The United States and the East Asian Community

Amitav Acharya


Introduction

The idea of an East Asian Community is a major development in Asia’s regional architecture. Until 1997, regional institutions in Asia were organized either on a sub-regional (the Association of Southeast Asian Nations, South Asian Association for Regional Cooperation, Shanghai Cooperation Organization) or transpacific (Asia Pacific Economic Cooperation, ASEAN Regional Forum) basis. ASEAN was established in 1967 with only five Southeast Asian countries: Thailand, Indonesia, Malaysia, Philippines, and Singapore. This was not only because of Cold War divisions within Southeast Asia, but also because these Southeast Asian nations distrusted the leadership role of the larger Asian powers, China and India. As the Cold War ended, the region saw the emergence of Asia-Pacific regional institutions, the first being APEC in 1989, followed by the ARF in 1994. The emergence of the former reflected growing trans-pacific economic interdependence, while the ARF responded to the end of the Cold War and the impact of norms of cooperative security promoted by Canada and Australia. But these institutions, as well as ASEAN itself, were undermined by the 1997 crisis for their failure to deal with its economic and political repercussions. Since then, regionalism on an East Asian basis has come to the fore.

The first to emerge was the ASEAN Plus Three (APT) grouping in 1997, comprising the ASEAN member, China, Japan and South Korea. The latest and perhaps the grandest addition to the growing alphabet soup of regional institutions in Asia is the East Asia Summit (EAS), an annual gathering of the leaders of the ten ASEAN members, plus, China, Japan, South Korea, India, Australia and New Zealand, which held its inaugural session in December 2005. The ultimate goal of the proponents of East Asian regionalism is the creation of an East Asian Community (EAC), a “bona fide regional community…for peace, prosperity and progress”, as the report of the East Asian Vision Group (EAVG), puts it.

Why has multilateralism occurred in an East Asian framework? One reason had to do with the role of the United States. A 1990 proposal from the then Malaysian Prime Minister, Mahathir Mohammad to create an East Asian Economic Grouping (later renamed as East Asian Economic Caucus) failed because Japan and other East Asian nations refused to endorse it under pressure from Washington. But the idea refused to die away. The 1997 financial crisis helped to revive it in two ways, first by exposing the limitations of APEC and ASEAN, and second by generating resentment towards the US, even among its allies such as Thailand and Japan. The very different responses from Washington to the Baht collapse and the Peso crisis in Mexico fuelled perceptions of America apathy towards the region. Washington’s response to the Peso crisis was prompt and generous, while in the case of Thailand it simply let the IMF take the lead and provided little direct financial aid. This, coupled with abrupt and total manner in which Washington rejected Japan’s proposal for an Asian Monetary Fund, alienated regional opinion-makers.

The crisis spurred the ASEAN-Plus-Three (APT). The APT focused on regional financial cooperation, which had not been undertaken within APEC. At the behest of South Korean leader Kim Dae Jung, APT leaders set up an East Asia Vision Group (EAVG) to consider pathways towards regional cooperation. Its report endorsed the idea of an East Asian Summit, which held its inaugural session in Kuala Lumpur in 2005.

A parallel impetus for the East Asian Community is accelerating East Asian regional economic interdependence. Intra-regional trade in East Asia in 2003 accounted for 54% of the region’s total trade, compared to 35% in 1980. This trade volume is higher than that in the NAFTA region (46%), and “very much comparable to intra-regional trade in the European Union before the 1992 Maastricht treaty.” Although East Asian nations with the notable exception of China rely on investment from outside East Asia, the share of intra-regional foreign direct investment jumped from 24% in the latter half of the 1980s, to 40% in 1995-97.

On the top of economic linkages, the East Asian Community idea has been strengthened by a string of regional crises since the financial meltdown in 1997. The terrorist attacks on Bali and elsewhere in the region since October 2002, the outbreak of the Severe Acute Respiratory Syndrome (SARS) in 2003 and the Indian Ocean Tsunami in 2004 have fostered a sense of shared vulnerability of the region to complex transnational disasters, which come with little warning and respect no national boundaries.

