prosperity and political security. Successfully concluding RCEP is just the start. But it will be important to ASEAN’s global credibility and voice in brokering a way forward with reform of the multilateral trade regime.

The biggest threat to ASEAN’s open and inclusive development is that to the rules-based multilateral trading system and international economic order. This system is a core interest of ASEAN and other countries in this region. The trade war has highlighted deficiencies in the World Trade Organization and international trading system that need to be addressed. ASEAN and Indonesia through their prominent participation in the G20 process have a common and urgent interest with like-minded partners in framing Asia’s proactive response to this challenge.

A more vigorous and active regional and international diplomacy will only be successfully built on stronger ASEAN foundations. Leaders will need to implement the ASEAN Economic Community Blueprint and other measures that realise an integrated, connected and seamless ASEAN single market and production base. This would help ASEAN compete with China and India’s more liberal trade and investment environments and allow deeper integration across the region.It will also help ASEAN stand firm in its international diplomacy.

Deeper ASEAN integration means making fully operational national single windows, the ASEAN Single Window, national trade repositories, the ASEAN Trade Repository, the ASEAN Customs Transit System, and ASEAN self-certification schemes.

It also means ensuring transparent and streamlined non-tariff measures and a more concerted effort to strengthen regional and national standards and conformance quality infrastructure and systems. Leaders should also develop a strong and liberalised services sector and an open investment regime with freer flow of data and payments, institutionalise ASEAN’s Good Regulatory Practice, and implement a quality Regulatory Management System in each ASEAN country. There also needs to be greater commitment to skills mobility and development within the region, including greater focus on lifelong learning and skills training.

It is also essential to prepare for, adapt to and harness the digital and fourth industrial revolution. This requires creating stronger institutions and policies, with many already embedded in the ASEAN Community Blueprint. Embracing the digital revolution and adapting to new technologies under Industry 4.0 would drive ASEAN forward in upgrading its economies, enhance resilience and sustainability, empower its people, strengthen people engagement and connectivity, improving governance, and strengthen ASEAN’s innovation ecosystem.

Put together, these measures will revitalise ASEAN into a vibrant and influential grouping that is set for success in the decades to come.

Ponciano Intal Jr is a Senior Economist at the Economic Research Institute for ASEAN and East Asia.

 

 

 

 

Foreign Policy–Dealing with the US and EU : Cambodia’s strategic option(s)

February 13, 2019

https://www.khmertimeskh.com

by Soun Nimeth

‘Shopping diplomacy’, arms purchases, and good military cooperation with the US and EU canld help thwart Western criticism of Cambodia’s human rights record. But Soun Nimeth questions whether these are worth the risks, given Cambodia’s bad experiences in the 1970s when it fell into the abyss of a geo-political war.

US Ambassador to Cambodia William A. Heidt talks to VOA Khmer about the importance of US-Cambodia relations at the U.S. Embassy in Phnom Penh, Cambodia on February 10, 2016. (Nov Povleakhena/VOA Khmer)

With the looming geopolitical war, Cambodia is trapped in the center of a power rivalry  between China and the US as well as the latter’s ally, the EU. This is both in terms of strategic contest and economic rivalry.

To recall the 1970s when Cambodia fell in the abyss of a geo-political war, the country now has no reason to feel flattered once again when it is in the cross hairs of the superpowers.

Despite several attempts, through a direct response to US Vice President Mike Pence’s letter as well as a face-to-face meeting with US Deputy Assistant Secretary of Defence for South and Southeast Asia Joseph H. Felter, to assure the US that Cambodia would not allow Koh Kong to be used as a Chinese naval base, the efforts seem to have fallen on deaf ears.

 READ ON: http//www.phnompenhpost.com/national/trump-rein-your-embassy-hun-sen-calls-us-president-warn-diplomats-about-interference

The determination to project Cambodia as China’s proxy state seems to have already been carved in stone in America’s regional strategy. Unjustified concern was expressed in the latest “Worldwide Threat Assessment of the US Intelligence Community” that went all the way to allege that Cambodia might amend its constitution to cater for foreign military bases.

