What ASEAN brings to Washington

Author: Editorial Board, ANU

The challenges facing the global system and the global economy continue to multiply. The recovery from the COVID-19 pandemic is still at half mast, with global inflationary pressure as well as supply chain issues stemming from lockdowns in China putting a damper on work. The situation in Ukraine continues to deteriorate. Tensions between the two great powers, the United States and China, continue to metastasize in all dimensions of the bilateral relationship. The strategic direction of the United States and Asia is at a major crossroads.

President Joe Biden’s long-promised US-ASEAN summit, which nearly didn’t get started, will take place May 12-13 at the White House. The summit is officially called to celebrate 45 years of diplomatic engagement between the United States and the Southeast Asian regional bloc. This comes after the Biden administration released its rhetorically ambitious but substantially vague Indo-Pacific strategy, with its crucial economic element – ​​the Indo-Pacific Economic Framework (IPEF) – yet to be defined. Biden was keen to underscore ASEAN’s centrality, and for the ASEAN leaders present, it’s a chance to set regional priorities for a superpower whose influence, if it recedes, is still substantial.

Washington is getting into the habit of proposing economic frameworks for Asia: Obama had his “pivot”; Trump his “free and open Indo-Pacific”. The IPEF is the latest, and it shares many of the genre’s common flaws. It revolves around issues that matter to the United States, not issues that are pressing for Asian economies; it reads like a strategy to counter the rise of China; and is unlikely to survive the current administration.

Like its predecessors, IPEF is driven by fears of ceding influence in the region to China, which the United States has ostensibly excluded from IPEF discussions. Washington conceives its economic strategy in the region as a means of achieving its security objectives. Although ASEAN countries are by no means optimistic about China’s behavior, none share Washington’s desire to exorcise its economy.

The huge Chinese market is the engine of the wider Asian economy and no East Asian economy could continue to grow for long without trade and investment ties with China. Moreover, Southeast Asian economies are unlikely to sign up to strict labor or environmental standards unless China is also tied to them, as that would be ceding an advantage. competitive to Chinese companies. Like it or not, a US strategy for Asia that seeks to isolate China economically is doomed to failure.

What is not said is that Asia already has an economic security framework, which has proven itself for more than half a century: the post-war multilateral order. Without it, the economic rise of Southeast Asia would have been unthinkable. In addition to being the keystone of economic growth, the multilateral order has been essential in underpinning the national security of ASEAN member states, removing geopolitics from international economic engagement and building trade relations. and investment that increase the cost of aggression. ASEAN is one of the most enduring and successful regional organizations precisely because it is designed to complement, not compete with, the multilateral order. Its success, indeed, depends on this order.

A simple return to the pre-Trump status quo would not be enough, however. The multilateral order was unraveling before 2016 and the institutions that oversee it need to be redesigned for the 21st century. New rules are needed to cover areas of the global economy left untouched by the Bretton Woods institutions.

This is where ASEAN can play a leading role, especially given Indonesia’s convening power through the G20 this year, and building on ASEAN’s recent experience. in terms of institutional innovation thanks to the conclusion of the regional comprehensive economic partnership, an agreement which incorporates a substantial element of economic cooperation .

The opportunity for ASEAN to launch this agenda through the G20 is real, but complicated, especially given the politics of the Russia-Ukraine crisis, which threatens to overshadow the G20 year in Indonesia.

As Yose Rizal Damuri and Peter Drysdale argue in our feature story this week, “Indonesia’s role in the G20, its standing in the developing world and its weight in ASEAN make it vital for United States and China”. Indonesia’s diplomatic instinct is to build bridges between the developed and developing worlds, an asset in the G20 that brings everyone together. Indonesia’s size, legitimacy and tradition of non-alignment make it one of the few who can lead the G20 in difficult times like these. The United States also needs Indonesia more than it realizes for its own purposes: the Biden administration’s Indo-Pacific framework and, indeed, anything the United States does in Asia will require Indonesia. ‘membership of Indonesia to succeed’.

The pressure on Indonesia is immense. As president of the G20, he will have to find a way to thread a certain number of needles: in particular to find a solution to the question of Russian participation around the Ukrainian question. Indonesia cannot allow urgent issues to override systemic issues. The G20’s comparative advantage lies in its ability to bring together all major players in the global economy, not just the G7 group of advanced economies, to discuss the global system. The Indonesian presidency comes after several years in which the body, hosted by wealthy countries, has focused on valid but second-order issues for emerging economies.

The times call for moderation boldly. What is required of Indonesia and its ASEAN partners in their mission to Washington is quiet clarity about their multilateral interests and priorities and what is at stake for all in the G20 and the global process.

The opportunity to refocus the debate on the renewal of the multilateral order has presented itself. The days when the United States could unilaterally impose the rules of international economic exchanges are long gone, even if Washington still had the will to do so. What Washington can do is promise to support – institutionally and materially – a collective Asian effort to reshape the world order.

The EAF Editorial Board is located at the Crawford School of Public Policy, College of Asia and the Pacific, The Australian National University.

Melvin B. Baillie