ASEAN

For Southeast Asia, the halcyon days of the Obama “pivot,” which saw the president initiate the US-China Strategic and Economic Dialogue, accede to ASEAN’s Treaty of Amity and Cooperation on the way to joining the East Asia Summit, and visit almost all Southeast Asian countries (the only exception was Brunei, which he would have visited in October 2013 if not for the government shutdown in Washington), are over. Southeast Asia is now staring at the prospect of a significant shift in the tenor of relations with the United States.¹ The reality of this shift was brought home in January 2017, when the United States inaugurated an unapologetic “America First” nationalist as its president. Donald Trump, the real estate mogul and reality TV star, has positioned himself as a staunch critic of the Obama administration. He has also made unequivocally clear his expressed desire to reverse a host of Obama era policies, including encouragement of international free trade, support for regional allies, and commitment to multilateralism.

The election of Trump was not without controversy. By playing a populist hand and appealing to the white working class even as he sought to challenge traditional bastions of American political power, including within his own party, Trump fomented a polarization of the country arguably unseen since the difficult years of the Vietnam War. Needless to say, this state of domestic disarray has already had a devastating effect on policy-making, whether on healthcare, tax reform, climate change, or foreign policy. 

These discomfiting cadences have doubtless been picked up in Southeast Asia, and have cast doubt over American global leadership and its reliability as a longstanding partner and an ally. Against this backdrop, this article argues that an assessment of how the Trump administration’s outlook and policies towards the Southeast Asia have thus far been received (and perceived) in the region will show that while elements of policy continuity can be discerned, the absence of clear engagement strategy and the risk of distraction cause concern for the uncertainties and unpredictability that characterizes the Trump administration. Concomitantly, this state of affairs should hasten—and have hastened—introspection by regional states as to the need to recalibrate their strategic options.

Policy Disruption… and Continuity

The inauguration prompted a mood of foreboding for the uncertainty it portended. In Southeast Asia, several obvious issues loomed large. First, the positions articulated by the president on his campaign trail prompted concern that the new US government planned to reduce attention to Southeast Asia as Washington reassessed its commitment to Asian allies. Second, the new administration appeared intent on turning its back on the trade liberalization agenda that had been the mainstay of regional economic integration for the last three decades, and the Trans-Pacific Partnership (TPP) was identified as the likely victim of such a policy shift. Third, there was growing apprehension that the Trump administration might use the South China Sea as leverage in its dealings with China, perhaps in return for greater pressure on North Korea over missile tests and denuclearization. Fourth, Trump seemed prepared to engage in a trade war with China.

The US-Southeast Asia relationship started off on rocky footing as one of Trump’s very first actions as president was to withdraw from the TPP, which had been long in the making. While the TPP did not encompass the entire region of Southeast Asia, it did include four Southeast Asian countries—Malaysia, Vietnam, Singapore, and Brunei—with several others, particularly Indonesia and Thailand, expressing interest to become members in the near future. TPP has been left in limbo with the US withdrawal, and discussions are now ongoing among members as to the wisdom of proceeding without it. For some observers, the American withdrawal was cast as nothing short of ceding crucial economic initiative to China, which was already the number one trading partner with all countries in the region. As the House Committee on Foreign Affairs, Subcommittee on Asia and the Pacific, surmised: “Our strategy for engaging Asia, particularly Southeast Asia, relied so heavily on the TPP that when the United States withdrew, there was not much of a policy left.”² Indeed, at that hearing in May, aptly titled “Revitalizing U.S.-ASEAN Relations,” discussion centered around curbing growing Chinese influence in Southeast Asia. It was during this hearing that Walter Lohman presciently reminded listeners: “What the Chinese seemingly understand better than the United States, however, is the connection between their economic and strategic goals.”³ 

More Continuity than Change in Security Policy?