Cambodia is cautiously mindful of its dark past and it is in the interests of the Kingdom to dispel the paranoia of the US and EU. The question is, how can Cambodia go about it.

Looking in the region, Cambodia can find some clues from countries like Thailand, Vietnam and Singapore.

Thailand

Neither the US nor the EU has ever demanded the reinstatement of the Thaksin government like they did vis-à-vis the dissolved CNRP.  There is no public condemnation for the repeated election delays.

In contrast, Thai Prime Minister Prayut Chan-o-cha was welcomed to the White House by President Donald Trump in October 2017 as the Prime minister embarked on what Pongphisoot Busbarat called “shopping diplomacy”. The “shopping list” was aimed to reduce the US trade deficit with Thailand that amounted to $19 billion (2016). It included the lifting of the import ban on American pork and poultry products, the purchase of Boeing aircraft by Thai Airways, the purchase of American coal by Siam Cement Group, the boosting of investment in the US worth $6 billion to create more than 8,000 jobs, the agreement for Thai petroleum company PTT to invest in shale gas factories in Ohio and the $261 million arms purchase.

Thai Prime Minister Prayut Chan-o-cha was also received by British Prime Minister Theresa May and French President Emmanuel Macron in June 2018. In the latter meeting, Thailand’s space agency signed an agreement to buy an observation satellite worth $215 million from French manufacturer AirBus.

In the recent article entitled “ASEAN must make EU a strategic partner”, veteran journalist Kavi Chongkittavorn wrote that “Thailand sacrificed blood, sweat and tears to overcome the stringent criteria outlined by the EU, which would not have been possible without its military rulers’ vigorous use of the much-condemned Section 44.”

One would question what did he imply when referring to “blood, sweat and tears” to secure the EU’s lifting of the yellow card? This may hold the key on how the current Thai government could please Western countries despite being a military junta born from a coup.

..

Vietnam

In October 2018, when General Secretary Nguyen Phu Trong became the first Vietnamese leader to hold a dual role as central committee general secretary and president, no Western nation raised any alarm or condemnation.

Vietnam is a single-party state by all accounts but it enjoys excellent relations with the US and the EU. This is attributed to two factors; one being that they all share a common geopolitical arch-rival, China; and another one is the usage of Vietnam’s shopping diplomacy.

During the visit of French Prime Minister Edouard Philippe to Hanoi in November 2018, France and Vietnam signed two business deals worth over $10 billion. The deals included the purchase by Vietjet Air of 50 AirBus A321 neo planes worth $6.5 billion and CFM Leap engines worth $5.3 billion.

Singapore

The recent Khmer Times opinion by Doung Bosba titled “Is everything about China bad?” has excerpted the Naval Time’s article on the decades-long lease of Singapore port to the US navy for the operation of the Logistics Group Western Pacific (COMLOG WESTPAC) and Navy Region Center Singapore (NRCS) among others.

Good military cooperation and being a strategic ally with the US has helped Singapore to navigate away from any storm of criticism over the nature of its government, which has been dominated by the People’s Action Party since the 1959 general elections.

From the  cases of Thailand, Vietnam and Singapore, various options and lessons can be drawn such as cutting trade deficit, detaching from China or making China an enemy, conducting “shopping diplomacy” or leasing facilities to the US military. Whether such options are viable, considering Cambodia’s strategic predicament and its resources, is the question. Even more important, would there be assurances that the US and EU would not antagonize the Cambodian government, should Cambodia choose to please them? Who would guarantee that after pleasing the Western countries, Cambodia would not become the backyard of Thailand and Vietnam both politically and economically?

Without a clear answer to these questions, it is very much likely that Cambodia will continue to navigate in the dark and both the US and EU will continue to antagonize the Cambodian government for their own geo-political interests. Castigating Cambodia for its record on democracy and human rights is just a sideshow. The issue is greater than that if we consider why the US and EU coddle Thailand, Vietnam and Singapore– whose levels of democracy are far from the level demanded from Cambodia.

Soun Nimeth is a Cambodian analyst based in Phnom Penh

..

