China ready to fill Asia Pacific vacuum left by noncommittal US
The global spotlight turned to Asia Pacific this week, with world leaders from Russia to Australia and India to Canada attending the Association of Southeast Asian Nations (ASEAN) and Asia-Pacific Economic Cooperation (APEC) summits. With states in attendance accounting for more than 50 percent of global gross domestic product and nearly half of world trade, the US-Chinese rivalry took center stage in their respective attempts to shape the regional order.
With Donald Trump, surprisingly, skipping the events, his deputy Mike Pence is pitching the US case. On Monday, before starting a trip taking in Japan, Singapore, Australia and Papua New Guinea, the US vice president asserted that Washington seeks a region “where sovereignty is respected, where commerce flows unhindered and where independent nations are masters of their own destinies... while some nations now seek to undermine this foundation, the US is taking decisive action to protect our interests and promote shared success.”
While not acknowledging China explicitly here, Pence is primarily referring to Beijing, which has its own ambitions to shape the regional order. To that end, President Xi Jinping and Premier Li Keqiang are this week promoting not just their Belt and Road Initiative — one of the biggest of its kind in history, with a trillion dollar price tag. In addition, they are doubling down on their visions for a Free Trade Area of Asia Pacific (FTAAP) and a pact known as the Regional Comprehensive Economic Partnership (RCEP).
The FTAAP has assumed new importance for Beijing since the inception of the Trans-Pacific Partnership (TPP), which was originally promoted by the Obama administration. According to Xi, the FTAAP would provide a significantly greater economic boost than TPP (which comprises Singapore, Australia, New Zealand, Japan, Canada, Brunei, Chile, Peru, Vietnam, Malaysia and Mexico, but not the US as was originally intended because of Trump’s rejection of it).
And Beijing’s push for FTAAP and RCEP (which comprises the 10 ASEAN members plus India, Australia, Japan, South Korea and New Zealand, but again not the US) thus provides an alternative model for regional economic integration much more conducive to its national interests. This is not least because China will explicitly be part of the new economic agreements and will shape their design by creating free trade areas, with it potentially at the center.
And it is in this context that the US is this week setting out its own stall for the shaping of the regional order under three pillars: Promoting prosperity; enhancing security; and supporting transparent and responsive government, the rule of law, and protection of individual rights. Yet, despite the ambitions set out here, there are concerns amongst allies in Asia Pacific that this is too little, too late by the Trump team, especially following its withdrawal from the TPP. A key remaining question now, for US allies, is will Washington step up to the plate and develop a comprehensive and well-funded grand strategy to embed US influence, as Obama had intended with TPP?
There are some signs in the last few months that Trump is starting to wake up to this. Last month, for instance, he signed a bill into law that will create a $60 billion International Development Finance Corporation (IDFC) aimed at strategic investment in developing countries. The new IDFC will move forward US interests in Asia Pacific and beyond, including supporting US firms in key developing markets to enhance the nation’s geopolitical influence vis-a-vis China.
This latest step in Washington’s response to China’s growing influence builds on other recent announcements by US Secretary of State Mike Pompeo. In July, for instance, he committed $113 million in regional investments focused on technology, energy and infrastructure as a “down payment” on future US commitments to Asia Pacific.
With Trump pulling the plug on US participation in TPP, a vacuum exists that either the US or others will fill.
Extensive as these pledges are, however, there appears to be no overarching plan to bring them all together in a powerful, strategic way. And this perceived lack of ambition has left allies anxious, especially given Trump’s uncertain personal commitment to the region, as underlined by his non-attendance this week.
History points to what may now be needed to fill this vacuum. In the post-war period, the US has undertaken a global institution-building project on a largely bipartisan basis, at least until the election of Trump, to encourage the growth of democracy and open markets across the world.
From 1945, US administrations helped create and nurture key bodies that exist to this day, from the UN to the IMF and the World Bank. Inspired by this success, both the administrations of George H.W. Bush and especially Bill Clinton sought to respond to the collapse of Soviet communism by encouraging the creation of a range of economic institutions including not just APEC, but also the World Trade Organization and the North American Free Trade Agreement too.
With Trump pulling the plug on US participation in TPP, and possibly in other institutions such as the WTO, a vacuum exists that either the US or others will fill. And the danger for Washington is that, unless it acts decisively, irresistible momentum will build for a regional architecture, including RCEP and FTAAP, which will allow Beijing to assume the upper hand, damaging US influence not just with local allies, but potentially well beyond too.
- Andrew Hammond is an Associate at LSE IDEAS at the London School of Economics