The evolution of Asia’s regional trade architecture is one of the most important developments in the global economy. The continued emergence of China and India, numerous free trade and investment initiatives such as the Australia-Malaysia FTA and the Japan, China and Korea Trilateral Investment agreements and a wide range of regional economic cooperation and integration efforts are catalyzing new patterns in production supply chain networks and investment trends throughout East Asia. 

In terms of a long term vision of bringing Asia’s FTA’s together, the various paths forward involving APEC, the East Asia Summit and the Trans-Pacific Partnership all have one thing in common: the centrality of ASEAN. Indeed, how ASEAN’s leading economies navigate these processes in relation to the objectives of their own regional trade liberalization and integration effort – the formation of the ASEAN Economic Community – will help shape Asia’s regional trade landscape.

The outcome of the 18^th ASEAN Economic Ministers (AEM) Retreat last February in Naypyidaw was the crafting of a draft document entitled the ASEAN Framework on Regional Comprehensive Economic Partnership (RCEP). This RCEP articulates an ASEAN-led process for restarting and elevating discussions with FTA partners (namely Australia, China, Japan, South Korea, India, and New Zealand) and other trade partners to join ASEAN in creating a free trade area that targets the removal of 95 percent of tariffs on goods.  The RCEP was formally endorsed by the ten ASEAN leaders at the 2011 ASEAN Leaders Summit.

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Speaking recently at Chatham House, Herman van Rompuy – president of the European Council – used a theatrical metaphor to refer to Europe’s role on the world stage. He said: “faced with the new play of global interdependence and global governance, we [the EU] need a presence in all the world’s regions.” While acknowledging the importance of Asia for European interests, his message about Europe’s influence in that part of the world was straightforward: “Europe is clearly not a Pacific power and will not become one.”

Catherine Ashton, the EU’s chief diplomat, delivered a more confident message during her visit to Asia earlier this year, stating that developing comprehensive relations with Asia is one of the EU’s major strategic objectives and that the EU wants to be an “active and constructive” player in Asian regionalism. To bring van Rompuy’s metaphor to modern times, in a movie about the politics of the Asia-Pacific region, would Europe play a leading role or only be a background actor?

The foundations of an EU strategy for the region were laid in 2007, when the Council published the East Asia policy guidelines. A revision of the document has been on the EU agenda for some time, but a final agreement on the outcome has yet to be reached, which leaves the club of 27 with policy prescriptions that are often outdated. The EU’s ties to the region are significant: the European Union is China’s biggest and ASEAN’s third biggest trading partner. It’s also the largest investor in ASEAN countries with an average of 20.6 percent of foreign direct investment over the past three years. The scope of the EU’s cooperation with the region is broad and encompasses not only a number of Free Trade Agreements – either already in force (South Korea) or under negotiation (ASEAN, India, Malaysia, Singapore, and Japan) – but also bilateral summits, participation in regional fora, and parliamentary dialogues with Asian officials.

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With the standoff over the Scarborough Shoal (“Huangyan Island” to the Chinese and “Panatag Shoal” to the Filipinos) having entered its second month, many are wondering how long the tiny Philippines will stand its ground as Beijing steps up its diplomatic and military pressure. 

If this were simply a legal matter, the deck would surely be heavily stacked against the Chinese. The shoal is located clearly within the country’s 200-nautical-mile Exclusive Economic Zone (EEZ) and hundreds of miles from the Chinese mainland.

International law also favors the Philippines on another level. Following the Island of Palmas Case as an international legal precedence, Manila’s “actual, effective, and continuous” exercise of control and sovereignty over the Scarborough Shoal gives it the upper hand in any third party international legal arbitration. In fact, in 2010, the northern town of Masinloc (200 kilometers away) claimed the shoal as part of its municipality. 

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The recently concluded negotiations between Iran and the world powers, the so-called P5+1, is perhaps the first serious attempt at resolving the Iranian nuclear impasse since the 2009 botched negotiations. Both sides entered the talks with a strong sense of optimism, thinking maybe this time things would be different.