Decoupling the US from Asia

November 21, 2018

Author: Editorial Board, ANU

ww.eastasiaforum.org/2018/11/19/decoupling-the-us-from-asia/#more-155952

 

...[D]ecoupling or divorce from China, Cold War-style, is an option that would threaten economic and political turmoil and promise a global winter of discontent that stretched the Asia Pacific order to breaking point”.

Maybe US Vice President Mike Pence didn’t mean to fire the opening shots in a new Cold War with China in his 4 October speech at the Hudson Institute, but the global policy community can be forgiven now for taking the proposition seriously.

 

The idea of a new Cold War is of course not new: it had been canvassed in security circles in Washington and the chill has been cultured actively by some in allied capitals for some time. A range of President Donald Trump’s advisors and former advisors, Steve Bannon, Peter Navarro, John Bolton and Robert Lighthizer, all identify as proponents of political and economic decoupling from China to a more-or-less extreme degree. Navarro most recently advocated the idea in its most extreme form at his CSIS speech about how China was undermining US national security, giving the impression that an economic ‘self-sufficiency’ strategy, like that which has been so disastrous in North Korea, was the only way to keep America secure. Larry Kudlow, Director of the President’s National Economic Council, disavowed that thinking with an unequivocal declaration that Navarro had misspoken and had no authority to speak on the matter on behalf of the Trump administration.

The new Cold War narrative gained traction as President Xi Jinping consolidated his power and began to assert the discipline of the Chinese Communist Party across the government and society in China. It has been accompanied by a discernible shift right across the political spectrum in the United States towards a hard-line posture on China. The conflation of frustration with China’s military assertiveness in the South China Sea and the perception that its Party dominated political system qualified every commitment China had made under international law to the rules-based international economic system has been an easy logical slide even for those in the US policy community who had been architects of China’s entrapment within that system.

Make no mistake. There are real issues on the agenda for negotiation in securing a more efficient and more equitable foundation for the next phase of the economic and political relationship between China and the United States. China is no longer a poor, developing country aspirant to membership of the WTO but a very large, upper-middle income economy that is the largest trader in the world. While China’s entry to the WTO was on terms that were more onerous than that even advanced and established members of the WTO had to bear, issues beyond the coverage of the WTO, with respect to its foreign investment regime for example, and new issues, such as those related to digital trade, beg negotiation. Contrary to much of the new American narrative, it is not that China has flagrantly flouted the rules of the system to which it and its partners signed on in 2001 — it is rather that it has outgrown them bigtime.

Many of the issues for negotiation now that have the highest priority — to do with treatment of foreign investment, intellectual property, industrial subsidization and competition policy — were encompassed within the negotiations that had been on-going between China and the United States over a Bilateral Investment Treaty, that have now been suspended. There is also the issue of further trade liberalisation and industrial reform that the absence of progress with multilateral negotiations through the WTO has left unattended. Attending to these issues is not only in the interests of the United States and other countries, it is also in the interests of China in prosecuting the reform agenda that it has articulated as the path towards catching up with at least lower-end advanced industrial economies and avoiding the middle income trap.

All these things would seem eminently negotiable, if only President Xi and President Trump could agree to sort them and some others things out.

But as Gary Hufbauer warns in our lead essay this week, the Pence declaration last month represents a significant departure from ‘business-as-usual’.

‘Economic sanctions are the front line of the new Cold War, unlike the US–Soviet confrontation of yesteryear,’ says Hufbauer. ‘But military escalation cannot be far behind. Since the United States and China already possess enough intercontinental nuclear missiles for “mutually assured destruction”, and since the United States would be hopelessly outnumbered in conventional land battles, military escalation will focus on naval power and hypersonic short-range missiles.’

Hufbauer worries that the United States will ramp up its economic war, with the goal of securing an economic divorce from China. While the immediate complaints from the Trump administration are about the persistent US trade deficit with China and the appropriation of US firms’ technology, the real story is simply fear that China will overtake the United States economically and technologically as the arithmetic, however manipulated, suggests it will by 2030 or 2050, take your pick.

Hufbauer sees American attempts to decouple from the Chinese economy and the close down of US trade and technological ties as a loser’s game — a national science and technology strategy that stayed open to scientific and technological links would more likely keep the United States ahead of the game, incorporate less risk of pushing China back into a corner from which it posed a bigger threat and strengthen US economic and political security, he suggests. But he rates the chances of this outcome low, barring unlikely conciliation from Xi’s China. The new Cold War promises, he assesses, to be a lasting legacy of presidents Trump and Xi.

