The US has gained brownie points among Southeast Asians, who put great store in Washington championing free trade and upholding the rules-based order. But Washington has its work cut out for it in deepening economic linkages to Southeast Asia and the broader Indo-Pacific.
It is peculiar to observers of geopolitics in Southeast Asia to see how, despite the wax and wane of the American interests, the region remains hopeful in wanting to see greater engagement from the United States in the region. The latest State of Southeast Asia 2022 Survey Report suggests that while China continues to be acknowledged as the most influential economic and political-strategic power in the region, the US has gained some ground. In 2022, 9.8 per cent saw the US as an influential economic power, up from 6.6 per cent in 2021. 68.1 per cent of respondents welcome the growing regional economic influence of the US. Trust in the US to ‘do the right thing’ improved this year (52.8 per cent) compared to last year (47.0 per cent), while the number of US sceptics dropped in tandem from 31.1 per cent to 29.6 per cent.
One should give credit where credit is due. The Biden Administration has conducted several high-level bilateral visits to Southeast Asia, including Deputy Assistant Secretary Wendy Sherman, Defense Secretary Lloyd Austin, Vice President Kamala Harris, Secretary of State Anthony Blinken in its first year. Besides turning up at ASEAN and East Asia Summit meetings, there was no ‘big bang’ in its engagement with ASEAN.
What the Administration has done well is to engage its allies through strengthening existing or establishing new security arrangements such as the Quadrilateral Security Dialogue (Quad) and the Australia-UK-US (AUKUS) security arrangement. The two arrangements were made without ASEAN’s inputs, but Washington maintains that the grouping is the centrepiece of US engagement with the region. The pacts show ASEAN that it is a reliable security partner. The irony is that Southeast Asian respondents did not pick up on that narrative in the same survey. The view of the US as a reliable strategic partner and provider of regional security declined from 54.7 per cent last year to 42.6 per cent this year. This is not an insignificant drop.
The tone and tenor of US engagement with the region has moved from relative neglect under the Trump Administration to now an over-emphasis on military-security arrangements. What is missing from the engagement, and a sore point for many ASEAN governments is the absence of an intention to strengthen trade linkages with ASEAN. The US walked away from the then Trans-Pacific Partnership and is sitting out the Regional Comprehensive Economic Partnership (RCEP).
Washington continues to repeat ad nauseam that it is Southeast Asia’s top foreign direct investment (FDI) partner and second-largest trading partner of ASEAN. But the effect is quite the obverse: the US seems to be hinting that military-security issues are of paramount importance in their engagement with the region.
The White House press briefing following the release of a 19-page ‘Indo-Pacific Strategy of the United States’ confirmed that while the US recognises that the region wanted more in terms of an economic agreement, there will not be one. The response to that question in the briefing was that the US ‘is already very engaged economically’. One of the key pillars of the Indo-Pacific Strategy is shared prosperity which envisages the creation of an Indo-Pacific Economic Framework (IPEF) that will promote and facilitate trade, create a new digital economy framework (a framework within a framework?), improve supply chain resilience and security, bridge the infrastructural gaps through Biden’s Build Back Better World and play a role in rules-setting for an economic transformation that is much needed in the post-pandemic world.
The tone and tenor of US engagement with the region has moved from relative neglect under the Trump Administration to now an over-emphasis on military-security arrangements.
Given the paucity of details, well-intentioned researchers from Washington-based think tank CSIS have attempted to fill in the gaps for what an Indo-Pacific Economic Framework might look like. But mind you, it is a framework, not a hoped-for regional trade agreement. A framework suggests an overarching structure to be constructed. Perhaps one that can be flexible and non-binding, as this report has confirmed. A one-page set of talking points used by Administration officials during their rounds made it clear that Congress will be consulted closely but that the scope of the framework would be well within executive command. Broad bipartisan support from Congress for an issue as critical as securing the Indo-Pacific is present.
Still, despite all the pledges made, the IPEF will fall short of expectations of a trade agreement that grants new market access. So, where does that leave us?
In good faith, it will be up to US partners and allies to engage and shape the new framework since the Administration seems to be suggesting this will be an ‘initial public-facing framework that establishes principles and concrete goals for each of the seven proposed modules of cooperation’. This leaves room for future discussions on how the framework can evolve into a binding agreement. Four ASEAN governments, presumably the ‘leading regional partners’ of the US — Indonesia, Malaysia, Singapore and Vietnam — and US allies (Australia, Japan and the Republic of Korea) will be consulted.
The new survey also puts the US in a top position for its leadership in championing global free trade and upholding the rules-based order. The US’ share expanded from 19.7 per cent to 30.1 per cent, overtaking the EU, the long-standing champion of global free trade. This is reflective of aspirations than any actual reality. The US’ leadership in maintaining rules-based order and upholding international law also grew from 24.5 per cent to 36.6 per cent.
Again, this is an expression of hope that the US would do more despite its dismal trade agenda in the region.
Washington wants to build on its military-security focus but a move towards a direction aimed at prosperity and economics — key tenets in Washington’s Indo-Pacific strategy – would make it more palatable to ASEAN states. If a trade agreement is not going to cut it this round, ASEAN should exercise agency and drive the narrative on new, emerging areas of cooperation such as clarifying the rules of engagement for digital economy, making ASEAN’s digital masterplan a cornerstone, promoting trade and investment facilitation, adopting a green taxonomy and creating a mega digital economic partnership. The modality and rules of engagement will be up to anyone to craft.
It is for the region to hope for more but remember, hope deferred can make one’s heart sick.
Sharon Seah is Senior Fellow and Coordinator at the ASEAN Studies Centre, ISEAS – Yusof Ishak Institute.