What are the implications of the emergence of East Asian regionalism for the US? Some see the EAC as a wedge between the US and East Asia, or as an instrument for Chinese strategic gain at the expense of the US. Thus, Fred Bergsten worries that the EAS might cause a “fundamental split between East Asia and the U.S.” Richard Armitage, Deputy Secretary of State under the first George W. Bush administration, describes East Asian regionalism as “thinly-veiled way to make the point that the US is not totally welcomed in Asia…What worries me about the EAC idea is that it is the beginning of an erosion of the US military alliances in the region. It seems that China is quite willing to be involved in fora that does not include the US.” Such misgivings have led to calls for the US to subvert the East Asian institution-building process. Dana Dillon of the Heritage Foundation believes that “[w]ith artful management of the process by engaged American diplomats, the U.S. can …neutralize EAS into another Asian talk-shop, like the ASEAN Regional Forum.”

But a hostile or manipulative US attitude towards the EAC could backfire. To be sure, there are a number of reasons to be skeptical of the East Asian Community idea, such as a lack of agreement over geographic scope, ASEAN’s weak leadership of the community-building process, and persisting Sino-Japanese rivalry. Yet, there are enough reasons for the idea to remain alive despite these obstacles. The EAC offers a regional framework for engaging China, for facilitating cooperation against regional challenges such as financial crises or pandemics, and most importantly, as an insurance against US policies that are seen as unsympathetic or hostile towards the interests of the regional actors. Hence, America’s time and energy is better served by responding to the East Asian Community idea not by subverting it, but by strengthening its own engagement with regional institutions in which it enjoys membership, such as APEC and ARF and by turning the six-party talks into a sub-regional institution. This could send a powerful signal about its commitment to regional cooperation that would counter any move to turn East Asian regionalism into an exclusionary grouping undercutting US interests in the region.

The Pitfalls and Promises of an East Asian Community

Which East Asia?

Proponents of the East Asian Community idea argue that East Asia is economically more integrated and politically and culturally more coherent than unwieldy Asia-Pacific institutions like ARF and APEC that include the US, Canada and Australia. Yet, the inaugural Kuala Lumpur summit defined East Asia in “political rather than geographical terms”. The broadening of the summit to include India, Australia and New Zealand, at the behest of Japan and Singapore, and justified as a way of underscoring “open” and “inclusive” nature of the grouping, has become a source of considerable controversy. Japan and Singapore supported the broadening of the summit, while Beijing saw it as a Japanese ploy to weaken Chinese influence in East Asia. While Japan and India want the more broad-based summit to be the basis for the development of the East Asia Community, Beijing would prefer to develop such a community through the APT process, which excludes Australia, New Zealand and India.

ASEAN: Leading by Default?

ASEAN has been designated as the “driving force” of the East Asian Community. The APT and EAS are hosted and chaired by an ASEAN member state and held back to back with the annual ASEAN summit. There are several reasons for ASEAN’s leadership role. As Singapore’s Senior Minister Goh Chok Tong states, “ASEAN does not threaten anybody and the big countries in the region will want ASEAN to play that facilitating role.” Moreover, in the words of the former Malaysian Deputy Prime Minister Anwar Ibrahim, “[t]he balance provided by ASEAN in engaging China, Japan and India, is…pivotal in insuring understanding and security in the region.”

But ASEAN is leading the regional community-building process mainly by default, because neither of the region’s two major powers, China and Japan, is in a political position to do so. “Cooperation in East Asia”, argues Japanese scholar Takashi Shiraisi, “cannot work if the prime mover is either or the two countries.” ASEAN’s capacity for leading the EAC is limited by several factors. As a regional organization, ASEAN has been weakened by intra-mural political bickering, such as disputes between Singapore and Malaysia, inability to find a political solution in Myanmar, and domestic political instability in member states such as Thailand, Philippines and Indonesia. Since the downfall of Suharto, ASEAN has lacked an effective leader. The absence of a strong leadership within ASEAN undercuts its ability to lead institutions involving outside powers, including the EAC and the ARF.

