strategic asia 2006 07 trade, interdependence, and security Edited by Ashley J. Tellis and Michael Wills Regional Studies Strategic Dimensions of Economic Interdependence in Southeast Asia Donald E. Weatherbee restrictions on use: This PDF is provided for the use of authorized recipients only. For specific terms of use, please contact <publications@nbr.org>. To purchase the print volume in which this chapter appears please visit <http://www.nbr.org> or contact <orders@nbr.org>. 1414 NE 42nd Street, Suite 300 Seattle, Washington 98105 USA 206-632-7370 the national bureau of asian research
executive summary This chapter examines the evolving geo-economic environment in Southeast Asia, particularly the rise and high visibility of the PRC, and the implications for U.S. economic, political, and security interests in the ASEAN region. main argument: Despite the growth in influence of the PRC in the region, Japan, the EU, and the U.S. are still major economic partners of ASEAN and the U.S. is the grouping s most important security partner. ASEAN is constructing a hub and spoke system of multiple ASEAN+l connections in which both Washington and Beijing are important in a regional distribution of power that can promote the interests of China, the U.S., and ASEAN. policy implications: The building of the ASEAN-U.S. Enhanced Partnership will act as a balance to China. To be successful, the partnership will require moving beyond economic relations in the building of functional links to promote greater multilateral political interdependencies in the region. The Enhanced Partnership s economic strategy of building a regional network of free trade agreements will require the reauthorization of the U.S. president s fast track trade authority in 2007. The key bilateral relationship for the U.S. in ASEAN is with Indonesia. Continued U.S. support of the Yudhoyono government s efforts at reform and development will provide further substance to what the U.S. now defines as its strategic partnership with Indonesia. A strong Indonesia has the potential once again to lead ASEAN. The economic and security platforms supporting U.S. strategic interests in Southeast Asia are stable. The political platform needs shoring up with respect both to formal U.S. association with ASEAN s Treaty of Amity and Cooperation (TAC) and to U.S. differences with ASEAN over issues of democratization and human rights in Myanmar (Burma).
Southeast Asia Strategic Dimensions of Economic Interdependence in Southeast Asia Donald E. Weatherbee The leitmotif of contemporary analyses of the international relations and political economy of East and Southeast Asia has become the rise of China. Some observers see China s heightened economic role particularly as expressed by China s relatively sudden prominence as a major trade partner of the ASEAN states as playing a key part in a perceived decline of U.S. influence in Southeast Asia. Many also see China s emerging regional posture as challenging a fundamental basis of U.S. strategic policy in the region since 1950. The U.S. security role in Southeast Asia has been crucial to peace, stability, and the maintenance of the regional balance of power, with the United States being the predominant extra-regional great-power. Now, China s place in what had for decades been an essentially unchallenged U.S.-centered strategic ordering of Southeast Asia poses the question as to whether U.S. dominance is a necessary condition for the promotion of U.S. national interests in the region. Alternatively, will U.S. adaptations and adjustments to an emerging balance of power or, in the worst case jeremiads, Chinese predominance, be sufficient to safeguard the U.S. stake in Southeast Asia s future? If either China or the United States decides that its national interests require the exclusion or containment of the other, then tension, conflict, and insecurity will mark future regional relations. The regional security interest of the Southeast Asian states themselves is thus to avoid that kind of outcome by helping to promote a strategic environment that is non-threatening to either China or the United States. Donald E. Weatherbee (PhD, Johns Hopkins School of Advanced International Studies) is the Donald S. Russell Distinguished Professor Emeritus at the University of South Carolina. He specializes in politics and international relations in Southeast Asia. He can be reached at <donald.e.weatherbee@verizon. net>.