Yet, in a hard-headed if gloomy assessment of where China and the United States are at right now, Henry Paulson, Secretary of the Treasury under former US President George W Bush and leading US China expert, sounds a strong warning on the decoupling strategy.

Decoupling, he says, is easier when you’re actually a couple. But the United States and China are not a couple. They are part of an international economy that is multilaterally integrated on an unprecedented scale, especially within Asia.

The United States might well continue to pursue divorce through cutting back trade, capital and technology flows, but that’s a cost no Asian country, including US allies, can readily afford, Paulson says. The cost is a function of their geography, of economic gravity and of the strategic reality in which they live day-by-day.

Many countries around the world may share many of Washington’s present concerns. But decoupling or divorce from China, Cold War-style, is an option that would threaten economic and political turmoil and promise a global winter of discontent that stretched the Asia Pacific order to breaking point.

The EAF Editorial Board is located in the Crawford School of Public Policy, College of Asia and the Pacific, The Australian National University.

Asia Needs Pence’s Reassurance

November 16, 2018

By Patrick M. Cronin

He should confront Trump’s mistakes and put forward a positive agenda.

In Asia, anxieties about the United States’ role in an increasingly China-centered world are palpable. While some fear that the United States is retreating from its international obligations, other worry that it is bent on instigating conflict.

.As U.S. Vice President Mike Pence visits Southeast Asia and the South Pacific this week to attend the Association of Southeast Asian Nations (ASEAN) and Asia-Pacific Economic Cooperation leaders’ meetings, he should make clear that the United States remains a stalwart partner for the region with a vision for peaceful cooperation and development.

No U.S. retreat

The United States is not withdrawing into fortress America. It remains actively engaged in global affairs and is focused on strengthening the economic and military foundations of its power. The country’s central aim is to stay competitive in a world driven by a dynamic Indo-Asia-Pacific region. That goal, of course, derives from a real concern that China is challenging the postwar order and an understanding that the United States needs to find new ways to renew its diplomatic, economic, and military competitiveness.

The United States is not withdrawing into fortress America. It remains actively engaged in global affairs and is focused on strengthening the economic and military foundations of its power. The country’s central aim is to stay competitive in a world driven by a dynamic Indo-Asia-Pacific region. That goal, of course, derives from a real concern that China is challenging the postwar order and an understanding that the United States needs to find new ways to renew its diplomatic, economic, and military competitiveness.

But as U.S. President Donald Trump said last November in Da Nang, Vietnam, the United States has been “an active partner in this region since we first won independence ourselves,” and “we will be friends, partners, and allies for a long time to come.” U.S. Secretary of State Mike Pompeo has likewise been a forceful advocate for diplomacy in the region. Meanwhile, Congress is on the cusp of passing a bipartisan bill designed to bolster U.S. engagement there. The Asia Reassurance Initiative Act would authorize $1.5 billion in new funding over the next five years for regional diplomacy, development, and defense programs. In short, rumors of America’s disengagement miss the mark.

No Cold War with China

Pence also needs to reassure the region that when it comes to China, the United States is not seeking a war—trade, cold, or hot.

Pence also needs to reassure the region that when it comes to China, the United States is not seeking a war—trade, cold, or hot.

Instead, the U.S. administration wants a fair, open, and cooperative relationship. That doesn’t mean ignoring China’s attempts to compete with the United States, including through grey-zone operations like muscling the Philippines out of Scarborough Shoal and militarizing artificial islands despite pledging not to do so. And America will not shy away from meeting challenges directly. But on a fundamental level, the Trump administration would like to channel competition toward cooperation where possible.

In fact, the Trump administration rejects the idea of Thucydides’s Trap: that conflict between a rising power and a status quo power is inevitable. Leaders have agency, and it is up to them to determine the future course of relations. And for its part, the United States seeks to remain a force for good, not to contain or curb the China’s peaceful rise.