Sino-Japanese Distrust

This leads to what is perhaps the most serious challenge to East Asian Community idea: mistrust between China and Japan. Sino-Japanese tensions in the past several years reverse decades of reconciliation which might otherwise have served as the basis for a genuine East Asian Community. In the past, China and Japan complemented each other as benefactors to the region. In the 1980s and 90s, outward Japanese investment contributed to common prosperity in East Asia. In the 1997 crisis, aid offered by Japan was an important factor behind Malaysia's ability to withstand the crisis, while China's pledge not to devalue its currency helped to stave off any further aggravation of the crisis. The SARS crisis moved China closer to the region after Beijing made up for its earlier secrecy over the outbreak by cooperating closely with neighbours in containing the pandemic. And Japan was the largest provider of humanitarian economic aid in response to the Indian Ocean tsunami.

But the political and strategic roles of China and Japan in East Asia have become increasingly competitive. Japan was alarmed by Chinese nuclear tests and military expansion in the 1980s and 1990s. Responding, it strengthened its alliance with the US, which in turn fuelled Chinese perceptions of renewed Japanese militarism. Japan's prolonged economic stagnation at a time of China's meteoric rise fuelled Japanese insecurity. North Korea's missile tests and nuclear programme aggravated Japan’s insecurity and moved Tokyo closer to Washington's strategic agenda.

The Bush administration's war on terror offered an opportune framework for Japan to carry out political and constitutional changes which in reality have their basis in its concerns about the rise of China. These changes, which permit an expansive role for Japan's military are interpreted by neo-nationalist elements in China as a further sign of Japanese militarism. These forces have also exploited anti-Japanese sentiments over the visits to the Yasukuni Shrine by the former Prime Minister Koizumi and the publication of Japanese textbooks that glossed over Japanese war-time atrocities in East Asia. Anti-Japanese demonstrations in China, sometimes tolerated by the authorities in Beijing, produced a nationalist backlash in Japan. As a result, Sino-Japanese competition and mistrust creates a kind of unstable core at the heart of the EAC concept. It remains to be seen whether there would be any genuine improvement under the Abe government.

Despite these obstacles, the East Asian nations, especially ASEAN members, are unlikely to abandon their quest for an East Asian Community. This is because of four advantages of the East Asian framework.

Why East Asian Regionalism Will Not Fade Away

First, for ASEAN, East Asian regionalism provides them with an important additional layer of engagement with the region’s preeminent rising power, China. ASEAN is opposed to a containment approach that some sections in the US policy-making community advocate out of concern that it might provoke a nationalistic and hostile response from Beijing. At the same time, through the EAC, ASEAN seeks to create the possibility of binding China into a regional structure that would induce Beijing’s restraint towards its weaker neighbours in exchange for the latter’s respect for its economic and security interests and leadership. East Asian regionalism may be a better mechanism for binding China this way than either the ARF or APEC, where the presence of the US makes China nervous about making concessions which it fears may be perceived by Washington as a sign of weakness. Indeed, China has in the past seen US policies of engagement through the ARF as a form of “soft containment”.

Second, East Asian regionalism serves as a more appropriate platform for undertaking certain functional tasks or addressing common dangers that other regional groupings are less suited or inclined to perform. Financial cooperation is one of them, and has been already undertaken by the APT. East Asian regionalism has also proven useful in addressing certain types of non-traditional security threats, such as pandemics. The regional response to SARS crisis was undertaken through an East Asian framework and this may prove useful again should there be a massive outbreak of the bird flu. The focus on energy security at the 2nd EAS in Cebu is also noteworthy given the membership in the EAS of both India (not an APEC member) and China, two of the biggest consumers of energy resources.