Yet, in contrast to the president’s initial bluster or withdrawal from the TPP, the administration’s security policy towards East Asia appears hitherto more illustrative of continuity than disruption. Relations with Japan were quickly placed back on an even keel, thanks in no small part to Prime Minister Abe Shinzo, who was quickest off the blocks to engage Trump in order to forestall any chance of the United States gravitating away from its traditional commitment to Japan. Meanwhile, Secretary of Defence James Mattis made a successful early visit to Tokyo, where he reinforced American commitment to Japan and regional security, and to Seoul, where he reassured his hosts that the United States would stand by them in the event of North Korean aggression.⁴ It was the calibration of relations with China, however, that arguably met with the biggest sighs of relief across the region.

As a candidate, Trump took a cantankerous line on China during the campaign, although this is, admittedly, hardly unusual for US presidential campaigns of late. On China, his campaign message was simplistic yet compelling in its populist appeal for certain segments of American society: China was responsible for the economic woes that afflicted the American heartland because low-wage Chinese industries were siphoning jobs away from hardworking Americans. Developments in bilateral relations soon after the elections were ominous. The persistent threat to label China a “currency manipulator” loomed large as a decidedly hawkish trade and economics team was assembled in the cabinet. Receiving the congratulatory phone call from the independence-leaning Taiwanese president, Tsai Ing-wen, followed by capricious comments about possibly reviewing Washington’s longstanding One China policy added further to the adversarial climate. Meanwhile, during his confirmation hearings, Secretary of State Rex Tillerson suggested that efforts should be made to prevent China from having access to the artificial islands it had built in the South China Sea.⁵

After persuasion from interlocutors and members of his inner circle, Trump was compelled to pull back from the brink. Relations with China were set on a more stable path with his declaration that his administration would abide by the One China policy, reportedly a necessary gesture that paved the way for a much-anticipated telephone conversation with President Xi Jinping.⁶  This, in turn, set the stage for a summit in Mar-a-Largo. Though still early in the day for the administration, it marked a highpoint in bilateral relations as Trump sang the praises of Xi and publicly declared: “Long term, we will have a very, very great relationship and I look very much forward to it.”⁷

After an initial flurry of foreign policy activity directed at Northeast Asia, engagement with Southeast Asia was gradually ramped up. Vice-President Mike Pence visited Jakarta in April, pushing Southeast Asia up on the Trump agenda. During the trip, Pence visited Southeast Asia’s largest mosque, Istiqlal, where he made the symbolic gesture of praising Indonesia’s practice of “moderate Islam” in a calculated move to dampen fears about Trump’s harsh rhetoric towards Islam.  It was further reported that despite talk of the president’s intention to renegotiate trade deals with Indonesia, $8 billion worth of energy deals were signed during the Pence visit.⁸ While in Jakarta, Pence also met with the secretary-general of ASEAN, Le Luong Minh, and committed Trump to visits to the region in November for the East Asia Summit, the US-ASEAN summit (both in the Philippines), and the APEC summit (in Vietnam). Needless to say, given the president’s expressed reticence towards multilateralism, this early commitment to participate in the region’s annual multilateral meetings was well-received across Southeast Asia. 

The vice-president’s visit to the region was followed by Mattis’ participation in the Shangri-La Dialogue in Singapore in June, where he reinforced Washington’s longstanding commitment to the security of the region, including greater engagement with ASEAN. As the first explicit statement of intent on regional security made in Southeast Asia by Trump’s defense secretary, Mattis’ speech was carefully parsed by pundits and observers, most of whom concluded that it provided the necessary reassurance given the absence of clear strategy emanating from the White House (a subject to which we shall return). Be that as it may, it has also rightly been noted that American reassurance to the region has always been a structural, rather than situational, matter; there will often be little by way of policy specifics that will be publicly articulated.⁹