Of course, it would be useful for Pence to clarify that Washington will not tolerate coercion or the use of force against allies and partners in the region. But the vice president should also reiterate what he said last month at the Hudson Institute: “America is reaching out our hand to China. We hope that Beijing will soon reach back with deeds, not words.” That sentiment is broadly shared, even among Democrats, who do not agree with some of the administration’s tactics. (As Joaquin Castro, a Democratic representative from Texas, said last month, China should “compete, not cheat.”)

US Vice President Mike Pence has confronted Myanmar’s de facto leader Aung San Suu Kyi at the ASEAN summit about what is being done to hold those responsible for the persecution of the Rohingya ethnic minority in her country to to account.

This will be a difficult balance to strike. And here, China’s approach to the South China Sea is instructive. It alone pursues claims there based in part on historical rights rather than contemporary international law. It showers the region with promises of infrastructure investment, but it fails to deliver transparent, equitably financed, high-quality development. It promises to follow an ASEAN Code of Conduct for the region but seeks a veto on the right of ASEAN members to extract natural resources from the South China Sea or hold military exercises there with Australia, Japan, the United States, and other non-ASEAN states.

But the fear that a major confrontation, or even war, will play out in Southeast Asia is greatly exaggerated. China seeks to advance its goals by means short of war, and the United States aims to cooperate where it can but compete where it must. The resumption of the Diplomatic and Security Dialogue—a U.S.-China working group involving top defense and diplomacy officials—is thus a good sign.

 

Yes to an affirmative agenda for Asia

Beyond dispelling myths about U.S. retrenchment and bellicosity, Pence should also put forward a positive agenda for Asia. Here, he will have to confront some of Trump administration’s mistakes.

Many in the region question the United States’ predictability, because Trump has reversed major U.S. initiatives, from the Trans-Pacific Partnership to the Paris Agreement on climate change. Meanwhile, he has escalated tariff wars without articulating a coherent strategy for achieving results, and his uneven application of penalties has rankled allies and competitors alike. Nor has the administration deployed soft power well, often ignoring U.S. values like democracy and human rights, turning the country’s back on refugees, using unbefitting language, papering over conflicts of interest rather than cracking down hard on corruption, and being far too comfortable with authoritarians.

Despite these missteps, Pence can use the trip to Asia to burnish four cornerstones that should be the foundation of the administration’s free and open Indo-Asia-Pacific strategy, especially in Southeast Asia and the Pacific Islands. Those four elements are a rules-based order, sustainable economic development, inclusive diplomacy, and effective security cooperation.

First, upholding and peacefully adapting the set of rules chosen freely by strong and independent sovereign states will be the foundation for U.S. engagement with the region. The United States has enduring interests in the South China Sea: stability, freedom of navigation, and resolving disputes peacefully and without coercion.

Although ensuring the rule of law will require far more than freedom of navigation operations, the United States will continue to help maintain the openness of the seas by sailing, flying, and operating anywhere international law permits. Importantly, seafaring nations from Asia and Europe are also demonstrating their commitment to the same cause by conducting similar operations.

Second, for growth to be sustainable, it has to be fair and reciprocal. It should be pursued in a manner that is transparent, non coercive, and environmentally sustainable, especially when it comes to the global maritime commons. There is nothing wrong with China’s Belt and Road Initiative that sunshine and high standards of accountability cannot fix.

Meanwhile, the United States should go even further to mobilize public and private support for trade, investment, and development. Eventually, the country can create a whole constellation of allies and partners that can invest in energy infrastructure, digital connectivity, transportation, and more. For instance, the United States is in active discussions to leverage the BUILD Act to expand joint efforts with allies and partners in the Philippines, Thailand, Cambodia, Indonesia, Malaysia, Vietnam, and elsewhere. In doing so, it can set a gold standard for development in the region.

Take Indonesia for example. China aside, a prosperous, democratic, and stable Indonesia is in the vital interest of the United States. Yet few in Washington are aware of the opportunities that await in Southeast Asia’s most populous country. The U.S. government’s Millennium Challenge Corporation has just completed a successful economic investment in Indonesia. Pence should ensure Washington starts negotiating a follow-on compact while simultaneously using BUILD Act funds to facilitate new U.S. private sector entry into Indonesia.

