The US foreign policy lexicon has changed. It used to be Asia-Pacific. Now for the Biden Administration it is all about Indo-Pacific. Initially I started this post in the following way: “Please, enough of the Indo-Pacific. Listen to the Biden Administration and it seems that that is all there seems to be in Asia.” Well, that is where the Biden Administration seems to be. Do I think US strategic actions really ‘sucks in India’, one of the world’s most elusive allies, probably not. But I’ll leave the Biden officials to figure that out. So, they will continue to trumpet, ‘Indo-Pacific’. Many of us will continue to use, ‘Asia-Pacific’.
More importantly, however, let’s turn our attention to the substance of Biden strategic policy in this key, if not the key, region in the international system. Our Brookings colleague, Ryan Hass at EAF briefly described Biden foreign policy efforts in the region over the last year – hard to believe that it is only a year and a bit:
America is back’, Joe Biden proclaimed in his first address as president to a global audience. Over the year that followed, the Biden administration delivered a mixed bag in its approach to the Indo-Pacific — several bold strategic strokes, greater than expected continuity with the Trump administration on China policy and timidity on trade policy.
A larger challenge for the Biden administration will be its absence of an economic agenda. They have announced plans to release an Indo-Pacific economic framework in 2022. Given that the framework reportedly will be non-binding and will not include trade or investment liberalisation, it may not get a lot of uptake, particularly when the region’s focus is on realising benefits from the Regional Comprehensive Economic Partnership and expanding the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
This is the heart of the dilemma in the Biden approach to the Indo-Pacific. Given the growing influence of China, does the Biden policy focus on the geostrategic, or on the regional and global economic. Opinion is clearly divided. Maybe the most surprising is Alan Beattie, the Financial Times trade specialist and opinion columnist. I would have believed, especially given some of his recent trade reviews that he would have strongly urged a focus on the economic but I was wrong. Here he is on February 2nd in an FT article, titled: “The US doesn’t need CPTPP to assert itself in the Asia-Pacific”:
As for geopolitical clout, recent experience suggests actual firepower is more important than the economic kind.
Trade deals don’t automatically mean political alignment or influence. …
None of the US’s strategic capabilities — military might, security deals like the Australia-UK-US agreement, cyber security expertise, intelligence-sharing, imposing harsh financial sanctions via the dollar payments system— require CPTPP membership. And all are surely more important in projecting American influence.
It’s true that US economic diplomacy over the past decade has been comically weak and inconsistent. It has been undermined by the excessive fear of trade deals among the American public, encouraged by lobbies like organised labour and the steel industry. But its ineptitude over the CPTPP should not lead to a counsel of despair. Trade deals are important, but they are neither necessary nor sufficient for American foreign policy to assert itself in the Asia-Pacific.
In contrast to this ‘tip of the hat’ to the geostrategic is, Tim Groser, New Zealand’s former ambassador to the United States, and a former trade minister there. He writes in the WSJ recently what seems to me to be an evident fact that trade is at as the heart of the Asia-Pacific
It was February 2017 and President Trump’s first address to a joint session of Congress. I was on the floor of the U.S. House as a guest of a pro-trade Republican congressman. As the president announced the U.S. withdrawal from the Trans-Pacific Partnership, I was thinking about a conversation I’d had with a particularly astute Asian ambassador. He’d suggested to me that if a book on the decline of American influence in Asia and the Indo-Pacific were ever written—and he hoped it never would be—its first chapter would be an account of the withdrawal of the U.S. from TPP.
China’s decision this month to apply for CPTPP membership should be a sharp reminder to Republicans and Democrats alike that if the U.S. is serious about competing with China in the Indo-Pacific it must confront a central reality: Having withdrawn from the TPP, the U.S. doesn’t yet have a trade strategy to back up its military posture in the region. China is the principal trading partner of many countries in the Indo-Pacific. The size of China’s economy, as well as its military and geostrategic ambition, means that Beijing will be at the center of the debate over every regional and global issue in the 21st century, from climate change to trade. Its ability to influence the outcomes of those issues will be determined by the degree—and effectiveness—of U.S. engagement.
The dismal politics of Washington seem to be at the heart of Biden strategic policy. There new trade policy arrangements are for the moment an anathema not only to the opposition Republicans but sadly to the all too protectionist Democrats. The EAF Editorial Board in an EAF piece laid out in part the current Biden policy:
US Trade Representative Katherine Tai’s slogan of a trade policy to serve America’s middle class is just that — a political slogan that has yet to gain any policy substance. Meanwhile, America’s middle class has dwindling income ripped out of its collective pocket by the tariffs that remain on Chinese imports, as both Tai and Commerce Secretary Gina Raimondo acknowledge that decoupling from the world’s largest trader is not a viable option.
