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Foreign Policy

US-ASEAN Summit: Is the US Catching up with China?

Mar 09 , 2016

According to the 2015 Bloomberg survey, four of the top ten fastest growing emerging economies are members of ASEAN – Philippines, Indonesia, Malaysia and Thailand. ASEAN’s geographical proximity and deepening linkages with other key regional economies such as China, Japan and Korea also contributes to making the wider East Asian region a critical engine of global economic growth and development in the years to come. On the security front, ASEAN is also facing serious challenges such as the jurisdictional disputes over South China Sea. The significance of ASEAN did not escape the calculus of major powers that have long courted and engaged Southeast Asian states and ASEAN as a regional organization. In the contest for influence over this vital region, China appears to have gained the lead. From this perspective, the Special U.S.-ASEAN Summit at Sunnylands, California can be seen as an attempt to counter the growing influence of China over ASEAN, as well as to restore the U.S. leadership/primacy in the region.

The U.S. has a long history of engagement with ASEAN dating back to four decades ago. It became a Dialogue Partner of ASEAN in 1977, earlier than China, which attained full dialogue partner status only in 1996. The US was also the first Dialogue Partner to establish a diplomatic mission and appoint a resident ambassador for ASEAN in 2010; China did the same only in 2012. However, deep involvement in other distant theaters (e.g. Middle East and North Africa), increased security investments in response to terrorism and other security challenges, and recent economic woes scaled down the resources that the US has for the region and consequently made it harder to respond to the fast changing realities on the ground especially in light of China’s rise.

In contrast to the U.S., China since initiating market-oriented reforms in the late 1970s valued the importance of its immediate neighborhood and began to expand its ties with ASEAN. It became a Strategic Partner of ASEAN in 2003, earlier than the US that obtained such status only in 2015. China was also the first Dialogue Partner to enter the ASEAN Treaty of Amity and Cooperation in 2003; the U.S. only followed suit in 2009. China was the first Nuclear Weapon State to express its intention to enter to the South East Asia Nuclear Weapons Free Zone Protocol. It also began an Annual Leaders Summit with ASEAN in 1997 (though initially informal) while the U.S. only did so in 2009. But while these political efforts were laudable, it was actually on the economic front that China’s impact on ASEAN became most felt and enduring. The ASEAN-China economic relations eventually paved the way for the establishment of a free trade agreement (FTA) in 2010, the first multilateral FTA for China, which took effect last year. Curiously, U.S.-ASEAN Trade and Investment Framework Agreement was signed as early as 2006 but this never graduated to an FTA – U.S. signed an FTA with Singapore the following year (2007). In 2013, a U.S.-ASEAN Expanded Economic Engagement (E3) Initiative was established but whether this will help build momentum towards a future bilateral FTA remains to be seen.

China set up the ASEAN-China Center in Beijing in 2011, to further demonstrate the significance it attaches to peripheral diplomacy towards ASEAN. The Center is a one-stop information center to promote bilateral cooperation in trade, investment, tourism, education, and culture. All these sustained efforts made China the largest trading partner of ASEAN since 2009 and ASEAN became China’s biggest trading partner in 2015 coinciding with the creation of the ASEAN Economic Community. In comparison, the U.S. was ranked as ASEAN’s fourth largest trading partner, after China, Japan and the EU, although the U.S. remains ASEAN’s largest source of foreign direct investment. In relation to priority areas for strategic cooperation, ASEAN and China clearly emphasize on addressing immediate economic development issues, namely in the areas of agriculture, information and telecommunications, human resources development, two-way investment and the Mekong River Basin development. In comparison, ASEAN-U.S. priority areas for strategic cooperation touch on many non-economic areas (aside from economic integration) and include maritime cooperation, transnational challenges including climate change, emerging leaders and women’s opportunities.

As things stand, economic imperatives appear to be the main preoccupation of most ASEAN states with other issues taking a back seat, although there are concerns about the jurisdictional disputes over the South China Sea (SCS). As such, it appears that China was able to leverage its growing economic power to deepen ties with ASEAN. Maritime cooperation, though welcomed by coastal states, notably SCS claimants Philippines and Vietnam, are met with less enthusiasm if not indifference by other members, especially by non-SCS littoral states. This is partly because such cooperation is seen as part of a wider strategy to undermine China, which is a major trading partner and investor for most ASEAN states. It must be noted that 3 of the 17 major points (points 7, 8, 9) of the Joint ASEAN-US Special Summit Declaration allude to such cooperation/“shared commitment.” There also appears to be less interest on climate change (although the same is enshrined in point 11 of the Declaration) considering that ASEAN (except Singapore) is a club of developing states whose energy consumption (notably fossil fuels like coal and oil) is bound to increase as the region’s population, urbanization rate and economic growth are projected to accelerate.

While China seems to enjoy a commanding lead over the U.S. in terms of engaging ASEAN economically, the U.S. had long been known as the region’s security guarantor underwriting the stability needed for the region’s economies to flourish and boom. The U.S. has a mutual defense treaty with the Philippines dating from 1951 and annual military exercises with many ASEAN states. However, even in this department, China is already making significant inroads. Last year, it hosted the Xiangshan Forum, a track 2 regional security dialogue seen as a rival to Shangrila Dialogue, wherein ASEAN defense delegates were present. China had also conducted a flurry of recent military exercises with ASEAN states, many of them for the first time – Indonesia (2012 on anti-terror), Singapore (2015, first ever maritime cooperation), Malaysia (2014 and 2015 on non-traditional and humanitarian and disaster relief), Thailand (first ever air force exercises), and Cambodia (first ever naval exercises coming after the U.S.-ASEAN Sunnylands Summit and after a visit by Japanese Self-Defense Force navy). Thus, even in the arena of maritime cooperation, China is already making some headway as some of these military exercises have a strong maritime element. In 2011, a $500 million ASEAN-China Maritime Cooperation Fund was also established to support practical cooperation, although this treaty remains underutilized. In addition, Chinese arms sales/transfers to ASEAN are increasing. These include joint/co-production and technology transfer (e.g. production/delivery of anti-ship missiles to Indonesia and Thailand, frigates to Myanmar). Nevertheless, reception by some ASEAN states towards security cooperation with China remains hesitant because of anxiety over Chinese intentions and the SCS disputes, but continuous confidence-building measures, periodic consultations and high-level defense exchanges may gradually eliminate these concerns.

Set against this context, the U.S.-ASEAN Summit is timely and critical, especially for the U.S. The choice of the setting – the same venue of first ever face-to-face meeting of Presidents Obama and Xi – also highlights the increasing importance of ASEAN to the U.S. To shore up its economic engagement with the region, President Obama proposed the U.S.-ASEAN Connect initiative, which will utilize network hubs in the region, notably Singapore, Jakarta and Bangkok, to connect entrepreneurs, investors and businesses on both sides of the Pacific. The initiative has four pillars – business, energy, innovation and policy – covering a broad gamut of factors that could help lay the groundwork for bilateral commerce and trade. But considering the time and difficulties it took for similar U.S.-led initiatives like the Trans-Pacific Partnership to take off, the next challenge, particularly for the next U.S. Administration, is how to build on from this and how to translate this momentum into reality. If the message of the Summit was to impress on ASEAN that the U.S. remains a reliable partner and is in for the long haul, it appears it had been heard well. But this message would be lost if follow up actions are not in sight. For ASEAN, the Sunnylands Summit stresses the ever-growing importance of balancing its relations with major powers. It imbues on them the need to find ways to help shape great power competition into more constructive ways, de-securitizing them and elevating them into more productive engagement.

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