Strategic Concern Deepens
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US-SOUTHEAST ASIA RELATIONS STRATEGIC CONCERN DEEPENS CATHARIN DALPINO, GEORGETOWN UNIVERSITY The choice of two Southeast Asian countries to host US-North Korea summits in the past year has lent some credence to claims that the region serves as the foundation for regional dialogue and cooperation. In early 2019, the region was also the recipient of extra attention when foreign investment in China began to move south, driven by US tariffs on China imposed in late 2018. However, there was little sign that new bilateral trade agreements with the US will materialize in the near term. Meanwhile, greater security cooperation with the US is more likely with the bombing of a cathedral in the southern Philippines in January serving as another harbinger of increased ISIS activity in the region and continued militarization of the South China Sea strengthening the rationale for the US-Philippines alliance but also putting more pressure on it. In political developments, Thai elections in March left questions about whether the military will remain dominant while Indonesian elections in April were less controversial, with incumbent President Joko Widodo retaining power. This article is extracted from Comparative Connections: A Triannual E-Journal of Bilateral Relations in the Indo-Pacific, Vol. 21, No. 1, May 2019. Preferred citation: Catharin Dalpino, “US-Southeast Asia Relations: Strategic Concern Deepens,” Comparative Connections, Vol. 21, No. 1, pp 45-54. US-SOUTHEAST ASIA RELATIONS | MAY 2019 45 Introduction tech goods. In addition to Japanese and Western companies, China has been relocating some of Southeast Asians never tire of casting the region its lighter manufacturing base to Southeast Asia. as the crossroads for great powers and the Foreign direct investment (FDI) to ASEAN foundation for regional dialogue and accelerated in the second half of 2018, when the cooperation. The choice of two Southeast Asian US-China trade dispute was in full swing. In the countries to host US-North Korea summits— first half of 2018, the greater momentum was on Singapore in June 2018 and Vietnam in February the China side. In general, the Southeast Asia 2019—lends some credence to these claims. In region remains a robust investment site: both early 2019 the region was also the recipient of trends go against global drift in FDI in 2018, extra attention when foreign investment in which showed a 19% decline. China began to move south, driven by US tariffs on China imposed in late 2018. More may come This investment windfall has not been evenly from Europe as the European Union ratchets up spread across the region. Singapore, Vietnam, efforts to forge “bilateral” free trade and Thailand have been the main beneficiaries; agreements with ASEAN states and the United by contrast, Indonesia’s FDI flows continue to Kingdom looks for new economic opportunities drop, in part because of the slow pace of to offset losses it faces with Brexit looming. economic reform. FDI in Myanmar, where However, there was little sign that new bilateral international investor optimism over promised trade agreements with the United States reforms in the earlier years of the decade has promised by the Trump administration will waned, also fell in 2018, from $6.6 billion to $5.7 materialize in the near term. billion. Greater cooperation with the United States on Although welcome, Southeast Asia’s new security is more likely. The bombing of a investment boom is not without qualifications, cathedral in the southern Philippines by the most obviously that it could be a short-term Islamic State in January was another harbinger phenomenon if Washington and Beijing resolve of increased ISIS activity in Southeast Asia as their trade differences. The new influx in their operatives are pushed out of the Middle investment puts further strain on shaky East. This threat and China’s continued Southeast Asian infrastructure. As well, it is a militarization of South China Sea land features disincentive for Southeast Asian leaders to strengthens the rationale for the US-Philippines follow through on the more difficult aspects of alliance but also puts more pressure on it. In implementing the ASEAN Economic March, Secretary of State Mike Pompeo was Community. Stimulating intra-ASEAN trade compelled to offer public assurances that the and investment will be an important strategy US-Philippines Mutual Defense Treaty extended when investment in Southeast Asia begins to to the South China Sea. More broadly, slow, as it inevitably will when the region’s Washington warned that Chinese plans to labor costs rise. transform the region’s infrastructure—both physical and digital—carried risks for Southeast Hanoi plays host Asian countries. Thai elections in March were intended to lead the country out of direct military rule, but it remains to be seen whether the military will remain dominant