U.S. President Barack Obama will host the leaders of the ten countries that make up the Association of Southeast Asian Nations (ASEAN) in an unprecedented U.S.-ASEAN summit meeting on February 15 and 16 at Sunnylands in California. Since 2013, shorter meetings have taken place annually in Southeast Asia on the sidelines of broader East Asia summits. Obama took the unusual step of inviting all of the ASEAN leaders for this two-day gathering in the United States at the 2015 ASEAN summit meeting in Malaysia, during which they agreed to elevate their relationship to an “ASEAN-U.S. Strategic Partnership.”
While some experts might be skeptical that this kind of photo-op get-together and lofty diplomatic language can produce meaningful outcomes, in this case the ever-present symbolism obscures an underlying fact that the U.S. rebalance to Asia strategy is yielding stronger U.S. economic and security ties in the region. Moreover, burgeoning U.S.-ASEAN relations are moving in concert with key U.S. ally Japan stepping up its own outreach to the region in ways that complement American diplomacy. This is in contrast to decades earlier when U.S. and Japanese interaction in Southeast Asia was marked as much by competition as it was by cooperation. If not revolutionary, this is at least an evolutionary change that is good for both Southeast Asia and the United States and Japan, as long as the two countries can effectively align priorities and maintain focus.
The United States has long been an active investor in and trader with ASEAN members, but these economic ties across the Pacific have increased steadily since the end of the Cold War. U.S. trade in goods and services with ASEAN more than doubled between 1996 and 2015, exceeding $260 billion per year to make ASEAN the fourth-largest trading partner of the United States. U.S. firms are also the top aggregate investors in this region, with a stock of foreign direct investment (FDI) in Southeast Asia at nearly $230 billion in 2014. Data from that year show that the U.S. and Japanese FDI outflows to ASEAN each separately continue to outpace those by any other nation outside of ASEAN, even China. Part of what is driving this investment is the fact that the ASEAN region is demographically younger and more economically dynamic than the United States or Northeast Asia.
Of course, the growth in U.S. activity in Southeast Asia pales in comparison overall to what China has accomplished during its phenomenal economic rise since the 1990s. Just before the 1997 Asian financial crisis, the United States and Japan were ASEAN’s largest trading partners, together accounting for over 30 percent of the region’s imports and exports, while China’s share was less than 5 percent. By 2015, however, China’s weight had grown and represented about 15 percent of ASEAN’s total trade, with a value of trade more than 20 times what it was in 1996. China’s leadership in the newly created Asian Infrastructure Investment Bank and related Southeast Asian initiatives will boost its role further.
Yet China’s influence in the region goes beyond mere economics, as it is leveraging years of increased defense and paramilitary spending to assert its preeminence in the South China Sea and claim most of the sea’s resources for itself. This makes many ASEAN members nervous. China’s political and diplomatic strength has risen as well, as shown in 2012 when behind-the-scenes pressure by Beijing on Cambodia, the host of the ASEAN Ministerial Meeting, succeeded in scuttling the association’s issuance of its usual joint communiqué that would have expressed concerns about China’s maritime activities. ASEAN’s efforts to promote economic integration and foster its own regional identity are part of a strategy to maximize control over its own affairs in the face of rising Chinese influence. Deepening partnerships with the United States and Japan are another part of this balancing approach, and the two allies are eager to reciprocate.
Some experts have belittled the idea of elevating U.S.-ASEAN relations to a strategic partnership (from a previously articulated enhanced partnership in 2012) as being mostly about image—akin to credit-card marketing schemes conferring platinum versus gold status. But there is real substance behind this trend even beyond the trade and investment figures. A fourteen-page “Plan of Action” for the new partnership effort lists 24 areas of cooperation including trade, security, health, technology, energy, agriculture, and the environment. Some of the leaders’ time in Sunnylands will be spent prioritizing among these many initiatives, as part of broader conversations (joined by a few U.S. business leaders) about how to simulate economies with innovation and entrepreneurship. Additionally, they will discuss near-term security issues such as protecting their citizens from terrorism and health crises, but they will also consider the long-term future of the region and its relationship with the United States. Overall, a stated focus of the strategic partnership is strengthening a rules-based order in Asia, openness, sustainable development, and the peaceful resolution of disputes.
Such emphasis on the rule of law, good governance, and balanced growth is completely in sync with Japan’s efforts to bolster its relations with ASEAN members, and increasingly U.S. and Japanese policymakers share information and coordinate their initiatives in the region. This has resulted in the successful recruitment of a U.S. firm to be among the first to invest in a Japanese government-supported special economic zone in Myanmar, and it contributed to the creation in 2014 of a U.S.-Japan Development Dialogue in which diplomats and aid specialists from the two countries convene regularly to discuss regional assistance programs. The two allies are also using their defense policy forums to coordinate for maximum effect maritime security capacity-building initiatives in Southeast Asia, where the United States alone is committing $250 million over two years to upgrade equipment, infrastructure, and training. Japan has provided Coast Guard vessels and training to several Southeast Asian nations as well. More broadly, Japan announced in 2015 a five-year plan to increase its aid to Asian infrastructure projects to about $110 billion, which will create new coordination opportunities.
Private sector economic competition between the allies over Southeast Asian markets still exists, of course, and different policy environments in Washington and Tokyo affect the ordering of priorities on such issues as human rights, competition policy, and environmental protection. This can complicate policy coordination and send mixed messages to the region at times, but overall U.S. and Japanese interests are more aligned than ever before. The different approaches, networks, and deployed resources of the two countries are seen increasingly as complementary assets working toward common goals rather than as inhibitors of collaboration.
These common goals include fostering Southeast Asian economic integration to support openness and prosperity, but at the same time strengthening domestic and regional institutions for stability and maintaining ASEAN’s centrality in decisionmaking that affects its members. Washington and Tokyo believe that this is the best way to preserve their nations’ access in the region and could positively influence Chinese behavior by requiring Beijing to work with ASEAN more collectively and equally rather than leveraging its overwhelming size vis-à-vis each member individually in a bilateral manner.
Obama’s Sunnylands summit with ASEAN’s leaders is neither a radical new policy nor a diplomatic master stroke that can alter the balance of power in Asia, but it is more than just a symbol of American aspirations for closer U.S. relations with this increasingly important part of the world. It is rather a reflection of the gains made in recent years in deepening mutual trust, understanding, and common purpose in the region, and it is an opportunity to build upon those accomplishments and address the many pressing economic, security, and social challenges faced by ASEAN.
Close U.S.-Japan coordination before and after this summit meeting can contribute meaningfully to overcoming these challenges, but U.S. and Japanese efforts must be well-focused and sustained to be effective. Human rights issues are important, but enabling steps supporting good governance, institution building, and balanced economic development will benefit more readily from U.S.-Japan collaboration. The allies should also try to involve China as much as possible as an active contributor to this strengthening of ASEAN, because so many of the areas outlined in U.S.-ASEAN and Japan-ASEAN cooperation action plans are truly common regional interests from which all can benefit. Sunnylands offers a potential opportunity to move one step forward in pursuit of regional networking, rule-making, and mobilizing national resources collectively.