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AUKUS Is Only Half the Equation

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Trans-Pacific View | Economy | East Asia

AUKUS Is Only Half the Equation

The United States and Britain should prioritize economic ties in their emerging Asia alliance.

AUKUS Is Only Half the Equation
Credit: Official White House Photo by Adam Schultz

The United States and the United Kingdom’s recent decision to expand their Asian security presence has the potential to deter China, but Washington and London should recognize its limits. The U.S. and U.K. governments need to build stronger trade and investment ties to create a sustainable and long-lasting diplomatic presence across Asia.

As China pursues an increasingly assertive foreign policy, Anglo-American strategic cooperation with regional partners like Australia could help check Chinese ambitions in the region. In September, the Biden administration and the Boris Johnson government announced a new Indo-Pacific defense alliance between Australia, the U.K., and the U.S. – AUKUS for short. While the alliance will initially help Australia build a nuclear-powered submarine, it ultimately seeks to deepen trilateral security cooperation in Asia. Although the decision was seen as a snub by France, it was a welcome distraction for the Biden administration following its botched withdrawal from Afghanistan. The move was also a diplomatic win for Downing Street as it seeks to expand Britain’s diplomatic presence beyond Europe.

However, the United States and Britain should not overemphasize security arrangements in the emerging pivot to Asia. Both countries could take a lesson from Beijing’s playbook. After the U.S., Britain, and Australia announced the AUKUS deal, the Chinese government did not make any security overtures. Instead, Beijing announced its bid to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)– the successor to the Trans-Pacific Partnership that the United States helped negotiate but from which it ultimately withdrew. It is unclear whether China’s application will be successful – especially considering Taiwan’s application to join the CPTPP – but it nevertheless sends a powerful message to Asian countries. Unlike the U.S. and Britain, China seeks to project itself as an economic power instead of a military power.

Indeed, there are good reasons for the United States and Britain to prioritize economic ties over a military build-up in Asia. Many Indo-Pacific nations – apart from Japan, Taiwan, Vietnam, and India – view their relationship with China primarily in economic rather than security terms. Even countries like India, where leaders are increasingly skeptical of China’s strategic objectives, do not want their country to become pawns in increasingly hostile Sino-American relations.

That is especially the case for high-growth emerging Asian economies like Bangladesh, Indonesia, and the Philippines. These countries still face significant economic development challenges, so their governments often prioritize commercial ties over security alliances. Many are especially concerned that worsening Sino-American relations and growing militarization in the region could hamper national economic development efforts. Following the AUKUS agreement, Malaysia and Indonesia expressed concerns about a growing Asian arms race and its potential impact on regional stability. Anglo-American diplomacy that prioritizes commercial rather than security issues will better appeal to leaders in these economically orientated Asian nations.

Both Britain and the United States can design foreign policies better suited to Asian nations’ economic priorities. Earlier this year, Britain became the first country to pursue negotiations to join the CPTPP. Joining such multilateral agreements and strengthening existing bilateral trade arrangements can be an effective way to signal Washington and Westminster’s commitment to strengthening Asian economic ties.

The U.K. and U.S. should also pay special attention to trade in digital services and cross-border data flows, which could well grow faster than trade in goods. As China has made significant headways in developing the digital infrastructure across South and Southeast Asia, the U.S. and the U.K. have fallen behind. However, America and Britain can work with Australia, Japan, and the Association of Southeast Asian Nations (ASEAN) countries to sign agreements to liberalize cross-border data flows and digital trade.

An increased economic emphasis does not necessarily mean that the United States and Britain should neglect a military presence, but they should take steps to improve Asian perceptions of trans-Atlantic security cooperation. For policymakers in many Asian countries, it is easy to view AUKUS as a Western maritime coalition seeking to prevent the rise of an emerging Asian nation. Likewise, some argue that India could provide a counterweight to China, but relying too much on India risks alienating its neighbors, incentivizing them to pursue closer ties with China.

Building ties and strategic cooperation with Asian nations – instead of military competition with China – should be the focus of the emerging Anglo-American pivot to Asia. To that end, the U.S. and U.K. should seek a broader coalition that includes both major and minor regional powers. Britain is especially well-suited for such an approach, since its technical expertise and military knowhow far surpass its hard security assets in the region. By enabling regional players and cooperating with a diverse array of Asian countries, Britain can play an outsized role in the region.