However, to everyone’s disappointment, the talks ended with a last-ditch agreement simply to hold more talks in the near future. In short, there was no major breakthrough, as parties really began to realize the true depth of their differences. 

Ahead of the Baghdad talks, the Iranians campaigned heavily to prepare their domestic constituency for an eventual deal with the West, while intensifying bilateral talks with the International Atomic Energy Agency in order to craft a framework agreement for a more rigorous inspection regime. Moreover, the Iranians, unlike before, significantly narrowed the scope of negotiations by no longer venturing into vague and general topics such as world peace, dialogue of civilizations, and terrorism. Clearly, this time, Tehran showed much more interest in clarifying outstanding questions as to the real nature of its nuclear program.

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A power transition, caused mainly by the rise of China, is going on in East Asia. China has become the No. 1 trading partner of almost every country in the region, while its military power continues to grow. Asymmetrical interdependency between China and other regional states will continue to grow.

At the same time, East Asia has witnessed architectural and structural changes over the years. Multilateral organizations and institutions such as the East Asian Summit (EAS), the China-Japan-Korea Summit, the ASEAN-Plus-Three, and the ASEAN Regional Forum (ARF) have become increasingly active, and are expected to expand their respective roles. And increasing dynamism for integration and cooperation among the countries in the region has become highly visible and multidimensional. On the other hand, despite efforts to modernize the alliance system, U.S. bilateral alliances have remained relatively static.

Nationalistic sentiment, territorial disputes, and history issues have recently become more contentious among countries in the region, which impedes further integration and cooperation and could become the source of conflict. In some countries, democratization is taking place. Uncertainty over whether this transformation will be smooth is another source of potential instability. In a word, the current major characteristics of East Asia can best be summed up as “iAsia” – integration, innovation, investment, instability, and inequality.

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Arguing against the declinist mood in U.S. politics these days, Robert Kagan, in “Not fade away: Against the myth of American decline,” recalls the triumph of the Cold War as a confidence-booster for worried Americans.

The challenges confronting the United States today, Kagan contends, “are not greater than the challenges the United States faced during the Cold War,” when Washington worked to contain Soviet expansion by cultivating ties with war-depleted countries in the Soviet Union’s neighborhood. Today, having established strategic alliances with several of China’s neighbors, the United States is in a more favorable position than China, whose emergence as a rising power started from a “relatively weak” base. According to Kagan, Beijing faces considerable limits due to its geostrategic location, and it’s China’s turn to scramble, while the United States needs only to “stand still,” to “hold on to what it has” and secure its position. If the United States was able to succeed in the Cold War, the argument goes, conditions would appear to favor the U.S. now, as well.

There’s some merit in this, but also grounds for skepticism over the idea that the United States can afford to stand still in the face of China’s increasing competition and influence. Indeed, China’s scramble today in some ways bears a striking resemblance to the U.S. scramble half a century ago, suggesting a bumpy road ahead for any nation that Beijing deems to be standing in its way.

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The Diplomat is running a series of interviews with Washington D.C.-based ambassadors on defense, diplomacy and trade in the Asia-Pacific region. In the ninth interview in the series, Pacific Forum CSIS non-resident fellow Eddie Walsh talks with Danish Ambassador H.E. Peter Taksøe-Jensen, whose country currently holds the presidency of the Council of the European Union. Their conversation centers on the opportunities and challenges Europe faces as a result of the rise of Asia.

The last few years have seen enormous changes sweep the world. Of all trends, one of the most notable is the rise of Asia. From your perspective, should Europeans fear the increasing wealth and power of Asian countries?

From a Danish perspective, as we look at the enormous changes in the world, you can choose to be scared and nervous, or you can choose to see opportunities. There’s no doubt that we are seeing this as a great opportunity.

We have to remember that there is a bit of catching up still to do in the rest of the world. If you look at Asia twenty years ago, half the population was living in a situation of poverty. That has been decreased over the last couple of decades. The way that economic growth has been used as a tool in fighting poverty should be acknowledged.

