11/20/2020 US Must Recapture Lost Ground in Southeast Asia or Risk Being Shut Out – The Diplomat
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THE DEBATE | OPINION
US Must
Recapture Lost
Ground in
Southeast Asia or
Risk Being Shut
Out
The “State of Southeast
Asia 2020” report is a
warning bell for American
influence in the region.
By John Goyer
February 14, 2020
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Credit: Facebook/ US Mission to ASEAN
Observers of U.S.-Southeast Asia relations have
worried for many years about declining
American influence in that region, and the
growing skepticism and negativism with which
the region views the United States. These
concerns have intensified recently, as current
and former government officials, business
leaders, academics, and other opinion leaders
increasingly voice worries that the U.S. is
withdrawing from, disengaging from, or
otherwise neglecting Southeast Asia.
The “State of Southeast Asia 2020” report,
recently issued by the Singapore-based Institute
of Southeast Asian Studies (ISEAS), is a timely
addition to this conversation. It surveyed 1,300
policymakers, businesspeople, journalists, and
civil society members from across the 10
Association of Southeast Asian Nations (ASEAN)
member countries. The results are sobering,
unnerving, and should be required reading for
anyone who understands or cares about the
region’s importance to American interests.
Some key findings: 47 percent of respondents to
the ISEAS survey have little or no confidence in
the United States as a strategic partner and
provider of regional security. Only 30 percent
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11/20/2020 US Must Recapture Lost Ground in Southeast Asia or Risk Being Shut Out – The Diplomat
have confidence that the United States will “do
the right thing” to contribute to global peace,
security, prosperity, and governance. More than
three-quarters believe that U.S. engagement
with Southeast Asia has declined under the
Trump administration, and 79 percent believe
that China is the most influential economic
power in the region. Only slightly more than a
quarter of respondents see the United States as
the most influential political and strategic power
in Southeast Asia, while 52 percent see China
that way. Just under a quarter express
confidence in the United States as the country
most likely to provide leadership to maintain
the rules-based order and uphold international
law. The majority of respondents in seven of the
10 ASEAN countries would “side” with Beijing if
forced (in some unspecified way), to make a
“choice” between China and the United States.
China even slightly edges out the U.S. in terms of
respondents’ confidence about which country
would provide leadership in championing the
global free trade agenda.
Three points about these results: 1) they are not
surprising; 2) they are disappointing; and, 3)
they are worrisome.
No Surprises
The results are not surprising because U.S.
actions have piped oxygen into the bellows of
Southeast Asian skepticism, and they certainly
reflect the types of commentary and criticisms
the U.S. Chamber hears regularly from the
region. The Trump administration’s withdrawal
from the Trans-Pacific Partnership (TPP), a
regional trade pact that included four ASEAN
countries, and which was painstakingly
negotiated over many years, did not engender
trust or good will. That was followed by various
threats of trade action against the 16 countries
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with which the United States runs the largest
trade deficits. This list included four ASEAN
countries (whose collective share of the U.S.
trade deficit amounted to only 11 percent). The
U.S. Chamber of Commerce has said repeatedly
that the trade balance is a poor gauge of the
success or failure of trade policy, a view shared
by most mainstream economists.
Then came tariffs on imported steel and
aluminum, a policy measure justified on
dubious national security grounds, and which
swept in several ASEAN countries. Subsequently,
under the same national security pretext, the
administration threatened to impose tariffs on
imported automobiles and auto parts. As the
U.S. Chamber of Commerce said at the time, “If
this proposal is carried out, it would deal a
staggering blow to the very industry it purports
to protect and would threaten to ignite a global
trade war.” It would certainly hurt some ASEAN
countries like Thailand, from which the United
States imported $3 billion in auto parts in 2017,
though it and its neighbors are not the primary
targets of this misguided policy. (To date the
threats have not been carried out, even as those
threats have been repeated).
In the months following the TPP withdrawal, the
Trump administration assured business that
new bilateral free trade agreements in
Southeast Asia would be negotiated and would
maintain and build upon the TPP’s gains. Three
years on, no such negotiations have even been
initiated, let alone concluded. Compounding this
has been the lack of presence by senior U.S.
government officials at the East Asia Summit, an
annual gathering of regional leaders, for the last
two years. We must recognize that the failure of
senior officials like the president, the vice
president, or secretary of state to attend such
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meetings is viewed as a high-octane diplomatic
slight in ASEAN capitals.
Southeast Asian policymakers have to grapple
with the unpredictability of U.S. international
economic and trade policy, and the concern, not
without evidence, that the region is not on
American radar scopes. Hence the skeptical
lenses through which they view the United
States. Under those circumstances, it would only
have been surprising if the survey results had
been much different.
More in Disappointment Than in Anger
This leads to a second observation, which is that
the results are disappointing because the
perceptions are in many ways at odds at least
with the commercial reality. That reality is that
U.S. contributions to the region’s economies are
immense. U.S. companies’ regional leadership in
terms of corporate governance, social
responsibility, labor practices, environmental
stewardship, and respect for and promotion of
the rule of law are their defining characteristics.
ASEAN countries actively court U.S. investment
and compete against each other fiercely for it.
Repeated surveys over a number of years by the
U.S. Chamber of Commerce and the American
Chambers of Commerce across Southeast Asia
show steadfast optimism about the region. The
same surveys have demonstrated that U.S. firms
in the region enjoy good reputations relative to
their Asian and European competitors, that the
vast majority of U.S. companies’ workforces in
the region are made up of local employees
(unlike some of their competitors), and they
offer innovation, flexibility, and creativity in the
marketplace. U.S. companies are extremely
competitive, and that competitiveness has a
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catalytic effect on their local partners and
suppliers.