Third, East Asian regionalism, especially through its Summit, provides a forum for ASEAN to influence the regional balance of power for its own benefit. By including Asia’s two other rising powers: India and Japan, ASEAN ensures not only that the EAC will not be dominated by China. Lee Kuan Yew put it, in an interview with Time Asia published in December 2005, explained the admission of India, Australia and New Zealand into the East Asian summit as a matter of balancing. “India would be a useful balance to China's heft,” while bringing Australia and New Zealand into the Summit would erase any concern that it was a forum of “Asians versus whites” or an anti-American grouping. “It's a neater balance,” he said. (emphasis added)

Finally, the simultaneous engagement of China, Japan and India through the EAS also allows ASEAN a secure a margin of freedom for its own actions and to secure material benefits from each of them. Confronted with the new power structure, ASEAN hopes to be able to secure from the larger Asian powers the benefits of both geopolitical restraint and economic assistance. The region has already seen a degree of competitive bidding by Japan and China for ASEAN’s affection, especially evident in their efforts to develop free trade arrangements with ASEAN and to sign ASEAN’s Treaty of Amity and Cooperation in Southeast Asia. At the same time, East Asian regionalism offers its participants a potential source of leverage against unsympathetic or arrogant US policies. The very existence of East Asian institutions should require the US to weigh the diplomatic and political costs of such policies in a future regional crisis, for example the kind of response that sparked resentment against the US in the wake of the 1997 financial meltdown.

The US: Victim or Spoiler?

This leads to the question of the US attitude towards the East Asian Community idea. The Bush administration viewed the first East Asian Summit with feigned disinterest. Eric John, Deputy Assistant Secretary of State for East Asia and the Pacific, told a US congressional hearing: “Nobody knows what the East Asia summit is other than leaders coming together.” John described the Summit as too much of a “black box” for Washington to even realize what it is missing out on. “I would hesitate to push for an invitation to an organization we don’t know what it does.”

In reality, Washington has had a history of anxiety about East Asian regionalism. In his memoirs, US Secretary of State James Baker confesses to having done his best to “kill” Mahathir’s 1990 EAEG/C proposal for , “even though in public [he] took a moderate line.” The US sent a demarche to the ASEAN Secretary General in 1993 warning that it would be “concerned about anything that raises questions about United States Commitment to the region and exclusion from the region”. In a September 2005 speech, former Deputy Secretary of State Robert Zoellick argued that American and regional concerns about China “will grow if China seeks to maneuver toward a predominance of power [in East Asia],” he urged ASEAN, Japan, Australia, and others to work with the US “for regional security and prosperity through the ASEAN Regional Forum and the Asia Pacific Economic Cooperation forum.”

Perhaps unwittingly, Zoellick identified an interesting policy choice for the US. If Washington is truly worried about the EAC becoming an instrument of Chinese dominance, shouldn’t it be preempting its emergence by lending greater support and resources to the region’s wider and inclusive regional institutions, such as APEC and ARF, just as Goh and Zoellick urges?

This is all the more because the US cannot realistically expect an invitation to join the East Asian Community. After the inclusion of India, Australia and New Zealand in the EAS, there was some speculation that the US could be next. But even friends of Washington do not this is either necessary or desirable. Hitoshi Tanaka, a former Japanese Deputy Foreign Minister, contend that the US is not “committed to the East Asia community building” and hence should not be regarded as “a member of the East Asian Community.” Singapore’s former prime minister, Goh Chok Tong, argues that “East Asia cannot be extending to countries in the Pacific, for then even the political definitions would get stretched beyond belief.” In Goh’s view, the region’s “engagement with the US could be through the APEC and the ARF.”