A third tenet of U.S. policy in Southeast Asia is inclusive diplomacy, including trust-building with competitors and partners alike.

ASEAN deserves broad support for its unique convening authority. Certainly, that is a major reason why the United States embraces the body having a loud unified voice in Indo-Pacific engagement. It also is in favor a strong, binding Code of Conduct—not one that unfairly limits the freedom of action of Southeast Asian states.

Inclusive confidence-building measures, such as plans to extend the voluntary Code for Unplanned Encounters at Sea to include coast guard vessels and efforts to protect rapidly depleted fishery stocks, deserve action. The United States should signal its support for promoting a new framework of “Resilience, Response, Recovery,” which is one of several useful concepts being put forward by ASEAN under Singapore’s chairmanship. At the same time, ASEAN members are pragmatic. The United States will often have to cooperate with them on a bilateral or trilateral basis to find effective responses to real challenges.

In terms of diplomacy with China, it might be worth creating a new crisis avoidance mechanism—perhaps mirroring the 1972 Incidents at Sea agreement. The bilateral pact did not prevent all U.S.-Soviet mishaps, but it helped avert major disasters, something that is even more important in a region where intermediate-range cruise missiles, hypersonic weapons, and the military use of cyberspace and outer space are unrestricted.

Finally, the United States will continue to support effective security cooperation centered on information sharing, capacity building, and interoperability. The United States should buttress such efforts by firming up its commitment to respond appropriately to threats of coercion and the use of force.

Boosting the ability of allies and partners to see better what is happening in their maritime backyards will help them become more resilient. And assistance with capacity building, especially for coast guards and other law enforcement agencies, will give nations a better ability to protect their sovereignty. Bilateral, “minilateral,” and larger multilateral exercises can also help create a readiness for dealing with future contingencies.

In sum, a confident but not boastful United States is neither stepping away from Asia nor trying to provoke wars there. Rather, it aims to ensure stability in the region so that all countries there can advance both sovereign interests and regional cooperation.

Patrick M. Cronin is senior director of the Asia-Pacific Security Program at the Center for a New American Security in Washington. @PMCroninCNAS

https://foreignpolicy.com/2018/11/15/asia-needs-pence-reassurance-trump-

china/#39;s%20Picks%20OC

ASEAN — finding middle path in the US-China conflict

 

November 9, 2018

Opinion

Despite local uncertainties, the region must be bold in shaping its own future

by Bilahari Kausikan 

https://asia.nikkei.com

For almost a decade, the basic strategic issue for Southeast Asia has been how to respond to the changing dynamics of the Sino-American relationship as it enters a new phase of heightened long-term competition.

The U.S. and China will not quickly or easily reach a new modus vivendi. Southeast Asia will have to navigate a prolonged period of unusual uncertainty.

U.S.-China rivalry in the South China Sea has emerged as something of a proxy for their competition. Strategically, the situation is a stalemate. China will not give up its territorial claims and the deployment of military assets. But neither can China stop the U.S. and its allies operating in the area without risking a war it does not want because it cannot win.

The Trump administration has given the 7th Fleet more latitude to conduct Freedom of Navigation Operations in the South China Sea. Japan and other U.S. allies are beginning to push back against China’s claims. The U.S. has signaled its intention to conduct even larger shows of force. This raises the risk of accidental clashes. Still, that risk does not at present seem unacceptably high.

A premeditated war is improbable. China will feel it must fight only if the U.S. supports Taiwan independence. This is unlikely. If an accidental clash should occur in the South China Sea or elsewhere, both sides will probably try to contain it. The Association of Southeast Nations ought to be able to cope with situations short of a U.S.-China war. ASEAN has previously managed far more dangerous circumstances. But this will require greater agility, unity and resolve than ASEAN has shown recently.

 

The most obvious manifestation of increased Sino-American competition is U.S. President Donald Trump’s “trade war.” Trade is the means; the objective is strategic competition. China accuses the U.S. of using trade to hamper its development. China is not wrong.

Although attention has focused on the tit-for-tat tariffs, the more significant aspect is new U.S. legislation to limit technology transfers to China, which sets new rules that future administrations will find hard to change.