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There are many reasons why Syria isn’t another Libya and so requires an alternative model of resolution, perhaps, similar to Yemen and Egypt where a political arrangement paved the way for leadership transition. This is precisely where the role of Syria’s main Asian allies is crucial to any kind of lasting progress.

Clearly, Syria is in the midst of a protracted humanitarian crisis. With thousands killed and ongoing deadly clashes between security forces and armed opposition – including a bombing attack Thursday in Damascus that killed dozens and shaved the facade off a military intelligence building – the international community  is still struggling to effectively implement a roadmap to peace.

Ongoing shelling of opposition strongholds, especially in Homs and Idlib, has further intensified calls for some kind of international intervention, sentiments given voice at the Friends of Syria Summit at the end of March in Istanbul. Yet it’s also clear that there’s little appetite, especially among many NATO countries, for intervention, whether in the form of establishing humanitarian buffer zones or the imposition of a no-fly-zone.

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The high-profile escape of Chinese dissident Chen Guangcheng last week from house arrest has sparked renewed speculation over the stability of China’s domestic political situation. The question now is whether despite the fact that Wang Lijun and then Chen deciding to seek U.S. assistance caused considerable embarrassment to the Chinese Communist Party’s much-vaunted unity, these incidents will have provided Beijing with the opportunity to publicly enforce its stand on factional struggles, thus paving the way for longer-term unity under a new leadership later this year.

It’s also not inconceivable that the Bo Xilai affair could increase expectations for the party to expedite political reforms. And while this may not always be perceived positively by individual party members, it has nonetheless made clear the need for change at a higher level. Still, all this may also heighten party tensions, particularly in the short-term, over how the leadership transition ought to take place.  

On the foreign policy front, Beijing has its hands full with a range of regional and global challenges. Closer to home, there are China’s ties with North Korea, which have come under increased scrutiny. The recent claims that China sold North Korea components for a military transporter aren’t likely to go down well with Beijing’s policymakers. And while the decision by Beijing to throw its lot in with the international community in rebuking Pyongyang over its latest missile test marked a rare break from its usual support for its neighbor, the fact that China-North Korean ties were reaffirmed in a high-profile meeting shortly after suggests that Beijing’s dealings with its neighbor are likely to be characterized by continuity rather than change.

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The Diplomat is running a series of interviews with Washington DC-based ambassadors on defense, diplomacy, and trade in the Asia-Pacific region. Last month, Washington Correspondent Eddie Walsh filed the first part of his interview with Ambassador Kim Beazley of Australia. Following is the second part of the discussion, on defense, diplomacy, and trade issues in the Asia-Pacific region from the Australian perspective.

ANZUS recently celebrated its 60th anniversary. To remain relevant, the terms of the treaty must be regularly updated to account for the changing security environment. For example, the Australian and U.S. governments announced earlier this year that a cyber attack on either nation would trigger the treaty. However, some say there are larger questions to be answered than just what new threats fall under the treaty. There are issues of strategic responsibilities and shared costs which can't be overlooked. So, from your perspective, what is the current state of ANZUS? What more needs to be done to modernize the treaty, and how is Australia responding to America’s call for its allies to contribute more to global security within the context of ANZUS?

Most people – Australians included – have a fixed view of the American-Australian alliance. ANZUS is just part of the relationship – a sort of boilerplate document that underpins it all. So, there's a sort of assumption that it was there in 1951 and it's the same now. It isn't. It changes constantly. It changes quantitatively in the characteristic of the relationship between the two countries and the things they do together. It also changes geo-politically as the area that Australia inhabits alters in terms of importance to the United States.

One of the reasons it took so long to get ANZUS in place from 1945-51 across successive Australian governments was because the South Pacific was no longer relevant to the United States once World War II was over. The focal points of the Cold War were already relevant by the end of the 1940s. The global political system of the Cold War had as its focal points Europe, North Asia, and to a degree the Middle East because of oil. Particularly after the Vietnam War, the Nixon Doctrine assumed not much importance to Southeast Asia and none at all to the South Pacific. So, the zones of fascination to Australia were barely important to the United States.

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