Instead, there is a good case to be made the EAC presents the US with a rationale to engage more actively in regional institutions where it is a member. Until now, US policy towards these institutions has been a study of contrasts: relative indifference towards the ARF, the region’s only security forum, and overt attempts at domination of APEC, at least initially. Thus, it opposed Canadian and Australian proposals (also in 1990) for developing a multilateral security forum in Asia akin to the Organization for Security and Cooperation in Europe (OSCE) as a “solution in search of a problem” (in the words of the then Assistant Secretary of State for East Asia and Pacific Affairs Richard Solomon), fearing that it will undercut the rationale for America’s bilateral alliances in the region. While the Clinton administration later softened its stance on multilateral security and backed the ARF - an offshoot of the Australian and Canadian proposals. But the US has viewed the ARF at best an adjunct to its bilateral alliances in the region. It did not send its Secretary of State to the 2005 ARF meeting in Laos. The tendency to see bilateralism and multilateralism in zero-sum terms has meant that Washington has never seriously engaged the ARF in developing its confidence-building agenda.
By contrast, the US under the Bush Sr. and Clinton administrations tried to steer APEC exclusively in the direction of trade liberalization, ignoring its other two missions: trade facilitation and development cooperation. Its insistence on institutionalizing APEC “as a formal body applying strict rules” not only clashed with ASEAN’s preference for informal and non-legalistic approach to multilateralism, along with the selective focus on trade liberalization also made Asian governments “dubious about allowing themselves to be seriously constrained by an organization whose agenda was so overweeningly dominated by the United States.”

This in turn fuelled the move towards an East Asian regional forum culminating in the APT. And Asian resistance to its trade liberalization agenda led Washington to gradually lose interest in APEC. Although successive American presidents have attended the annual APEC summit, APEC’s focus has shifted towards security issues (East Timor in 1999, terrorism in 2001). But even then, the US counter-terrorism cooperation with East Asia has been undertaken primarily on a bilateral basis, with the exception of a joint declaration with ASEAN on counter-terrorism measures such as intelligence sharing and training.

Ultimately, the challenge for the US lies in finding a balance between disinterest on the one hand and dominance on the other. Washington’s approach to Asian multilateralism needs to be serious but not heavy-handed. The affirmation that the EAS would remain “an open, transparent and outward-looking forum” might have assuaged some of Washington’s fear about the Chinese dominance of the EAS. But support for it might grow if Washington’s policy towards the region seem overbearing or unilateralist, or showing aggressive opposition to the EAC idea.

Instead, the US should work towards making existing regional institutions, ASEAN, ARF and APEC, more relevant and effective. US policy-makers should discard the zero-sum view of the relationship between US bilateral alliances and its participation in multilateral institutions is unwarranted. Multilateralism helps Washington to better manage the development of Asia’s future security architecture. For the region’s rising powers, especially China and India, multilateral forums provide a valuable platform to demonstrate their credentials as responsible and constructive members of the international community. For the region’s weaker states, such as the ASEAN members, they provide an invaluable platform of engaging the major powers and moderating their competitive instincts. Indeed, contrary to Washington’s fears, multilateralism may be the best way for the region’s weaker powers to engage both China without courting its dominance. And support for multilateral institutions is a good way for Washington to reassure its Asian friends who have been recently concerned about its arrogance and unilateralism.

The US can play a more active role in Asian multilateral institutions in three ways. The first is to support their greater institutionalization and legalization, which should make them more responsive to the transnational threats that the region faces. Two general features of ASEAN and Asian-style multilateralism need to be reformed: their minimalist approach to institutionalization and legalization, and closely related, their deep attachment to Westphalian sovereignty, especially the principle of non-interference.

This reform process begins with ASEAN. While the US is not formally a member of ASEAN, it is a dialogue partner. ASEAN is the hub of both Asia-Pacific and East Asian regional institutions. The reform of other regional institutions that have the US as a member would not be easy unless ASEAN itself changes its ways. ASEAN is drafting a Charter which would specify the rights and responsibilities of the grouping’s members, consolidating and rationalizing its institutional mechanisms, and giving the organization a legal personality in dealing with the outside world. If realized, the Charter will mark a departure from the “ASEAN Way’ of informalism, which has been blamed for organizational inertia and a lowest-common denominator mindset.

