President Obama’s 10 day tour of Asia’s four largest democracies showed a continued commitment to engage Asia, even if difficult Tea Party politics at home might derail the practicalities of increased regional engagement. For Americans, President Obama brought home deliverables on jobs in India and helped lay groundwork for trade agreements with Korea. For some Asians, there is a feeling of relief that US-Asia relations will continue.
Yet while the trip was positive, there is no room for complacency. While the US and Asia remain interdependent, there remain significant obstacles to the development of the post-crisis relationship, in spite of leaders’ best intentions.
The problems of the global economic crisis are not over, but are changing as initial policy ‘cures’ create other ‘side-effects’ that can be equally troubling. Global coordination is needed, but there has been a lack of cooperation among a number of countries, as each pursues the ‘national interest’ without full regard to the impact of this upon others.
In this post-crisis world, problems associated with global cooperation have been exacerbated by domestic changes in the US and China, and changes to their relationship. We see a wounded America. It is still powerful but has weakened economically, politically and in ‘soft power’ terms.
This change in stature could be seen at the G20 meeting in Seoul. The US arrived expecting to push China for currency reform. Instead, the US found itself on the other side of the argument as other G20 countries criticised its QE2 bond-buying plan. The grouping also shunned a US plan to reconcile bitter divisions over trade imbalances and exchange rates.
And though the Obama administration is engaging Asia on many global issues, it is distracted by domestic politics and limited in economic engagement. Politics in the US, notably the Tea Party movement, is restive and inward looking. Much of America feels that it has been harmed by unfair trade and job loss to Asia. To them, globalisation has an ugly face, and one that is Asian.
The mood of the American voter has turned against trade and globalisation, and, potentially, against Asia If this continues, it is likely that Obama or his successor will turn inward, and any American engagement with Asia will be purely framed in terms of America’s narrow self-interests.
China has been the target of many American complaints about globalisation.
China was conspicuously absent from Obama’s Asian tour. Differences continue to brew between Washington and Beijing, over a range of issues from North Korea, the Nobel Prize and democracy to the value of the yuan and the complaints of iconic American companies such as Google and General Electric.
Friction between the US and China may complicate broader regional dynamics. For example, though US engagement and recognition of ASEAN has ramped up, it would be unwise for ASEAN to be overly dependent on the United States. ASEAN must not give the impression that it seeks for the US to contain China. In spite of this summer’s flare-up of tensions in the South China Sea China has engaged ASEAN consistently and benevolently over the last decade. ASEAN should not be afraid to extend the benefit of the doubt to China.
This does not mean America’s renewed interest should be rebuffed. On the contrary, every effort should be made to engage the USA economically in a positive, win-win way. Since the end of 2009 the USA has participated in TPP negotiations. This has energised the group and APEC. Additionally, the long awaited Korea-US free trade agreement was finally concluded in December 2010. To enrich and sustain its engagement, however, the Obama administration needs to not only show that it is able to engage on economic issues but that such engagement is good for the US economy and American workers.
The Indian deals signed during Obama’s visit are a positive example. Asian countries should be open to US company-level engagement for trade and investment, to liberalising to ensure their free and fair access to our markets, and to removing non-tariff barriers. If trade with the USA is really a win-win, Asia must not shy from being fair and explicit in ensuring that Americans do — in fact and perception — win. Opposition parties in Korea have already labeled the trade pact with the Americans ‘humiliating and treacherous,’ though the ruling party’s majority should be enough to push it through.
There is a fundamental attitude that the United States, China, and the emerging Asian powers need to embrace if they and all the rest of the region are to move ahead in cooperation. This is the ‘Power of &’ — the belief that it is possible and indeed desirable for China to rise and the United States to remain powerful and influential in Asia. Maintaining the ‘Power of &’ also means believing and acting on the premise that Asian countries can be more economically and politically integrated among themselves and with the United States.
A new context for American-Asian relations is emerging. America now faces a spectrum of strategic choice running from potential isolationism grounded in the idea of American decline to the acceptance of a more multipolar world and a continued engagement on different terms. Leaders on both sides must work to smooth this new and difficult transition.
Author: Simon Tay, SIIA
Simon Tay is chairman of the Singapore Institute of International Affairs and author of Asia Alone: The Dangerous Post-Crisis Divide from America.
This is part of a special feature: 2010 in review and the year ahead.
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