While the United States is not ASEAN’s largest
trading partner, it still bought $206 billion
worth of the region’s exports last year, and it is
the largest foreign investor in the region. As
measured by the Bureau of Economic Analysis,
U.S. investment in the region stood at $271
billion at the end of 2018 (the latest data
available), more than U.S. investment in China
and Japan combined, and about 10 percent of
ASEAN’s GDP. U.S. companies directly employ
over 1 million workers in the region, paying out
$30 billion in salaries and wages in the process,
and indirectly support a much larger number of
jobs through sourcing, contracting, and other
business activity. U.S. companies are crucial to
ASEAN’s integration into regional and global
supply chains; by U.S. Chamber reckoning,
American companies in the region annually
generate roughly one-fifth to one-quarter of
ASEAN’s total exports of goods and services.
ASEAN countries are not blind to this, and a
robust U.S. economic presence is welcomed both
for its commercial benefits as well as its
strategic weight in terms of counterbalancing
China. But perceptions about U.S. commercial
engagement in the region may be clouded by a
number of factors. For one, state-backed
champions with bottomless pockets from China
and elsewhere bathe in the publicity of high-
profile mega-infrastructure projects around the
region. It’s not always positive publicity, as deals
in Malaysia, Myanmar, and elsewhere have
demonstrated, but these are nonetheless
projects in which American companies are not
players.
In addition, U.S. competitors recognize that
simply “showing up” in Southeast Asian capitals
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counts for a lot. Aside from the great optics of
high-level visits with elaborate deal signing
ceremonies and CEO delegations in tow, which
also count for a lot, such visits are effective
means by which foreign countries can propel
their business interests forward. By contrast, the
United States is seen to have a chronic
absenteeism problem.
What, Me Worry?
ASEAN countries may see China as pre-eminent
in the region, but that doesn’t mean they like it.
Only 6 percent of the survey respondents avow
confidence in China as a leader in maintaining
the rules-based order and upholding
international law (the EU can take heart here,
gaining a vote of confidence from 33 percent).
The overwhelming majority of survey
respondents worry about China’s political and
strategic influence in Asia. ASEAN has not, does
not, and will not want to “choose” between the
United States and China; its policy of choice
avoidance has been refined to diplomatic high
art over the years. The question is the
sustainability of that policy, especially if we
keep seeing these kinds of results in future
surveys.
In refreshing contrast, the United States
maintains strong strategic and cooperative
military relationships in Southeast Asia. And in
this respect, the Trump administration has
largely observed continuity with longstanding
U.S. policy, and even strengthened some of the
strategic relationships. This too is welcomed in
the region. Military-to-military cooperation is
very good, and Washington maintains robust
programs of cooperation in counterterrorism,
human trafficking, and other functionally vital,
if not headline-grabbing, areas. In those
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important respects, the United States has not
disengaged from Southeast Asia at all.
If this is a perceptions survey, and if the
economic and security relationship is
deceptively strong, then why worry? ASEAN will
not simply leave itself to China’s tender mercies,
and the U.S. presence is largely welcomed in the
region. If the United States wants to be in
Southeast Asia, it is essentially pushing on an
open door. So what’s the big deal?
The big deal, of course, is that perceptions drive
policymaking. Often unanswered and
unnoticed, negative Southeast Asian perceptions
could lead to policy choices that undermine U.S.
interests in the region. Heterodox trade policy, a
lack of presence, undue emphasis on trade
deficits, and other nontraditional approaches to
economic statecraft all combine to serve as an
irritant to U.S. relationships in Southeast Asia.
Continued unchecked, all of this will erode U.S.
influence in ways both subtle and pile-drivingly
obvious. The regional response to the U.S.
withdrawal from TPP – to move ahead without
Washington and to double down on trade deals
like the Regional Comprehensive Economic
Partnership, those with the European Union,
and others – should be instructive.
That is not to say that these setbacks cannot be
reversed. Indeed, efforts such as the Trump
administration’s Indo-Pacific Strategy are
laudable; the strategy focuses on real needs such
energy, infrastructure, and the digital economy.
It is still a work in progress and is not a
substitute for a forward-leaning trade policy.
However, it does provide genuine opportunities
for progress.
Here too, the ISEAS survey reveals skepticism
and cynicism; nearly a quarter of respondents
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see the Indo-Pacific Strategy simply as a China
containment ruse, and 23 percent see it as
undermining ASEAN’s relevance. More than
half, however, say the concept is unclear and
requires further elaboration. Those views can
be addressed head-on simply by a better
education effort, combined with robust and
vigorous implementation, credibly backed up by
resources, and guided by sound policy
objectives.
The open door that the United States isn’t
pushing on won’t stay open forever. It is time to
reckon with the intertwined nature of economic
and strategic competition in the region. The
upcoming U.S.-ASEAN leaders’ summit in Las
Vegas in March is near-term opportunity to
recapture lost ground. The United States needs
to strengthen its economic relations, maintain
and build on its military and strategic ones,
recognize the shortcomings of existing
approaches, particularly the mercantilist and
meaningless trade deficit yardstick, and develop
a better approach moving forward. When the
polling results are this stark, shrugging them off
is unwise. Instead, they should be taken as the
warning that they are.
John Goyer is the Executive Director of Southeast
Asia at the U.S. Chamber of Commerce.
TAGS
The Debate Opinion Southeast Asia public opinion
U.S. global image U.S. global leadership U.S. in Southeast Asia
U.S. influence in Asia US-ASEAN
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