But to be a credible voice in the call for reform of the ASEAN Way, the US would need to sign ASEAN’s Treaty of Amity and Cooperation, as ASEAN’s other dialogue partners, China, Japan, India Australia and France, have done. There has been resistance to this move, since the TAC upholds the principle of non-interference rather strictly. But ASEAN is already rethinking this doctrine, especially in relation to Burma. It has publicly expressed unhappiness over the slow pace of political reform in the country. The shift is not very pronounced yet, because several ASEAN members remain wary that criticizing a member regime for its domestic political practices might backfire on them one day. But at least the Burma issue is no longer being swept under the carpet. By signing the TAC, the US would signal its commitment to ASEAN, and become a more credible partner in ASEAN’s reformist agenda.

Second, while supporting ASEAN’s efforts at institutional reform, the US should seek to rejuvenate APEC and the ARF. Malaysia’s Prime Minister Badawi assures that the EAS would not become “confrontational with Apec or other organizations.” In APEC, the US should look beyond trade liberalization and use it as a vehicle for trade facilitation and as a vehicle for mobilizing regional consensus and support for the WTO Doha round talks. The ARF has stalled in recent years, partly because of the lack of interest shown by US policy-makers, as represented by Secretary of State Condolezza Rice’s absence from the 2005 ARF meeting in Laos. The ARF has also made limited progress in its confidence-building agenda, which is restricted to a small number of steps, such as publication of defence white papers, and meetings of national defense college heads. Much more can be done. One important challenge is to develop mechanisms for preventive diplomacy, including provision of early warning, fact-finding and good offices missions to deal with regional crises. The US could also make greater use of the forum in developing cooperation in areas such as maritime security and counter-terrorism.

Third, the US should seek to build a multilateral institution for Northeast Asia based on the Six-Party talks on the Korean peninsula , aimed at getting North Korea to abandon its nuclear weapon program in exchange for multilateral assistance. But until recently, the prospects for this occurring looked slim, especially when the Bush administration in 2006 imposed new sanctions on North Korea, including a ban on US banks from dealing with the Bank of Macau, a major banking partner of North Korea. The US move widened the gulf between Washington and Seoul, which continued to pursue its engagement policy towards Pyongyang. The Chinese, professing a limited clout over North Korea’s decision-making, rejected US sanctions against the regime. The evolving China-Russia strategic relationship, counter-balancing closer Japan-US ties, seemed to be overtaking the momentum toward a multilateral approach to Northeast Asian security. But the accord on North Korea at the six party talks on 13 February 2007 testifies to the usefulness of mutlilateralism for the US. As White House spokesman Tony Snow put it, “there is considerable leverage on the North Koreans by virtue of the fact that...the Chinese, the South Koreans, the Japanese and the Russians are involved here. [the North Koreans] are answerable not merely to the United States, but in fact to their own neighbors who are significant stakeholders in this.”

Conclusion

The emergence of the East Asian Community idea, supported by institutions such as the ASEAN Plus Three and the East Asian Summit, is in large part a response to the growing regional economic interdependence. It was also catalyzed by the 1997 Asian economic crisis in which the US response was seen as indifferent, if not hostile, in organizing the rescue of the Asian countries most affected by the crisis. Since then, the EAC idea has evolved considerably. Although it is beset by problems about its membership, leadership and intra-regional mistrust, the idea is unlikely to fade away, in the same manner as Mahathir Mohammed’s proposal for an East Asian institution remained alive despite Washington’s bitter opposition. East Asian nations, especially the ASEAN members, see East Asian regionalism not only as a way of co-opting with China, but also as an instrument of leverage against the US should it be indifferent or hostile to the interests of East Asian nations especially in a future regional crisis.

The United States has some misgivings about the East Asian Community idea because of the potential for China to play an active, if not dominant role in the grouping. These misgivings remain despite the inclusion of its allies, Australia in particular, in the East Asian Summit. But any US effort to subvert the grouping could backfire. A more prudent policy would be for the US to revitalize its engagement with Asia-Pacific institutions, such as the ARF and APEC and to support the development of a Northeast Asian subregional grouping. While America’s bilateral alliances remain important to its strategic interests in the region, greater resort to multilateral institutions would contribute to improved prospects for regional conflict management and integration. It would also ensure that the proposed East Asian Community would not turn into an anti-American bandwagon.