‘Indo-Pacific’ pitch gets lukewarm reception in SE Asia

Days after announcing a big new investment pitch for Southeast Asia, US Secretary of State Mike Pompeo began a five-day trip with visits to Malaysia, Singapore and Indonesia to ramp up regional support for America’s new “Indo-Pacific” strategy aimed at counterbalancing China.

The trip came amid mounting trade tensions between the US and China as both powers compete for regional influence. Most of Southeast Asia’s trade-reliant economies are skeptical of the Donald Trump administration’s trade policies, fearing a sustained trade war between the world’s two biggest economies will negatively impact on regional growth.

Though Southeast Asian nations are cool to Trump’s lurch towards protectionism, the alternative of China’s economic dominance also stirs unease. US officials say they do not intend to compete directly with Beijing’s initiatives, including the US$1 trillion Belt and Road Initiative, but Pompeo’s remarks clearly framed the strategy as a counter to China.

“Like so many of our Asian allies and friends, our country fought for its own independence from an empire that expected deference,” Pompeo told the US Chamber of Commerce during a policy speech last week in an apparent reference to China. “We thus have never and will never seek domination in the Indo-Pacific, and we will oppose any country that does.”

The use of the term “Indo-Pacific” is a nod to the re-emergence of the Quadrilateral (Quad) alliance among major maritime powers India, Japan, Australia and the US. Beijing regards the four-party Quad with suspicion and has previously characterized the alliance as pushing an anti-Chinese “encirclement” strategy.

The largest command of the US Armed Forces operating in the greater Pacific changed its name to the US Indo-Pacific Command earlier this year in line with the new US regional strategy. The shift was a reflection of the growing clout of India and changes in American strategic thinking that envision the Indian and Pacific oceans as a single strategic theater.

Despite the fact that Southeast Asian states may privately share US concerns over Beijing’s activities in the South China Sea and perceived-as-unfair trade practices, they will be reluctant to endorse America’s new strategy over fears of inflaming tensions with China, the Association of Southeast Asian Nations (Asean) grouping’s largest trading partner.

Singapore and other Asean members have cautioned the grouping against being coerced into taking sides between Washington and Beijing, particularly considering that Asean members are major recipients of BRI investments.

Asean states are also among the founding members of the Asian Infrastructure Investment Bank (AIIB), a China-led rival to the World Bank and Asian Development Bank, and parties to the China-backed Regional Comprehensive Economic Partnership (RCEP) trade deal. Both are regarded by some as parallel institutions of an emerging Chinese-led global order.

Confidence in America’s role in Asia has steadily waned under the Trump administration, especially following its withdrawal from the Trans-Pacific Partnership (TPP) trade pact and pursuit of “America First” policies that have undermined America’s previous commitment to free-trade multilateralism.

Pompeo’s trip represents an attempt to articulate a coherent strategic vision for a region that has collectively moved closer to Beijing. America’s top diplomat last week unveiled a US$113 million investment package for technology, energy and infrastructure initiatives, touted as a “down-payment on a new era of US economic commitment to the region.”

The amount pledged, however, pales in comparison to China’s mostly state-led economic initiatives. US policymakers have billed their Indo-Pacific strategy as a “transparent” and a “more sustainable alternative” aimed at encouraging private sector investment in the region’s energy and infrastructure, with the added aim of addressing trade imbalances.

Though more US investment will be welcomed by the region, the prospect of strained Sino-US ties and the ramifications in terms of both trade and security are of far greater concern to regional countries, which form an integral part of Chinese exporters’ supply chains and stand to lose billions from a US-China trade war.

Pompeo no doubt tried to address and assuage these concerns directly with Asean leaders during his tour.

He was the first senior US official to visit Malaysia since the May 9 elections returned Prime Minister Mahathir Mohamad to office. America’s top diplomat was photographed shaking hands with Malaysia’s nonagenarian premier, but neither figure offered any public remarks on their meeting.

Pompeo continued to Singapore for an Asean ministerial meeting, where he met with Singapore’s Prime Minister Lee Hsien Loong, who welcomed the US’ continued regional engagement.

Pompeo also met with Indonesian President Joko Widodo and Foreign Minister Retno Marsudi during a visit to Jakarta, where officials called on him to maintain the country’s preferential trade status under the Generalized System of Preferences (GSP) facility. In July, the two sides agreed to double their annual trade from around US$26 billion last year to US$50 billion in future.

While American strategists regard the Indo-Pacific as the most consequential region of the globe, the regional initiative put forth by the Trump administration also appears to be greatly scaled down from the Obama-era “pivot to Asia” strategy, which included the TPP trade deal as an economic pillar that was generally favored by regional governments.

Eleven countries signed a revised Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) earlier this year, excluding the US after it voluntarily withdrew. While the economic scope of the Trump administration’s Indo-Pacific Strategy is more modest than earlier US initiatives, the security component is robust.

Pompeo pledged a further US$300 million in new security funding for Southeast Asia on the sidelines of the Asean foreign ministers’ meeting on August 4, which he said would “reinforce security cooperation” in the region. The Straits Times newspaper reported that the US strategy was met with a “lukewarm reception” from Asean members.

China’s Foreign Minister Wang Yi responded by defending his country’s actions in the South China Sea, blaming “non-regional countries, mainly the United States” for pushing militarization by “sending massive strategic weaponry” into the region. He called Beijing’s moves “defensive acts” that have been wrongly labelled as “acts of militarization.”

“Sustained interest in matters of security by the US is generally welcomed in the region,” says Ooi Kee Beng, executive director of the Penang Institute, a think tank. “It is both the form it takes and the rhetoric that buoys it which are the issues. Where the Trump administration is concerned, trust in a sustained US policy is low.”

The region has been working toward the integration of trade practices for decades and a trade war is not something Asean or China welcome or want to be a part of, says Ooi, who described Washington’s new Indo-Pacific strategy as “being too obviously a play to the US political gallery.”

Countries such as Singapore – a long-time advocate of a robust American presence in the region that has more recently publically cast doubt on Washington’s staying power – have said that US regional commitments must go beyond security-oriented strategies in order to strike a balance and meaningfully sustain partnerships and alliances.

Given the tensions between Beijing and Washington across multiple areas, Asean countries have emphasized balance and diplomacy, voicing more explicitly their desire to avoid security and trade entanglements between superpowers and a resumption of old Cold War-era divisions and rivalries.

“For most Asean governments, US interests will have to be balanced with Chinese interests in the region,” says Chandra Muzaffar, a Malaysian political scientist. “They wouldn’t want to be seen as tilting too much to one side or the other.”

“Nonetheless, Asean as a whole is aware that in the ultimate analysis geography counts. China will always be Asean’s neighbor,” he says. “The sooner the US realizes the significance of this to Asean’s economic and political relations with actors outside the region, the better it would be for everyone.”