In a further demonstration of the administration’s desire to engage the region,  Tillerson hosted ASEAN foreign ministers in Washington D.C. on May 4. The meeting provided an opportunity for Tillerson to publicly request from ASEAN a firmer stand on North Korea even as he reiterated the US position in support of freedom of navigation and in opposition to the rising conflict in the South China Sea.  Significantly, in view of the US withdrawal from TPP, signs of life in US-Southeast Asia trade relations could be discerned when the parties conducted on-the-record discussions around the US-ASEAN Connect, the Trade and Investment Framework Arrangement, and the ASEAN Connectivity through Trade and Investment program.  Tillerson’s meeting with Southeast Asian counterparts in Washington was followed by his visit to the region in August to participate in a series of ASEAN ministerial meetings on the occasion of the fiftieth anniversary of the founding of ASEAN: a trip that included stopovers in Malaysia, Thailand, and the Philippines. Tillerson’s visit to the region—his first as secretary of state—sought to accomplish four objectives: “First was to demonstrate the U.S. commitment to the Asia Pacific region; secondly was to advance our key security priorities in the multilateral fora that are offered through ASEAN; third, strengthen our alliances and partnerships; and fourth, underscore our commitment to a rules-based approach to the region.”¹⁰

Trump has personally met or communicated with several Southeast Asian leaders. In April, he spoke on the phone with the prime ministers of Thailand and Singapore, as well as the president of the Philippines. He also met briefly with President Joko Widodo of Indonesia and Prime Minister Lee Hsien Loong of Singapore on the side-lines of the G-20 Summit in Berlin. More symbolic than substantive, these meetings nevertheless went some distance to assuage fears that the president was uninterested in the region. Vietnamese Prime Minister Nguyen Xuan Phuc was the first Southeast Asian leader to visit Washington D.C. in May, and managed to secure $8 billion worth of commercial deals.¹¹ Significantly, during the visit, Phuc urged the Trump administration to continue its predecessor’s policy of engagement not only with Vietnam, but with ASEAN widely.

Prevailing Anxieties

Notwithstanding signs of continuity, anxiety still remains in the region regarding the US role. It derives from the absence of strategy to guide and frame how the present administration has thus far handled issues of consequence for the region.  The US approach to two closely watched matters on the regional agenda, the South China Sea disputes and relations with China, are instructive in this regard.

South China Sea. Because the United States under Trump is proving to be a distracted power, the administration has struggled to think and act strategically on global affairs.  In Southeast Asia, this is evident in how discussions on the US role in regional affairs tend to center myopically on one thing: freedom of navigation operations (FONOPS) in the South China Sea. To be sure, FONOPS are an important function of an increased US naval presence in the region, a vital expression of commitment. The US Navy is reportedly on course for 900 ship hours in the South China Sea in 2017, up from a previous peak of 700 towards the end of the Obama administration.¹² At this rate, there is on average more than two US navy vessels in the South China Sea on any given day. But to talk FONOPS without accompanying conversations on strategy is to put the proverbial cart before the course.

Domestic distractions aside, this absence of strategy begs the deeper question: Just how important is the South China Sea for the United States?¹³ The inconvenient truth is that US interests in and commitment to the wider Southeast Asian region have been a matter of debate in Washington’s corridors of power since the withdrawal from Vietnam in 1973. Moreover, even if there happens to be consensus (which there is not) that the South China Sea is a matter of American national interest, the ensuing question would be: How much of a priority is it in the larger scheme of US foreign policy preoccupations? On this, the numbers do not lie. The United States spent $425 million over five years on the Maritime Security Initiative designed to boost the maritime capabilities of Southeast Asian partners. In comparison, they spend more than $10 billion a year alone on Afghanistan.¹⁴

None of this is to suggest the United States should downgrade the South China Sea in its order of priorities. On the contrary, there are ample reasons to still take seriously the US role in the South China Sea as a non-claimant but interested party. Quite apart from the potential oil and natural gas deposits there, which obviously would be of interest not just to the United States, at stake is the principle of freedom of navigation in a body of water through which a significant amount of commercial shipping passes to drive the economies of important trading partners. The American political and military leadership recognize this with their common refrain: “The U.S. will fly, sail, and operate wherever international law allows.” Moreover, it has always been a US strategic objective to prevent domination of any given region by a single power. 

It bears repeating that a US naval presence is imperative for the stability and security in the region, and FONOPS are an important reminder of this presence, however imperfect they may be for purposes of deterrence and reinforcement of international law. Yet it is precisely for these reasons that the absence of any wider strategic edifice to frame and guide American policies in Southeast Asia has been a cause for consternation. The US Navy’s presence and activities in the South China Sea must be part of a broader, holistic engagement strategy. FONOPS should not be the strategy, nor the sole or even dominant currency of US commitment. 