Trump’s attitude toward China is no aberration, but reflects a bipartisan view — widely shared in business as well as politics — that the U.S. has been too accommodating to Beijing. Whoever succeeds Trump will likely stay tough on China.

The Trump administration has often been described as isolationist, but this is a distortion. Rather, it believes that this is an era of great power competition and is determined to compete robustly, with a preference for bilateralism over multilateralism, and a return to “peace through strength.”

China has misread the implications of the global financial crisis of 2008-2009 by believing its own propaganda about the U.S. being in irrevocable decline. It missed the souring mood of U.S. business toward China, mainly over intellectual property theft and forced technology transfers. These concerns are shared by businesses in other developed economies, which support Trump’s goals although they may disagree about his methods.

President Xi Jinping’s 19th Party Congress speech a year ago abandoned Deng Xiaoping’s approach of “hiding light and biding time.” But his main focus was domestic. Xi said China’s new “principal contradiction” was between “unbalanced and inadequate development and the people’s ever-growing needs for a better life.” This poses a fundamental challenge. Unless those needs are met — which will require immense resources — Communist Party rule could be at risk.

To find a new growth model, the party must balance control and market efficiency. An enhanced role for markets implies a loosening of control.

It remains to be seen what Xi will do. So far he seems to have opted for stronger control, and may have sharpened the problems he faces.

The Belt and Road Initiative is as much about this domestic challenge as China’s global ambition. The BRI exports the old growth model based on state-led infrastructure investment. The BRI buys time to find a new balance between the market and the party.

But the BRI rests on the foundation of U.S.-led globalization. Can it succeed if the world turns protectionist? China may well be the main loser if that global order frays. China cannot replace U.S. leadership. An open international order cannot be based on a largely closed Chinese model. BRI partner countries are pushing back, including in Southeast Asia, and implementation will be problematic.

China is not happy with every aspect of the post-Cold War order based on U.S.-led globalization. China wants its new status acknowledged. But Xi has championed and profited from globalization. The trade war is now hurting China and slowing growth. China may seek to become more self-sufficient technologically, but this will take time while the pressures are immediate.

Some have speculated that there may be opportunities for ASEAN if foreign companies shift production from China. This is possible. But doing so is easier said than done and no one will forgo the Chinese market. ASEAN members must also resist temptations to act as a backdoor into the U.S. for Chinese companies.

A prolonged trade war and concerns that China may have compromised the security of supply chains, are likely to upend existing supply links. This could seriously complicate ASEAN members’ efforts to move up the value chain, for example if U.S. groups relocate business back to America. In response, ASEAN must attract higher grade investments by improving infrastructure and skills, and assuring investors their technology is secure.

Low labor costs and a potential market of 700 million consumers are no longer sufficient to make Southeast Asia an attractive investment destination. The attitude of ASEAN members toward China and the extent to which they are beholden to it are likely to become important considerations in investment decisions.

BALI, Oct 12 — Tun Dr Mahathir Mohamad has lamented ASEAN for not fully tapping its potential as an economic powerhouse, despite having abundant resources and a consumer market of nearly 700 million people.

ASEAN needs to move decisively to hedge against long-term uncertainties, while taking advantage of available opportunities.

Reforms such as the removal of non-tariff barriers and harmonization of ASEAN’s approach toward services and labor mobility could help make Southeast Asia a common production platform. Member states meanwhile should implement plans to upgrade skills and infrastructure. But internal political changes in some member countries could undermine the goal of closer economic integration. Unfortunately, ASEAN has, in recent years, become too timid for its own good.

 

 

Ambassador A Large Bilahari Kausikan, a former Permanent Secretary at Singapore Ministry of Foreign Affairs, is Chairman of the Middle East Institute at the National University of Singapore.

Small states must play smart

October 5, 2018

by Chheang Vannarith

http://www.khmertimes.com.kh

Cambodia Flag

“Cambodia is pursuing a light hedging strategy and striving to strengthen multi-lateralism through an omi-enmeshment strategy – a diversification strategy to create an interlocking network of partners with common economic and security interests.”– Chheang Vannarith

The foreign policy of small states is constrained by the size and location of the country and its natural resources and population. Small states are more vulnerable to external changes and shocks, the level of dependency on external sources for security and development, and the perception of their national roles.

