- Asia Society report says US should acknowledge it is ‘one of many regional actors’ and reduce ‘rules-based order’ rhetoric that Southeast Asians regard as hypocritical
- US should consider joining CPTPP, RCEP trade alliances and explain what Joe Biden’s Indo-Pacific Economic Framework offers to region, report adds
The US should abandon the idea of “American primacy” if it hopes to counter China’s sway in the “multi-actor” Southeast Asia region, the Asia Society has urged in a new report.
Observing that the region is now “genuinely multipolar, and China may, in fact, be the region’s primary power”, the report, titled Prioritizing Southeast Asia in American China Strategy and released on Tuesday, concluded that “America is only one of many regional actors”.
The report, a product of the society’s Centre on US-China Relations and the 21st Century China Centre at the University of California at San Diego, also advised Washington to “tone down rhetoric” about the international “rules-based order”.
“Southeast Asians see hypocrisy in such American protestations and view these as Western rules imposed on non-Western countries,” it noted.
Sitting on geographic chokepoints vital for global trade and transportation, Southeast Asia finds itself at the centre of competition for influence between Beijing and Washington.
And with US concerns over China’s expanding influence, preserving the rules-based order in favour of a free and open Indo-Pacific remains a key element of the strategy for the region developed by US President Joe Biden and his administration.
But in its recommendations, the report called on Washington to regard the region as more than a geopolitical arena.
“Southeast Asia should be seen and respected on its own intrinsic merits – and not viewed solely through the prism of Sino-American competition,” the report suggested, asking the US to “play to its strengths, be confident and proactive, and adopt a comprehensive and positive approach to the region – not just reactive to China”.
Walking a diplomatic tightrope, Southeast Asian nations have responded to the US-China rivalry with ambiguity and flexibility to avoid picking a side.
To ease the pressure of choosing one of the competing global powers, the report advised the US to be “a more dependable and benign partner”, involving itself in the regional economic architecture.
That architecture now involves two trade alliances that the US is not party to: the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP); and the Regional Comprehensive Economic Partnership (RCEP).
“The US should join CPTPP and consider joining RCEP,” the report said.
The CPTPP rose from the ashes of the Trans-Pacific Partnership, the 12-member alliance Donald Trump withdrew the US from on his first day as president in 2017.
Biden, who took office in 2021, has ruled out joining the group. However, China has applied for membership.
Charlene Barshefsky, a former US trade representative who contributed to the report, said that withdrawal from the TPP was “certainly” a factor in Washington’s declining economic influence in the region.
Barshefsky said that China’s growing economic dominance “exerts extraordinary impact on these countries, making them reluctant to speak out, oftentimes, making them reluctant to push back in ways that might engender Chinese retaliation or Chinese coercion”, adding that the US “really has not mustered a response to it”.
China is also a member of RCEP, a free-trade agreement whose ranks include Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam – all members of the Association of Southeast Asian Nations.
Other members are Australia, China, Japan, South Korea and New Zealand.
As an alternative to both groups, the Biden administration last year launched an economic initiative called the Indo-Pacific Economic Framework (IPEF).
Unlike CPTPP and RCEP, though, IPEF is not a free-trade agreement. Instead, it focuses on “four pillars” of economics – fair and resilient trade, supply chains resilience, clean energy and anti-corruption.
Fourteen countries, including Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam, have participated in IPEF meetings and ministerials.
US Trade Representative Katherine Tai characterised the framework in May as “not a traditional trade deal”, saying “we’re not just trying to maximise efficiencies and liberalisation”.
“We’re trying to promote sustainability, resilience and inclusiveness,” she added.
Naomi Wilson, vice-president for Asia policy at the Information Technology Industry Council, a Washington-based global trade association, observed that countries in the Asia-Pacific were “no longer willing to bend to US demands without getting something in return”.
Thus, US policymakers “cannot afford to close the door on trade deals when the policy objectives of competing with China require greater market access elsewhere”, she said, contending that such goals were “too important to rest on the hope” that frameworks like IPEF would “accomplish the same ends”.
Indeed, the report advised the US to make IPEF “more economically concrete and credible” and to “explain in clear terms what it offers to regional states”.
The report also said that regional views of IPEF were “largely dismissive”.
David Shambaugh, director of the China policy programme at George Washington University and the leader of the report, said that the US faced a “public diplomacy problem” in the region.
Describing IPEF as a “rather complex initiative” which does not just involve trade deals, Shambaugh said that “the economics of IPEF are kind of buried and they aren’t very clear”.
“The US government and the Commerce Department have some real public policy work to do to try and spell out in much clearer and rather simplified terms,” he said, and just “give the bottom lines about what it can do economically for the partner countries”.
The report also recommended that Washington “dramatically increase” US diplomacy across the region since it was “underperforming and becoming a liability”.
Daniel Russel, a former assistant secretary of state and an Asia Society vice-president who worked on the report, said that the story of what the US was “doing for the region in the region” was not getting told, “certainly not well enough to penetrate widely and to have adequate impact”.
He attributed this lacking to multiple factors, adding that American diplomats are “not present or visible, at least not enough”.
Finally, the report suggested, the US should also “carefully consider commencing negotiations for a Reciprocal Trade Agreement with Asean or a subset of Asean states, with mutual market access”.
China has had a free-trade agreement with Asean since 2010. The report also noted that despite significantly trailing China in trade with Asean, the US is still a leading investor in the group – a fact the report said remained unrecognised.
The total stock of US foreign direct investment in the region “totals US$328.5 billion (2020) – greater than China, Japan, and South Korea combined. Annual US investments in the region average around US$25 billion per year (greater than China’s),” it noted.
Shambaugh called this “another unappreciated fact that Southeast Asians don’t know”.
“So you can’t just look at the economic realm through trade numbers or even the regional architecture,” he said, adding that the US was “definitely hurting itself” by not getting more deeply involved in the entire economic domain.
