US Reaching Out to ASEAN Nations

President Barack Obama is hosting leaders of 10 Southeast Asian countries in Sunnylands in California this week in a bold move to deepen and broaden US engagement with ASEAN. This is a positive development but it also imposes risks that, in the end, will be up to ASEAN to manage.

Other Asia Pacific countries have regular meetings with ASEAN leaders. The United States has come late in acknowledging the geo-strategic significance of the organization. Southeast Asian leaders have already had 18 summits with China and 17 with Japan.

The Sunnylands Summit is a continuation of the US rebalance to Asia which started in 2009. US–ASEAN summits have been held on the sidelines of East Asia Summit meetings since 2013 after the United States ratified the Treaty of Amity and Cooperation and appointed an ambassador to ASEAN — the first non-ASEAN country to do so.

The ASEAN group is the fourth largest trading partner of the United States and American companies are the largest single source of foreign direct investment in the region. In fact, US companies have invested more in Southeast Asia than they have in Japan, China and India combined. The US–ASEAN relationship was elevated to a strategic partnership in Kuala Lumpur in November 2015 and a Plan of Action is being worked out for engagement over the next five years.

The agenda for Sunnylands is to strengthen economic, political, security and people-to-people ties. But the meeting comes at a time when ASEAN is at sixes and sevens and has the potential to undermine regional coherence unless the ASEAN group is clear about what it wants from its relationship with the United States. This raises some big questions.

ASEAN is a central anchor in Asia’s geo-strategic order. Against how some realists called the odds, ASEAN has not only survived but has also been a useful fulcrum in managing relations among the major regional powers. Driven to unity and cooperation in its relations with large neighboring countries, ASEAN has been larger than the sum of its parts. ASEAN’s approach to international diplomacy carries weight despite the contradictions in coordination and coherence across a vastly diverse group of nations.

ASEAN, in the face of China’s rise and its competitive rivalry with the United States, now seems more important than ever.

Maintaining ASEAN centrality will depend on progress with its own economic integration. The ASEAN Economic Community (AEC) came into force at the beginning of this year. It is an ambitious project to move ASEAN towards a single market and production base. The United States, China, Japan, Australia and others in the region have a deep intersection of interests in a strong ASEAN. Making the AEC work is now essential to that.

The Regional Comprehensive Economic Partnership (RCEP) is being negotiated between ASEAN and its six East Asian free trade agreement partners China, Japan, South Korea, India, Australia and New Zealand. RCEP is an ASEAN-led agreement that, if successfully negotiated, will entrench ASEAN centrality. At best it can reinforce and extend the AEC so it is of vital importance to conclude an ambitious agreement that ultimately matches or betters the ambition of the Trans-Pacific Partnership (TPP).

High on the US agenda in Sunnylands will be a strategy for dealing with the maritime territorial disputes with China in the South China Sea and getting more countries lined up to sign on to the recently concluded TPP.

ASEAN cannot approach the TPP with a common position any time soon. Four ASEAN members — Singapore, Malaysia, Brunei and Vietnam — are members of the TPP and Indonesia, the Philippines and Thailand have expressed interest in joining. It is unrealistic to expect that there can be movement towards their membership for half a decade or more. That leaves the three least developed countries, Myanmar, Cambodia and Laos, still at the starting blocks given the high hurdles to entry and also because they are not members of APEC — a requirement under the current TPP arrangement. Meanwhile ASEAN’s engagement in the East Asian economy is the main game.

The TPP is yet to be ratified by its 12 members — which include Japan, Australia and the United States, but not China or India — and will not come into force until at least the beginning of 2018. It is very unclear how much longer after that new members will have to wait before they can expect to join. And even when they are eligible, they will have to negotiate entry separately through US Congress. This could be a very divisive process for the ASEAN group.

Former Indonesian trade minister, Mari Pangestu argues in this week’s lead that the discussion around the TPP this week should not be about urging ASEAN members to join the TPP. Instead, ASEAN should ‘address the potential diversion of trade and investment away from those ASEAN members not in the TPP. This is especially important for the least developed ASEAN countries, such as Cambodia, which are set to lose the most.’

‘The Summit should consider other initiatives that will help to secure ASEAN centrality and provide some transition flexibilities for countries choosing to join the TPP’, she says.

If individual countries chase entry to the TPP there is a risk that the focus in ASEAN will shift away from the AEC and ASEAN’s core agenda in East Asia through RCEP. Dealing with ASEAN countries bilaterally in this manner is precisely what the United States opposes China doing on territorial issues in the South China Sea. And yet, ironically, the conduct of its economic relations with the ASEAN economies embeds this strategic error.

In the economic and security spheres, ASEAN needs a common position that embodies the interests of all ASEAN members. The Philippines, Vietnam and Brunei have territorial disputes with China in the South China Sea. Peaceful resolution of these disputes and counterbalancing China’s assertiveness will be the other major agenda item in Sunnylands. The United States and ASEAN have similar positions on these issues but, as Pangestu suggests, it would be unwise of the United States to wrong-foot ASEAN efforts to secure agreement on its code of conduct in the South China Sea.

‘Leadership and neutrality from the largest ASEAN country, Indonesia — which is not a claimant — can help achieve’ a code of conduct that is being negotiated in an ASEAN-led regional forum, says Pangestu. That would seem to be a more likely way forward towards a peaceful resolution than a US-led response, especially since the United States is not yet signed up to the United Nations Convention on the Law of the Sea (UNCLOS). Of course, ASEAN will need American backing but it is with ASEAN that the diplomatic initiative needs to remain.