Reading regional commentary, one comes away with the view that US President Joe Biden’s decision to forgo attending this year’s ASEAN Summit amounts to diplomatic malpractice.
“Biden’s decision to brush off Jakarta is tantamount to Washington taking gardening leave on the US-ASEAN relationship,” one such piece reads.
“Mr Biden’s decision to ask his own vice-president to stand in for him at the ASEAN-US Summit and EAS, while a pity, isn’t cataclysmic. ASEAN will probably respond with a collective ‘knew it all along’ sigh,” goes another, referring to the East Asia Summit.
Instead of focusing on the optics, one should look at the substance.
As Greg Poling, senior fellow and director of the Southeast Asia Program at the Center for Strategic and International Studies, put it to me:
“Of course, we’d all like the president to attend every summit everywhere, but he can’t. The G20 in Delhi and the bilateral visit to Vietnam, which will deliver a comprehensive strategic partnership, are more important and impactful than the ASEAN Summit this year.
“Vice-President [Kamala] Harris is a perfectly acceptable surrogate for the president and consistent with the level of representation that China always sends (and higher than the level of representation usually sent by Russia).”
The US continues to deepen its regional engagement despite Biden not having Jakarta on his travel itinerary.
Upgrade to Comprehensive Strategic Partnership
During Biden’s visit to the region, Vietnam and the United States will upgrade their relationship to a Comprehensive Strategic Partnership, which significantly develops their bilateral ties, underscoring and increasing the importance of Vietnam’s role in the Indo-Pacific region.
Going to Hanoi matters.
The US-Vietnam bilateral upgrades their decade-old former framework for economic and geo-strategic reasons at a time when the macro-economic environment worsens, Hanoi finds itself without a free-trade agreement with the United States, the Chinese economy worsens and its government becomes more aggressive, while the US needs to deepen its regional relationships.
Economically, Vietnam has emerged as a critical player in the Indo-Pacific region. It has a rapidly growing economy integrating with its neighbors in the region, being one of the few members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the Regional Comprehensive Economic Partnership (RCEP), and the Indo-Pacific Economic Framework (IPEF).
As such, Vietnam’s importance as an important gateway for American companies to reach the Southeast Asia market and beyond will only increase.
While issues remain that need to be addressed, Biden’s visit provides an opportunity for high-level political and economic dialogue.
The US president’s visit underscores the extraordinary journey of reconciliation that has taken place between the two former adversaries. The Vietnam War/American War left deep physical and psychological wounds on both nations.
Biden and Nguyen Phu Trong, general secretary of the Communist Party of Vietnam, meeting to announce a new level of US-Vietnam partnership testifies to years of skillful diplomacy and the strategic exigencies of today for both sides.
IPEF takes first concrete steps
On Thursday, the US Commerce Department released the text of the Supply Chains Pillar (Pillar II) of IPEF.
An impressive 13 countries have joined since the US launched the IPEF, the core of the Biden administration’s regional trade and investment engagement strategy for the region, of which half are in Southeast Asia: Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.
Making IPEF concrete matters.
As a senior official from the US Commerce Department described it to me, the framework will deepen economic engagement for a critical region for the US by providing a new way to address discrete issues for competitiveness, as an individual country and as a grouping.
The supply-chain agreement emblematically represents what the US hopes to achieve through IPEF.
In this instance, the framework aims to establish a like-minded club of preferred suppliers to achieve supply chain resilience.
Among other items, the text calls for the establishment of a Supply Chain Council that would meet annually to assess supply-chain bottlenecks and diversification efforts; a Crisis Response Network for emergency communications channels; and a Labor Rights Advisory Board to identify labor-rights concerns across IPEF partner supply chains.
Businesses look for this group to first consult and act with a sense of urgency, especially on arrangements involving crisis response.
As Wendy Cutler, vice-president at the Asia Society Policy Institute and former acting deputy US Trade Representative, wrote to me, “These new IPEF supply-chain mechanisms, while welcome, will only succeed to the extent members and stakeholders are committed to putting the time and resources into making them work.”
Jackson Cox, chairman of the American Association of the Indo-Pacific and based in Bangkok, “applauds the finalization and publication of the Supply Chain Resilience text,” noting that “the IPEF Supply Chain Council and IPEF Crisis Response Network were created to address future vulnerabilities, including through cooperation, information sharing, and the development of action plans. “
Similarly, Russell Scoular, chairman of Australia’s Chatto Creek Advisory, notes, “Businesses expect the new Supply Chain Council to effectively engage strongly with them, identify key priorities and drive practical solutions.”
Only then will IPEF really matter.
Counterbalance to China
The Biden administration hit two significant objectives of its Indo-Pacific strategy this week, increasing bilateral engagement with Vietnam and establishing a club and rules for preferred trading partners, thereby counterbalancing China with the US.
This year’s actions build on 2022’s record of achievement, as pointed out by Robert Blake, McLarty Associates’ senior managing director and former US ambassador to Indonesia.
“President Biden had a highly successful and substantive visit to Jakarta last year for the G20 summit at which the US, Japan and other partners announced a $20 billion Just Energy Transition Partnership, and the president announced a second Millennium Challenge Corporation Compact of $698 million,” he told me.
The Comprehensive Strategic Partnership with Vietnam achieves the broader US vision in the Indo-Pacific region. Vietnam, like many other Southeast Asian nations, has concerns about China’s assertiveness in the South China Sea. By strengthening ties with Vietnam, the US bolsters a key regional partner to counterbalance China’s influence by providing them a framework in which they do not have to choose China over the US.
In IPEF, benefits flow through increased cooperation, and the negotiations have brought benefits already, raising awareness of how Covid measures had hurt the global economy and businesses, both big and small.
Although some supply-chain pressures have eased in recent months, dampening macro-economic conditions, inflation, interest-rate increases and the potential for shutdowns from pandemics and the climate crisis will continue to create volatility for businesses.
Still more is needed
While the Biden administration hit two significant objectives of its Indo-Pacific strategy this week, more needs to be done if the US wishes to counterbalance China ad give countries in the region a framework in which they do not have to choose.
As the Peterson Institute for International Economics found in a recent study, “Despite efforts by the Biden administration to strengthen ties with its IPEF partners and wean them away from Beijing, these countries are increasingly reliant on economic ties with China.”
As such, now that the IPEF’s supply-chain text has been released, the steps being taken to implement it and the upcoming negotiation round in Thailand are where the focus should be, not on Biden not being in Jakarta for a summit.
“The US commitment to ASEAN is strong,” concludes Blake. This week’s action shows it remains so.
While much more needs to be done, skipping the ASEAN Summit does not show otherwise.
