“API Geo-Economic Briefing” is a weekly analysis of significant geopolitical and geo-economic developments in the post-pandemic world. The briefing is written by experts at Asia Pacific Initiative (API) and includes an assessment of burgeoning trends in international politics and economics and the possible impact on Japan’s national interests and strategic response. (Editor-in-chief: Dr. HOSOYA Yuichi, Research Director, API & Professor, Faculty of Law, Keio University)
This article was posted to the Japan Times on January 17, 2021:
API Geo-economic Briefing
January 17, 2021
Why a new Asia policy is needed under Biden
Chairman, Asia Pacific Initiative (API)
U.S. President-elect Joe Biden is likely to attach more importance to Asia as well as its allies when he is sworn in on Jan. 20, raising expectations from the region for a more engaged United States in the coming years.
Amid China’s increasing assertiveness, what Biden needs is a new rebalancing policy on Asia — to establish a multilateral trade policy in the wider Asia-Pacific region that will enable rule-based business standards.
“We’re a Pacific power, and we’ll stand with friends and allies to advance our shared prosperity, security, and values in the Asia-Pacific region,” Biden wrote in an op-ed in October. His remarks indicate his intention for the United States to maintain its presence in the region and not to weaken its forward deployment and power projection capabilities in the West Pacific.
“President Biden will show up and engage ASEAN (the Association of Southeast Asian Nations) on critical issues of common interest,” incoming Secretary of State Antony Blinken said. The comment alludes to the fact that President Donald Trump never once attended the East Asia summit, led by ASEAN, during his term in office.
Reflecting Biden’s intention to focus on Asia, on Jan. 13 it was announced that Kurt Campbell, chairman and chief executive officer of the Asia Group, will be appointed deputy assistant to the President and coordinator for Indo-Pacific affairs on the National Security Council as part of the Biden administration.
While as Coordinator for Indo-Pacific Affairs, Campbell reportedly will report directly to national security advisor Jake Sullivan, and the position will allow him to manage the NSC directorates covering issues related to Asia and China.
These are all encouraging signs. Furthermore, Campbell’s presence and voice at the top echelon of foreign policy making in the White House is particularly reassuring. He is deeply trusted and respected as the foremost strategic thinker and Asia specialist throughout the region.
Nonetheless, it will take enormous effort to restore the damaged US leadership and resulting image.
During the four years of the Trump administration, the U.S. has been left behind in efforts to construct new regional architecture in the Asia-Pacific.
Immediately after Trump was sworn in, he declared his intention to unilaterally withdraw from the Trans-Pacific Partnership, a 12-member multilateral framework advocating free trade in the region.
Near the end of his term, the U.S. had to stand and watch as 15 Asian countries, including Japan, China and South Korea, signed the Regional Comprehensive Economic Partnership agreement.
Some in Washington worry that regional partnerships in Asia will be led by China, without the participation of the U.S.
For its part, Asia does not intend to wait for the U.S. to engage in the region.
Asia has the world’s most dynamically developing economy, comprising nations with the world’s top, second and fourth largest populations — China, India and Indonesia, respectively — and ASEAN is expected to overtake Japan and become the world’s fourth economic power by 2030, after the EU, U.S. and China.
The region is shifting from being the world’s factory to being the world’s innovation center, nurturing a middle class with the most ambitious social climbers and the most abundant savings.
Furthermore, many East Asian countries and regions have been coping with the COVID-19 pandemic more promptly and effectively than anywhere else in the world.
The post-COVID-19 world is highly likely to shift its weight even more from the West to East Asia, and the global community will have to follow where Asia is heading.
The Biden administration’s shift of focus to the region should be taken as yet another indication of its growing significance.
What is needed for the U.S. now is a new rebalancing strategy to respond to drastic changes in the strategic environment in Asia and to work with the region to build peace and stability.
Rebalancing to Asia
Since the end of World War II, the U.S. has vigorously pursued strategic rebalancing toward Asia in line with drastic changes in the international environment, and has contributed to peace and stability in the region.
The first rebalancing came after the war, under President Harry Truman’s administration, and at the dawn of the Cold War.
It was formulated by George Kennan, director of policy planning at the State Department, who had advocated the containment strategy for the Soviet Union.
Kennan proposed that the U.S. fundamentally revise its Asia strategy, which had been implemented in the 1930s and 1940s from the Manchurian Incident up to the Pacific War, and drastically shift its focus from China to Japan.
Japan and the U.S., which fought on opposite sides in WWII, became allies little more than five years after its end.
Japan was then invited into the Bretton Woods monetary system, leading to the nation’s postwar economic miracle and bringing it closer to the economies of Western nations.
The next rebalancing was rapprochement with China in the early 1970s under President Richard Nixon’s administration.
Nixon and his national security advisor Henry Kissinger’s engagement policy with China was a strategic restructuring to partner with that country for the sake of balancing against the Soviet Union and withdrawing troops from Vietnam.