 

Size does matter for small states. They find it difficult to have favourable foreign policy outcomes than larger nations. To make up for this, small states tend to focus on their immediate geographic area and economic diplomacy, with an emphasis on international rules and norms, while promoting multilateralism and international cooperation.

The primary objective of small states is to ensure their survival and strengthen their position and relevance in a fluid or even anarchic international system. The fast-evolving international system together with global power shifts is posing more challenges for small states to adjust and realise their foreign policy objective. Hence they must play smart and be innovative in order to achieve their foreign policy goals.

Cambodia is thriving to stay relevant in the international system through the implementation of a dual-track diplomacy: bilateral and multilateral diplomacy. Recently, Cambodia has taken a relatively proactive approach in strengthening multilateralism and a rules-based international order as these two norms are under stress and threat caused by unilateralism and protectionism. The US retreat from multilateral institutions has caused severe disruptions and turbulence in the international liberal order.

Cambodia’s foreign policy is at a critical juncture as the country remains at the frontline of geopolitical rivalry in the Mekong region – a new growth center and strategic frontier of Asia. Geopolitical risks are heightening as major powers are vying to create their own sphere of influence in the region. The Kingdom is very much vulnerable to becoming a pawn of major power politics if foreign policy is not managed carefully. The evolving geopolitical dynamics thus demands that Cambodian leaders be more adaptive, flexible, resilient, and pragmatic.

As geopolitical risks and vulnerabilities rise further, Cambodia’s foreign policy options could be more constrained. The strategic space for Cambodia to manoeuver is getting narrower. Once geopolitical power rivalry becomes clear-cut and all-out, Cambodia could lose its balance and would be structurally forced to hop on the bandwagon of a major power for its survival.

At the moment, Cambodia is pursuing a light hedging strategy and striving to strengthen multi-lateralism through an omi-enmeshment strategy – a diversification strategy to create an interlocking network of partners with common economic and security interests.

Hedging is the best strategic option for Cambodia, especially in dealing with uncertainty. However, implementing this strategy is a huge challenge. It requires strategic articulation on certain issues and strategic ambiguity on others. Even sometimes it requires to have contradictory views on certain issues but it must be implemented smartly in order not to lose trust with any major power.

The key challenge now for Cambodia is how it could gain trust from all major powers. At the moment, Cambodia’s relations with the US faces a serious trust deficit. It is urgent that Cambodia and the US find common grounds and explore innovative pathways to restore trust and normalize their bilateral relationship.

Economic pragmatism, strategic diversification, a denial to a regional hegemonic power, and regime legitimization are the key components of a hedging strategy. ASEAN as a regional grouping is an important shield for Cambodia and the group’s other members to neutralize and cushion the adverse effects created by rivalry between the major powers.

Yet ASEAN faces the risk of being marginalized by two competing institutional frameworks – China’s Belt and Road Initiative and the US-initiated Free and Open Indo-Pacific. Unless ASEAN member states are able to stay united and forge a common foreign policy position, they risk becoming the proxy states of major powers. Consequently, the region will be divided into two diametric poles: the pro-China camp versus the pro-US camp.

To avert these risks, ASEAN must be more innovative and adopt a bolder approach to protect common regional interests. Just playing it safe and keeping a low profile is not a solution. ASEAN must be bold enough to stand up against any major power that intends to build its hegemonic dominence in the region at the expense of the core interests of its member countries.

Cambodia is of the view that ASEAN driven multilateral institutions and mechanisms play a critical role in constructing an open and inclusive regional order that can accommodate all major powers. ASEAN is widely regarded as the main vehicle for its members to engage and integrate major powers, and hopefully shape the behaviour of major powers.

Engaging major powers is a viable strategic option for small states. Engagement is a means to integration. Small states like Cambodia can partially contribute to constructing an international order by engaging and integrating major powers into a rules-based international system and getting them to assume responsible leadership role in multilateral institutions.

Dr. Chheang Vannarith is a board member and Senior Fellow at the Cambodian Institute for Cooperation and Peace (CICP).