From our trade colleagues Gary Hufbauer and Megan Hogan in a recent blog post in EAF they add:
Biden’s new twist on the China problem was giving top priority to Indo-Pacific engagement. After assuming office, Tai met with several Indo-Pacific trade ministers, government officials, and industry stakeholders to strengthen US trade and economic relationships in the region, as well as to gauge interest in the recently announced Indo-Pacific economic framework. But meaningful engagement in the region faces a number of challenges, from both inside and outside the administration.
Successful US economic engagement in the Indo-Pacific relies on the Indo-Pacific economic framework. But with better access to the US market off the table as an incentive for countries to join, the framework will likely prove an insufficient substitute for the CPTPP. Indo-Pacific countries will likely not prioritise the Indo-Pacific economic framework — which is non-binding and lacks trade and investment liberalisation — over the CPTPP — which is enforceable and delivers demonstrable benefits to its members. This is especially true given China’s application to join the CPTPP and the benefits member countries would enjoy from lowered barriers to China’s vast market.
Attempting to address social issues through trade policy is not new, nor is it confined to the United States. But insisting on such themes in trade agreements is problematic when leaders start to believe that trade agreements are only worth pursuing if they make a major impact on difficult social issues.
Alan Beattie, and notwithstanding his later in time reflection on CPTPP described above, underscored in a January piece in the FT his initial assessment for trade in 2022 and points to what is obviously the importance of trade in the Asia-Pacific notwithstanding the protectionist impulses in Congress:
Everyone agrees that a dominant role in the Asia-Pacific region is the big prize in trade governance, but the US’s efforts at leadership are looking pretty feeble. The Biden administration has signalled it will continue to flail about trying to make Donald Trump’s deal with China work. In lieu of joining the CPTPP (Comprehensive and Progressive etc, you know the one) the US is coming up with what seem likely to be flimsy, face-saving bilateral memoranda with some of its members. Despairing of a strong US presence, America’s allies in the region (Japan, Australia, New Zealand et al) will agonise about how much they can slow-walk China’s application to join the CPTPP.
The Biden people can emphasize the geostrategic – the Quad and AUKUS and whatever, and they can try and distract from the current regional trade arrangements, RCEP and CPTPP with new economic frameworks but influence does in the end come back to trade in goods and services and investment policy, notwithstanding what Washington would like to prefer.The Asia-Pacific strategic focus for the US and any other leading state is evident. Kishore Mahbubani, an acute analyst from the region has made it clear: the United States is at the moment fighting the wrong war. This is not, according to Kishore, principally a geopolitical contest but a geoeconomic one. While I might differ on the phraseology – meaning I see it less as ‘geoeconomic’ than organizing the global economy and its partners, and in the end more fully integrating the Asia Pacific, the US-China contest ‘at its heart’ is as much economic as political or strategic. And while the US is focused on the Indo-Pacific and the Quad, and for that matter AUKUS, and the politics back home prevents it from negotiating entry to the RCEP and the CPTPP, these latter arrangements remain vital to US policy and influence. The carrying forward of Trump protectionism does the US no good.
Michael Green and Evan Medeiros recently in Foreign Affairs underscored that time is running in the region and the Biden Administration will need to ‘suck it up’ and take on economic arrangements:
For the United States, both these challenges will intensify. On the economic front, China is expanding its financial footprint across the Indo-Pacific. U.S. allies such as Australia and Japan have privately pledged to help keep Beijing out of the CPTPP and to hold a place in the trade agreement for Washington. But the Biden administration has said it has no plan to return to the CPTPP, and officials in Canberra and Tokyo warn they cannot hold off China for more than a few years without some positive signals from the United States.
For these reasons, just hitting play again is not good enough. The Biden administration must not only sustain its current momentum but also broaden its actions in the Indo-Pacific, even as new crises arise in Ukraine and the Middle East. Biden especially needs to do more in the areas of economic statecraft and military deterrence—and to think creatively about how to do both. He must make clearer his approach to China, which has no intention of slowing its drive for regional dominance. The United States’ friends and allies in Asia will strongly support Biden if he acts boldly in the second and third years of his administration, but they will begin to lose their confidence if he does not. Especially after Trump, their patience is limited.
The politics is tough. But strong leadership requires it.
Image Credit: CNBC