China effectively accepted the U.S. military presence in the Asia-Pacific region and Washington later established diplomatic relations with Beijing.
It also acknowledged the U.S.-led international order and turned toward reform and a policy of opening up, bringing about an economic miracle under then-leader Deng Xiaoping.
Through constructing a second rebalancing policy on top of its first rebalancing strategy, the U.S. managed to maintain peace in the Asia-Pacific region over a period of 70 years.
But the U.S. was faced with the need to rebalance its Asia strategy once again in the 2010s under President Barack Obama’s administration.
As China stepped up its moves for power and influence, the U.S. aimed to strengthen defense cooperation with its allies and partners, as well as expanding its naval capabilities in the region.
The Pentagon’s Defense Strategic Guidance issued in January 2012 stressed the need for a rebalance toward the Asia-Pacific region, and was followed by Defense Secretary Leon Panetta’s remarks later that year that the Navy would reposition its forces from a roughly 50-50 split between the Pacific and the Atlantic to a roughly 60-40 split by 2020, indicating a clear strategic pivot to Asia.
However, the Obama administration’s rebalancing ended in failure. During Obama’s eight-year term, U.S. armed forces in the Asia-Pacific region hardly increased, and the cut in military spending led to lower budgets for procurement and training.
Why didn’t Obama’s rebalancing strategy succeed?
Firstly, the administration had been focusing too much on establishing a framework for U.S.-China relations before creating a strategy for the whole of Asia, and tried to form its Asia policy within the scope of its China policy.
A month after the U.S. announced the new strategic guidance, China proposed that the two countries establish a “new type of great power relations.”
The approach was apparently intended to create an environment more conducive to China’s rise — by promoting a notion that there was room in Asia for two superpowers to coexist — and the Obama administration at one time had been almost taken in, welcoming China playing a greater role in regional and global affairs.
Secondly, regarding the territorial dispute between China and the Philippines over Scarborough Shoal in the South China Sea, the U.S. ended up allowing China to maintain a constant presence there.
The administration also failed to stop China’s revisionist actions of building artificial islands and military facilities in the Spratly Islands in the South China Sea, leading to increased doubts over the United States’ deterrence ability and credibility.
Moreover, the administration was slow in recognizing the spread of the notion of America’s decline in China following the 2008 global financial crisis; the geopolitical risk of China’s hegemonic ambitions known as the “China dream”; the major advance of the country through high-tech cyberpower backed by artificial intelligence and 5G telecommunications networks and the geoeconomic threats of China weaponizing its economic power.
It also responded insufficiently in terms of coping with the impacts of globalization and the fourth industrial revolution burdening domestic industries and society, as well as with the rise of populism and the political divide that came as a result.
Although the Obama administration managed to conclude TPP negotiations, it failed to ratify the deal.
In the 2016 U.S. presidential election, not only Trump but also all the other major potential candidates including Hillary Clinton were opposed to the United States joining the TPP.
The Biden administration must assess the reasons for the failure of the Obama administration’s policy and come up with a new rebalancing strategy based on that assessment.
What is most needed now is the establishment of a comprehensive and multilateral trade policy in the Asia-Pacific region.
American interests lay not in tariffs but in rules of law and the establishment of rule-based business standards.
Trade and investment in the Asia-Pacific region are the areas in which China has the greatest competitive advantage. The slower the U.S. is in getting engaged in multilateral policies, the more China will benefit.
In the summer of 2013, Biden met Japan’s then-Prime Minister Shinzo Abe in Singapore, reiterated the central importance of enhancing the U.S.-Japan alliance for regional peace and stability — the key to successful rebalancing — and stressed the need to move forward in negotiations toward the TPP agreement.
Regarding trade policy, the Biden administration must prepare a narrative different from both labor unions’ protectionism and Trump’s “America First” policy.
The new administration should also establish a China policy centered on competitive coexistence.
Competitive coexistence means you cannot coexist unless you compete. And if the U.S. fails to compete, it will be dominated by China. The U.S. needs to fight against China’s geoeconomic threats, as well, along with its allies.
Allies, not dependents
Before anything else, Biden’s top priority is likely to be building back the nation after the COVID-19 pandemic. That means participation by the United States in global affairs will become more selective than ever.
At the same time, the country’s allies also need to break away from being dependent on the U.S.
In order to make the U.S. rebalancing to Asia strategy in the 21st century work, cooperation with more independent and reliable allies is crucial.
The Biden administration should empower its allies, including Japan, to move in that direction and work to bring out their power.
The time is ripe. When the Obama administration came up with its policy to rebalance to Asia, countries in the region reacted cautiously, as they thought it meant a strategy of containment regarding China.
Now Japan and other U.S. partners in Asia are waiting for a full-fledged rebalancing policy from the Biden administration.
The views expressed in this API Geo-economic Briefing do not necessarily reflect those of the API, the API Institute of Geo-economic Studies or any other organizations to which the author belongs.