The arid reality is that under Trump, the United States lacks a comprehensive, multi-pronged, long-term strategy through which its interests in the region can be articulated and pursued. This absence of a strategic approach not only dilutes the message of American commitment, in the eyes of some, it may also be cast in a negative light by creating the impression that the United States is just as culpable for the militarization of the South China Sea. Moreover, because of Trump’s self-described transactional approach to foreign policy, some regional states remain less than convinced by assurances from administration officials that Washington has no intention to use the South China Sea as a bargaining chip in its dealings with Beijing.

China. The stability of Sino-US relations features prominently in discussions on regional security taking place anywhere in Southeast Asia. The inconsistency and unpredictability of Trump’s approach to China has been a source of anxiety not only for Beijing, but for the entire region as well. Notwithstanding the seeming upturn in bilateral relations following the Mar-a-Lago Summit, there remain legitimate concerns that the United States might still be consciously setting a course for a trade war with China. Indeed, Trump’s frustration at what he perceives to be the lack of Chinese effort to help check the nuclear ambitions of North Korea, prompting the White House to revive accusations against Beijing of inequitable trade practices, have done little to indicate otherwise.¹⁵ This mood was captured in two of the president’s recent tweets: “I am very disappointed with China. Our foolish party leaders have allowed them to make hundreds of billions of dollars a year in trade, yet they do nothing for us with North Korea, just talk. We will no longer allow this to continue.  China could easily solve this problem!”¹⁶

Underlying this administration’s anti-China worldview on trade is an implicit yet crucial assumption: the United States has sufficient economic leverage to hurt China more than China can hurt US interests. This is a dangerously misguided assumption. Let’s consider some facts. China is currently the third largest market for US exports, letting in almost $170 billion worth of goods in 2016.¹⁷ Even though this figure has dipped over the last couple of years, with the size of the Chinese market and its increasing affluence, not to mention the presence of a rising middle class, the Chinese market will still be a consequential destination for American goods and services. China is also a key node in the global supply chain on which much of US industry relies. While the Trump administration could in theory replace Chinese labor with American workers, it is certain that this would drive up labor costs for US companies, which in turn could have a further negative effect on productivity, which has already been on the decline. In other words, the cost of production for US industry will doubtless increase under circumstances which Trump seeks to create, and this cost will ultimately be transferred to the American consumer. Whether President Trump is aware or prepared to admit it, Americans have become avid consumers of Chinese goods. The United States is the largest market for Chinese products, which in turn accounts for the considerable trade deficit between the two. While China would obviously be hurt by higher tariffs, they would also have a significant impact on consumption patterns of the average American. At the same time, China currently holds in access of $1.2 trillion of US treasury bonds. Given the ballooning budgetary deficits the Trump administration is staring at if he intends to make good on his ambitious promises to revamp American infrastructure, continued Chinese purchase of treasury bonds would be crucial to underwrite this enterprise.

Another issue that has vexed the Trump administration is alleged Chinese currency manipulation to keep the RMB (Renminbi) depressed in order to afford Chinese goods an unfair advantage internationally. On this, Trump and his economic advisors have again missed the mark in their assessment of current trends and objectives of Chinese monetary policy. As numerous analysts have surmised, the RMB may in fact be overvalued.¹⁸ This has been so since the advent of the Xi Jinping administration, which has witnessed concerted reform efforts aimed at shifting the Chinese economy away from an export-oriented model to one that is domestic consumption-driven. This effort has required Beijing to promote a strong RMB. In point of fact, any manipulation of the currency has in fact been to shore up its value and the international image of the RMB’s strength with its sizable foreign reserves in order to demonstrate that it rightly belongs to the basket of Special Drawing Rights currencies.¹⁹ 

All this is to say, the narrative that the White House has spun on China defies simple economic logic. More to the point, because the domestic popularity of Trump has precisely been predicated on this ill-informed narrative, any trade and/or currency war would be just as damaging for the American people as it would be for China, and most likely, even more. It is also likely to have detrimental effects for the region, for whom stable Sino-US diplomatic relations, a Chinese economy that is growing, and an American economy that is integrated into the region’s trade and production networks, set the fundamental conditions for growth and prosperity.