272 Strategic Asia 2006 07 For the ASEAN states, their bilateral relations with extra-regional powers are increasingly linked to their group relations in ASEAN+1 formats or other multilateral frameworks such as the security oriented ASEAN Regional Forum (ARF). ASEAN as a regional policy platform is becoming even more important to its members as they begin to move toward a more integrated regional organizational format. Both China and the United States recognize the importance of ASEAN to its members and have placed their bilateral relations in Southeast Asia in the contextual setting of developing ASEAN regionalism. Within this setting, ASEAN states hope that growing region-wide interdependencies involving both China and the United States will mediate their regional relationship through a joint interest in the maintenance of a stable strategic environment. The economic dimensions of the interdependencies are expressed through a proliferation of marketdriven bilateral free trade agreements and region-wide ASEAN+1 trading and functional cooperation agreements, all of which also have a political foundation in extending the scope of multilateral activities. The China dazzle has tended to eclipse the fact that ASEAN s economic ties to the United States, Japan, and the European Union (EU) in sum far outweigh those of China. Furthermore, China s new partnership links in Southeast Asia are not unique. Even as ASEAN becomes closer to China, it is forging stronger ties with all important trading partners. Contradicting the view that a China-centric, geo-economic unit is emerging in Southeast Asia, ASEAN appears to be taking an omnidirectional strategy, hedging and balancing its links to any single extra-regional power. The United States understands that its future role in Southeast Asia will depend on U.S. policy capabilities across the full range of international transactions. This is apparent in Washington s new initiative, the ASEAN-U.S. Enhanced Partnership, which if promoted and supported has the potential to ensure that the United States will remain, if not the extra-regional predominant actor in Southeast Asia, at least a significant actor that can defend its interests in the emerging new distribution of power. This chapter first examines China s role in the evolving structure of ASEAN s intra-regional East Asian economic interdependencies, outlining the web of bilateral ASEAN+l trade agreements and strategic partnerships that ASEAN has negotiated or is negotiating. The next section then examines the comparable U.S. economic presence in the region with particular attention to the building of an ASEAN-U.S. Enhanced Partnership. The following section addresses the strategic implications of the economic dynamics as underpinned by the U.S. security presence. The chapter concludes by examining the implications for future ASEAN-U.S. relations
Weatherbee Southeast Asia 273 in an ASEAN-centered system of multiple +1s and the political requisites of a truly enhanced ASEAN-U.S. relationship. ASEAN, China, and East Asian Integration Some analysts have argued that American interests are in trouble throughout the Asia-Pacific region. 1 This claim derives in part from a perception of a new pattern of international transactions centered on China: the predominant trend in the region is the creation of an extensive web of mutual interdependencies among state and non-state actors, with China increasingly at the center of the web. 2 This China-centric web is perhaps most clearly visible in Southeast Asia where an overarching network of multilateral ASEAN-China functional agreements and strategic partnership now complement China s burgeoning bilateral ties with the ASEAN states. Historical reference to traditional Chinese statecraft in the dependent lands to the South the Nanyang has already been introduced as factor in explaining contemporary is informing contemporary Chinese policy Concerns have been expressed that China s strategic ambitions seem to be focusing on establishing a preeminent sphere of influence designed ultimately to bind Southeast Asia to China. 5 Viewing China s role in Southeast Asia from the antipodes, veteran Australian analyst Milton Osborne describes China as the paramount regional power. Singapore s Tommy Koh, perhaps Southeast Asia s most influential diplomatic luminary, has opined that the United States is losing the competition for influence in Southeast Asia. The winner, at least for the time being, is the People s Republic of China. 7 Two retired U.S. ambassadors with 1 Bernard K. Gordon, Asia s New Trade Pattern: Implications for Indonesia, the US and Beyond (paper presented at a USINDO Open Forum, February 28, 2006). 2 David Shambaugh, ed., Power Shift: China and Asia s New Dynamic (Berkeley: University of California Press, 2006), 23. Kuik Cheng-Chwee, Multilateralism in China s ASEAN Policy: Its Evolution, Characteristics, and Aspirations, Contemporary Southeast Asia 27, no. 1 (April 2005): 102 22. Martin Stuart-Fox, Southeast Asia and China: The Role of History and Culture in Shaping Future Relations, Contemporary Southeast Asia 26, no. 1 (April 2004): 116 39. 5 Marvin C. Ott, China s Strategic Reach into Southeast Asia, (written presentation to the United States China Economic and Security Review Commission, July, 22 2005), http://www.uscc.gov/ 2005hearings/written_testimonies/05_ 07_21_22wrts/ott_marvin. Milton Osborne, A Changing Dynamic in the Region: China is Starting to Flex its Muscles down South, The Australian, April 7, 2006. Osborne took pains, however, to distinguish paramountcy from hegemony in that China was tolerant of ASEAN s other external relations including those with the United States. 7 Tommy Koh, America s Role in Asia: What Does Southeast Asia Want from Washington? PacNet 53, December 21, 2004.