Obama’s Vital Asia Trade Mission
Image Credit: White House

Obama’s Vital Asia Trade Mission


Asia is now home to more than 50 percent of the world’s economic activity, a long-anticipated benchmark vastly accelerated by China’s stunning, swift economic growth and its overtaking Japan as the planet’s second-largest economy. Asia’s dynamism is transforming the world, its institutions, and U.S. strategy. Secretary of State Hillary Clinton has described the shift to Asia as a “strategic pivot.”

But while U.S. foreign policy and security leadership are aptly refocusing on Asia, more needs to be done—and fast. This is particularly the case on trade.

The United States has lost ground in Southeast Asia over the last decade. In 2004, the United States was the Association of Southeast Asian Nation’s largest trading partner, with total trade valued at $192 billion. Today, China, a non-consequential partner for ASEAN in the early 1990s, is the region’s largest trading partner, with two-way trade totaling $293 billion in 2010.

Over the past 10 years, ASEAN has inked free trade agreements (FTAs) with China, Japan, Korea, Australia, New Zealand, and India. The United States has only one FTA in ASEAN—with Singapore. The result has been a ceding of market share and presence in the world’s fastest growing and most dynamic markets. No wonder U.S. economic growth has suffered. Ignorance and relative neglect of Southeast Asia have cost the United States jobs, growth, and influence.

That’s why the CSIS-U.S. ASEAN Strategy Commission has recommended that the Obama administration put a stake in the soil when the president travels to Indonesia for his third U.S.-ASEAN Leaders Meeting and first East Asia Summit. He should tell the region that the United States wants to negotiate a U.S.-ASEAN FTA. The signal would resonate loudly in capitals around the Asia Pacific. It would demonstrate that the United States is back, serious, and committed to reasserting its role as an economic leader in Southeast Asia.

There’s a real competition under way to define how economic integration of Asia will proceed. The stakes are high. The winning model will determine standards and rules, and will define the pace of trade and investment and support a move toward either global free trade or a return to regionalism and nationalism. Those left out of the predominant structure will experience slower growth and face grinding competition to engage from outside.

The two competing models are those of the U.S.-led Trans-Pacific Partnership (TPP) and the China-led ASEAN Plus Three — ASEAN plus China, Japan, and South Korea. Competition for economic integration is good for Asia. It should sharpen the sense of urgency for governments to move faster and more decisively. The TPP model is one based on a high-level U.S. FTA standard that’s comprehensive and binding.

The Chinese ASEAN Plus Three model puts geopolitical concerns above specific trade and investment rules and links countries together through a lowest-common-denominator formula that’s very effective and has a high impact in the short term. Trade expands rapidly as tariffs are reduced, but binding rules on investment, procurement, intellectual property, environment, and labor provisions aren’t addressed.

March 20, 2012 at 04:03

If Barack Obama wants to ensure opportunities, jobs and a safer world for the United States then there’s nothing more important than his trade mission to Indonesia.

Colin Chau
November 19, 2011 at 12:27

Err….. the Canadian government made it very clear it was not interested in joining the TPP… the same day news was out in the press about the TPP. It’s simply not in the best interests of Canadians to make the concessions involved when Canada has strong sectors to protect.

November 18, 2011 at 07:49

One crucially important note must be emphasized is truthfullness. Discussions on how and where to tackle a problem SHOULD never be comprised of deceptions and dis-honesties from any side or the whole “piece of works” would be useless.
While flirtations(harmless lies) are effective tactics at opening an avenue on communications,the seriousness of what followed should always be based on truths and honesties.
Respect for the other party is another important factor to “all weather relations”. lack of respects from or by any party automatically render the whole “piece-of-works” meritless or just “a waste of time”. China has been doing OK on this aspect of international relations in which “all are treated as equal” regardless of the size or shape of that particular nation.

November 18, 2011 at 07:22

Relations between nations as is the case between people,naturally and in many ways should be subject to certain “shake-ups “if you will. China’s relation with members of ASEAN,India,Pakistan,Australia,New Zealand,Fiji,Tonga,and many others around the globe will inevitably be subject to certain changes and they are un-avoidable or just “human natures”. Naturally, it is the manners and approaches at clearing mis-understandings,developing trusts,and mutually tackling difficulties and overcoming obsticles as nations move along. Likewise,dis-agreements are reflections of the status-quo that are in need of repair of corrections.
China’s attitude toward all or any dis-agreements is plain and clear-that is to mutually tackling the issues and open up new avenues of trusts and understandings.
One good example is the relationships between a man and a woman. Disagreements if tackled properly would lead to deeper and more enhenced “LOVE”. Hence, while riding on a bumpy road is uncomfortable, the shakings and joltings can also be fun or at least one will not easily fell asleep while driving.
In wrapping up, China’s works will continue to on the increase as the nation engages or inter-acts with more and more nations in the World.

November 18, 2011 at 01:56

@Huang: You may be right! china has a lot of friends in Asia. Let see, NK, Pakistan, Iran, Myanma… all the good states; but wait, discount Myanma as she’s turning away. All others are “rogue” states, forming up coalitions with the US. :)

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