Diversification and Introspection

Because the United States has long been accepted as a key regional actor that has contributed to the stability and prosperity of the region, it stands to reason that the uncertainty that still clouds the Trump administration’s view of and approach to Southeast Asia would prompt regional states to recalibrate their own policies and strategies. This recalibration is evident at two levels: it is manifested in greater diplomatic, economic, and strategic activity between Southeast Asian states and other extra-regional powers, as well as in how it lends greater urgency to the cause of ASEAN unity and cohesion.

Diversified Engagement. Quite apart from the fact that they provide important trade routes for Japan to the Southeast Asian region, Tokyo has long considered its ongoing dispute with China in the East China Sea a mirror of the South China Sea disputes. In fact, Japanese strategic thinking views both seas as a continuous littoral. This provides the basis for Japan’s harder security interests in the region.²⁰ By dint of these shared outlooks and concerns, Southeast Asian claimant states such as the Philippines and Vietnam have recently entered into strategic partnerships with Japan. Vietnam has moved to increase cooperation with Japan in a strategic move to counter Chinese influence.²¹ Meanwhile, Japan had improved security ties with the Philippines under Benigno Aquino, through the sale of new naval vessels and joint exercises, although this appears to have stalled under Rodrigo Duterte.²² It has also engaged in capacity-building in Myanmar, and may also be discussing humanitarian assistance and disaster relief (HA/DR) cooperation.²³ In 2015, Japan signed defence cooperation agreements with Indonesia (which included maritime security and capacity-building) and Malaysia (involving a strategic partnership on defence equipment and maritime safety).²⁴ While these agreements may have predated Trump’s election, they have acquired greater salience in light of it.

In much the same way, Southeast Asian states have also moved to strengthen relations with India. India’s Maritime Security Strategy in 2015 highlighted an “increased focus,” among other things, on the “importance of maintaining freedom of navigation and strengthening the international legal regime at sea, particularly the United Nations Convention on the Law of the Sea (UNCLOS).”²⁵ Following the Act East policy that expanded the regional scope of India’s economic interests, the Maritime Policy also added the South and East China seas and the entire Western Pacific to its areas of maritime interest.²⁶ This accelerated the already steadily increasing number of maritime deployments in the region, and strengthened the Andaman and Nicobar Command.²⁷ Securing partnerships with several Southeast Asian nations therefore increased in priority, where it had identified the Malacca Strait as an important chokepoint in Indian trade routes. In 2016, Prime Minister Modi visited Laos (for the India-ASEAN Summit), Myanmar, and Vietnam, where it offered Vietnam a $500 million line of credit (an increase from $100 million in 2014) for defence purchases in exchange for a “comprehensive strategic partnership.”²⁸

An important feature of this regional recalibration is the state of relations with China. China’s rapid growth in the 2000s was a boon to all of Southeast Asia. It overtook the United States as virtually every country’s largest trading partner within a decade. However, it lagged in foreign direct investment to these countries, particularly behind the United States. To facilitate greater trade relations, it also began to work extensively on infrastructure development, and this gradually formed the basis of China’s Belt and Road Initiative (BRI), now extending far beyond the region.

Malaysia and the Philippines, hitherto steadfast Western allies, have gravitated closer to China in recent years, drawn to the benefits Chinese friendship can bring. The ability of China to flex its economic muscle to achieve its interests may best be exemplified in Cambodia. Since 2012, when it first openly supported the Chinese stance on the South China Sea, trade has more than doubled.²⁹ China is presently lending at highly concessionary rates to Cambodia, Laos, and Myanmar, which are now among the fastest growing Southeast Asian economies. Even Vietnam, which had tried to diversify its economic strategy away from over-reliance on China through the (now-stalled) TPP, has ended up receiving increased Chinese investment.³⁰