in the new political process. Indonesian elections in April are likely headed for a less controversial result, with incumbent President Joko Widodo tipped to retain power. The spoils of tariff war Although the data is still preliminary, it strongly suggests that the US-China trade dispute has fueled an investment and trade surge into Southeast Asia. The trend has brought more Figure 1 Vietnamese Prime Minister Nguyen Xuan Phuc and high-value, high-technology investment (such US President Donald Trump meet on the sidelines of the US- as electronics), as well as textiles and other low- DPRK Summit in Hanoi. Photo: The New York Times 46 MAY 2019 | US-SOUTHEAST ASIA RELATIONS If there was a winner in the US-DPRK summit Past US administrations have approached in February, it was Vietnam. Although its value Philippine inquiries on the applicability of the was purely symbolic, the choice of Hanoi as a MDT to the South China Sea with predictable venue was a mix of principle and realpolitik. wordsmithing. Two essential communiques— Vietnam has longstanding ties with North Korea one from Secretary of State Cyrus Vance in 1979 but a deepening relationship with the US as well. and a follow-up from Ambassador Thomas Washington also held Vietnam up as a model— Hubbard in 1999—maintained that Washington and a pathway—to Pyongyang, for transition would apply the MDT to official Philippine ships from an isolated country with a doctrinaire and aircraft “in the Pacific,” beyond the regime to a nation integrated into the metropolitan range specified in the treaty. The international community with a government inclusion of the South China Sea in this mandate open to economic reform. There is little may have been implied by Washington, but it evidence that Pyongyang (or Hanoi) would draw was not always inferred by Manila. such parallels, but the comparison was taken as a US vote of confidence in Vietnam. Hosting the summit also helped Hanoi in its determination to rebrand Vietnam as the “Geneva of Southeast Asia,” a mid-sized country that can move adroitly among greater powers. This follows on the good marks that Hanoi earned for its chairmanship of ASEAN in 2012, when the government functioned as an interlocutor between the West and the Myanmar military during by-elections that marked the beginning of a political reform period. Hanoi Figure 2 USS Blue Ridge makes a port call in Manila on will take up the ASEAN chair again next year. March 13. Photo: AP A critical clarification? During his visit, Pompeo first met President Duterte and, in a joint press conference with A number of annual military exercises—Cobra Foreign Secretary Teodoro Locsin on March 1, Gold, the Pacific Partnership, and the US- addressed the South China Sea issue head-on Philippine Balikatan exercises—kept the US with an explicit statement that the area was security profile high in Southeast Asia in the covered under the MDT. Not surprisingly, early months of 2019. In the absence of a reaction to Pompeo’s statement was mixed. confirmed secretary of defense, a greater role in Public opinion polls consistently show that over alliance management fell to Secretary of State 80% of the Philippine public supports the Mike Pompeo. On his return to Washington alliance with the US and an equivalent from the Hanoi summit, Pompeo stopped in percentage are nervous about Duterte’s Manila Feb. 28–March 1 to address chronic handling of the South China Sea. However, some concerns about the reliability of the United in the Philippine defense sector expressed States, specifically a call by Philippine Secretary skepticism that Washington would risk direct of Defense Delfin Lorenzana to review the US- conflict with China over the Philippines. They Philippines Mutual Defense Treaty (MDT) and pointed out that much of Chinese subsequent agreements that support the aggressiveness against the Philippines in the alliance. South China Sea is targeted at Filipino fishing fleets rather than official vessels. Others Lorenzana’s demand was hardly the first for a expressed nervousness that Pompeo’s high-profile and controversial alliance, but in statement would needlessly irritate Beijing. this case, it reflected increasing nervousness in Manila over whether the US would come to the Nevertheless, the statement may have put US- aid of the Philippines in a conflict with China in Philippine security relations on more solid the South China Sea. For decades Washington footing. In any case, Manila values the alliance has been reticent on this issue and, since as much or more for US assistance in President Rodrigo Duterte’s election in 2016, counterterrorism; the 2017 siege of Marawi City has been focused simply on keeping the alliance and the bombing of a cathedral on the island of on an even keel. US-SOUTHEAST ASIA RELATIONS | MAY 2019 47 Jolo in the southern Philippines in January only yet decided upon a hardware provider for its underscored that need. own transition to 5G.