Southeast Asia’s Key to Security and Trade in a Post-TPP World
Within three days of taking office, President Trump signed the executive order removing the United States from the Trans-Pacific Partnership (TPP). The TPP was dead after nearly a decade of negotiation. Left in its wake was a political power vacuum. With President Trump’s strong, protectionist rhetoric, it is unlikely that the United States will pursue another broad, multilateral free trade agreement in the TPP’s stead.
China has been waiting for this moment. Given Beijing’s recent foreign direct investment spending sprees in Europe, Africa, and Asia, China has the opportunity to fill the TPP void with a Sino-centric agreement. There will be certain opportunities and pitfalls when China proposes a new trade treaty for the region.
China’s One Belt, One Road Initiative (OBOR) has shown the earnestness and expansiveness of Beijing’s plans throughout the Eurasian continent. Announced in 2013, the OBOR is China’s main method of economic development strategy. Economists have estimated OBOR to cost roughly $4 trillion upon completion, with over $1 trillion coming directly from the Chinese government. The String of Pearls is Beijing’s other major foreign policy framework operating in South Asia. Since the early 2000s, the String of Pearls has focused more on military reach and energy security from the South China Sea, around the Straits of Malacca, and into the Indian Ocean Region. Both in tandem have caused issues in Southeast Asia with great concern raised around China’s island building. However, if the United States cannot offer substantial economic partnership to counteract Chinese influence, Southeast Asian states may be forced to accept closer ties with China. Given China’s size and reputation, Beijing would likely dominate any economic negotiations amongst Southeast Asian neighbors.
The Association of Southeast Asian Nations Free Trade Area (ASEAN FTA) already covers several participants in the TPP. In 2010, the ASEAN FTA expanded to include China, although some members felt too many concessions were surrendered to Beijing. The TPP hoped to counteract the pro-China balance of trade in the Pacific Rim and was widely seen as beneficial to the included ASEAN members. China’s rich history teaches that the Middle Kingdom often achieves its goals through diplomacy instead of aggression. With the opportunity to charm nations looking for another trade group, China can employ their historically successful tactic.
China jumped on the opportunity to promote a rival agreement to the TPP after the election of President Trump. Beijing is aware that the vacuum left in the wake of TPP’s collapse is ripe for a Chinese-based solution. With China’s growing economy, the Middle Kingdom is constantly looking for more resources and goods to consume. Many members of the TPP were excited for the opportunity to import foreign goods more efficiently, but the main benefit resided in the United States due to its strong, consumer-based economy. The free trade agreement opened the world’s biggest market for many of these countries to engage with easily. China has the second largest economy in the world. This is a valuable opportunity for many TPP members searching for the next option.
The Southeast Asian members of the TPP hold considerably negative views of China. The ASEAN FTA has many well-known issues given its kowtowing to China. It would be folly to not re-engage Southeast Asia with another free trade agreement. Multilateral diplomacy is not easy and President Trump has emphasized his preference for bilateralism. That is not an issue. In fact, it may be easier to approve bilateral trade agreements with individual TPP countries or countries that showed interest in joining the trade partnership. Additionally, bilateral agreements may play into other U.S. interests as well. In the Philippines, the United States is unsure about the future of its military bases around the country. A bilateral trade agreement could address this as well as trade. In Vietnam, arms trade has been a growing area of interest. A bilateral free trade agreement with Hanoi could address this, as well as Vietnamese consumer goods broadly. Every other nation has individual interests that intersect with diplomatically achievable objectives.
To prevent China’s influential growth in the region, many of these bilateral deals could address issues with China and opportunities for the United States to block China’s interests in the individual nations. For example, Vietnam and the Philippines are concerned about continued Chinese military aggression and expansionism in the South China Sea. The bilateral free trade agreements could include emphasis on increased military cooperation with the United States to push back against the String of Pearls and OBOR strategies of slow subversion.
President Trump was adamantly against the TPP. It was not perfect. Revision was worthwhile; destruction was not. Moving forward, the administration should look to engage with each country bilaterally to address individual needs. While this would not be as secure against Chinese influence as a multilateral agreement, it shows promise. If the Trump administration is genuine about working with and preventing China from eroding U.S. influence in Southeast Asia, bilateral trade agreements must become a priority.