Asia will move ahead no matter what
With continued conflict in the Middle East and Europe, the US “pivot to Asia” has taken a back seat in the past few months. On Wednesday, the Center for Strategic and International Studies reignited a discussion on US interests in Asia with Singapore’s Foreign Minister and Minister of Law, K. Shanmugam. The event was hosted by Ernest Z. Bower, Senior Adviser and Sumitro Chair for Southeast Asia Studies at CSIS, and moderated by Ambassador J. Stapleton Roy, who spent much of his diplomatic career in East Asia.
Shanmugam emphasized the importance of the Trans-Pacific Partnership (TPP), which would set new terms for trade and business investment among the US and 11 other Pacific Rim nations—a group with an annual gross domestic product of almost $28 trillion that represents 40% of global GDP and one-third of world trade. On June 12, the US House of Representatives rejected a bill that would have provided assistance to workers displaced by global trade, hindering completion of the TPP this year.
The TPP, Shanmugam thinks, offers a mutually beneficial deal by allowing Asia to benefit from US dominance in the energy and IT sectors and granting the US economic leverage over close to half the world’s GDP. But the region will not wait for America. In today’s global economy, China has arisen as a significant player with the ability to set up alternative multilateral institutions to which other countries will happily subscribe. This does not mean the Southeast Asian countries will choose the “Chinese side.” Indeed, the region wants the US to partake in its prosperity, as it did after WWII. Nevertheless, the fact remains that in today’s multipolar world, the U.S. cannot control the outcomes—even if it is the single most important power.
Another pressing regional issue is the South China conflict. China, Taiwan, Vietnam, Malaysia, Brunei and the Philippines all have competing territorial and jurisdictional claims, particularly over oil and gas reserves in the sea. Little progress has been made in resolving these conflicts. Shanmugam believes it is unrealistic to expect any understanding on the issue of sovereignty. No claimant will be willing to give up its claims. A more feasible outcome is a Code of Conduct that regulates the behavior of the claimants. The US can play a role by encouraging the process of reaching agreement on such a Code of Conduct.
Shanmugam also elaborated on the slim possibility of developing an ASEAN economic community. Unlike member states in the European Union, there are huge disparities in the GDP of Asian countries. Singapore’s GDP per capita is $60,000 while that of some other countries is as little as $3000. Furthermore, Asian states don’t share cultural, religious and historical experiences that allow for integration. Islam dominates in Indonesia, Buddhism in Thailand and even Communism is a religion in some places.
What is doable is easier movement of goods and services across the Asian states. The creation of manufacturing hubs, heavy investment in infrastructure, reduction and equalization of tariffs across borders and simpler rules and regulations can contribute to making the ASEAN community an economic powerhouse. The US needs to decide whether it wants to be a part of the resulting prosperity. Either way, ASEAN countries will forge ahead to build a brighter future.
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