On infrastructure, Malaysia has so far been a major beneficiary of the BRI, which sees China supporting a variety of port projects but also a highly visible $12.8 billion East Coast Rail Link from Port Klang through Kuantan to Pengkalan Kubor at the tip of the Thai border with Peninsular Malaysia and numerous real estate projects throughout the country. Significantly, Malaysia’s eastern states of Sabah and Sarawak also now enjoy direct flights to Chinese cities even as Chinese investments there increase exponentially, and both countries have committed to spending a combined $50 billion on BRI infrastructure projects over the next ten years. Opponents have criticised the lack of oversight of such large projects, yet this also points to the enormous clout China has in Malaysia that they can lead such strategically important projects.³¹ In Indonesia, China won the 2015 bid for the Jakarta-Bandung High Speed Rail over Japan, which had tabled an impressive bid with JICA development financing and their famed shinkansen (bullet train) technology. Observers suggested the award was driven as much by politics as the technical merits of the proposal.³² In exchange, Japan was said to have been offered the chance to take the Jakarta-Surabaya rail project, which, confusingly, was also suggested to China.³³

China’s main security issue in the region is its sovereignty claim in the South China Sea. This potentially sets it at odds with all the rival claimants in the region, as well as unsettling non-claimant states who nevertheless have economic interests in open and safe sea lanes of communication. China’s strategic stance has been to actively mitigate these inherent tensions, and this has provided an opportunity for many countries to enjoy China’s economic largesse.³⁴ Despite China’s insistence that the South China Sea disputes are a bilateral issue, the main claimant states have tried to work through multilateral frameworks at times, particularly on a Code of Conduct (COC) to govern the dispute. Since President Duterte came to power in the Philippines however, Manila has tempered its opposition to Chinese activities in the South China Sea and drawn closer to China while it distanced itself, at least in rhetoric, from the United States. Thailand, now under a military junta, has also gravitated to China.

ASEAN Centrality and Unity. 

If deepening and diversifying regional engagement efforts with major extra-regional powers forms one side of the coin, then internal unity and cohesion among Southeast Asian states must surely be the other. Throughout its modern history, Southeast Asia has always found itself at the junction of great power contention. This is a function of the region’s geopolitical destiny being located at the crossroads of major political, economic, and cultural interactions, and as such, is not likely to change. It is therefore in the interest of all regional states to ensure some measure of strategic autonomy in order to prevent domination by a single power. It is this strategic objective that underpins the notion of ASEAN Centrality on which Southeast Asian regionalism is anchored. 

Simply put, ASEAN Centrality signals the attempt of Southeast Asian states to manage the changing distribution of power and regional balance so as to create strategic latitude and autonomy while minimizing the prospects of the region being overwhelmed by great power politics. Centrality has come to be expressed in ASEAN’s organizational capacity evident in its creation and hosting of a raft of regional processes such as those mentioned above. Significant in these respects is ASEAN’s ability to extend its institutional and diplomatic model to encompass issues and actors from the wider Asia-Pacific region. Centrality also applies to agenda-setting and chairing (or co-chairing) of these processes, and the acceptance of the organization’s Treaty of Amity and Cooperation, where current signatories include all the major regional powers, as the foundational premise for the regional security architecture. The uncertainty caused by the challenges that bedevil American approaches to Southeast Asia described above has doubtlessly injected greater urgency for ASEAN Centrality.

An even more fundamental point needs to be registered with regards to the practice of ASEAN’s diplomatic centrality. The effort to accent centrality ultimately turns on the ability of members of the organization to at least speak with one voice even if they cannot think with one mind. The harsh reality is that as the institutional expression of collective regional aspirations, ASEAN is challenged by questions about its unity and coherence. Indeed, one must be cautioned not to read into ASEAN’s narrative of community a unity of outlook and purpose when, in reality, the membership of the organization is given to divergent, and at times competing, interests and strategic outlooks, exacerbated by both material changes in the balance of power as a consequence of economic interdependence as well as residual mutual suspicion between member states. Trump’s impact may suggest greater urgency to cooperating more closely together, but the forces of divergence have gained so much momentum and its causes have penetrated so deeply that the absence of a clearer US regional strategy and a more engaged leadership only intensifies divisions.