Saturday, October 5, 2013

US Shutdown: Fallout for Asia; Windfall for China

China reaps rewards of US govt shutdown

4 Oct 2013


WASHINGTON — Debate over the federal government shutdown has tended to focus on those it hurts: Veterans, tourists barred from the Lincoln Memorial and Yellowstone National Park, and giant panda enthusiasts deprived of their publicly funded panda cam.

But the shutdown has already produced at least one winner: China.

By forcing US President Barack Obama to cancel a visit next week to Malaysia and the Philippines, the impasse with House Republicans is spoiling his show of support for two South-east Asian countries that have long laboured under the shadow of China. And it is undermining his broader effort to put Asia at the heart of American foreign policy.

Mr Obama’s planned itinerary for next week — a mix of summit meetings and goodwill visits — was carefully moulded to reinforce the message to China that the United States is once again a central player in the region.

But the President’s Asian pivot keeps getting pulled back by two forces that have haunted his presidency: Strife in the Middle East and strife with Capitol Hill.

For now, the White House is clinging to the two remaining stops on Mr Obama’s tour: A Pacific Rim economic summit meeting in Indonesia at which he hopes to meet with President Vladimir Putin of Russia, and the East Asia Summit, in the sultanate of Brunei, where he is scheduled to meet the new Prime Minister of China, Mr Li Keqiang.

With little sign of a compromise that would reopen the government by this weekend, however, Mr Obama may be forced to scrap those visits, too, sending Secretary of State John Kerry as his understudy. It would be the third time he has been forced to sacrifice an Asia trip because of domestic issues — he postponed a visit in March 2010 because of the battle over the healthcare overhaul, and delayed it again four months later because of the oil spill in the Gulf of Mexico.

“Diplomatically, it’s very harmful,” said Mr Kenneth Lieberthal, a top China adviser during the Clinton administration. “I’m sure there are some in China who say, insofar as the US pivot has China as its bullseye, this prevents them from hitting that bullseye.”

Mr Jeffrey Bader, who was Mr Obama’s senior adviser on China until 2011, said the White House’s attempt to salvage the two meetings, even amid the chaos of the shutdown, was an important sign that it remained committed to the region.

But he added: “The mayhem that compelled the decision sends an unfortunate signal to those countries that the US is far away, and that the US political system is dysfunctional.”

While Mr Obama’s plans are in flux, President Xi Jinping of China has embarked on a tour of South-east Asia with visits to Indonesia and Malaysia.

China, with its expansionist impulses, is a clear beneficiary of a distracted US. It has clashed with Malaysia and the Philippines over claims to rocky outposts in the South China Sea, which the three countries border. On previous visits, Mr Obama said the US wanted to resolve these disputes peacefully and keep sea lanes open.

The administration wants to wrap up negotiations on a trade deal by the end of this year, a goal few analysts believe it can achieve.

That may be even more elusive if Mr Obama cannot personally offer his public backing at the Asia-Pacific Economic Cooperation (APEC) forum, on the Indonesian island of Bali.

The turmoil in Syria has reinforced the reality that the Middle East is likely to remain a preoccupation for Mr Obama.

In his speech at the United Nations last week, he mentioned Asia in a single line, noting that it could serve as an economic example.

While the President may be no less committed to the region, there is a reduction of Asia expertise on his senior team. Mr Kerry has made the Middle East, and particularly peace negotiations between Israel and the Palestinians, his top priority, in contrast to his predecessor, Mrs Hillary Clinton, whose first trip in the post was to Asia and who led the drive to open diplomatic ties with Myanmar.

Ms Susan Rice, the National Security Adviser, has by necessity focused less on Asia than her predecessor, Mr Tom Donilon, while Treasury Secretary Jacob Lew has far less experience in the region than his predecessor, Mr Timothy Geithner.

Administration officials counter that Commerce Secretary Penny Pritzker and the US Trade Representative, Mr Michael Froman, are both heavily involved in Asia.

But among top officials, only Defence Secretary Chuck Hagel, whose history in Asia dates to his combat service in Vietnam, seems eager to put the rebalancing at the top of his agenda.



An unfortunate twist in the US pivot

By Simon Tay

4 OCT 2013

American President Barack Obama was due to tour Asia next week to attend two key multilateral summits and visit two other countries — Malaysia and the Philippines. The White House initially described this as an “on-going commitment”, building on the American pivot to emphasise ties with the region that the President established in his first term.

Events, however, have intervened. With the domestic debacle of the American government shutdown, reports are that the President’s trip might be cancelled or, at least, shortened. The Asia-Pacific Economic Cooperation (APEC) Summit in Bali and the East Asia Summit in Brunei are likely to remain on the agenda. But bilateral stops in Malaysia and the Philippines have been cut.

This will not be without costs.

Mr Obama’s pivot, after all, primarily gave a political reassurance that US commitment remains, despite the crisis and possible impact on the coffers. The actual number of troops deployed in Asia — despite past headlines about Marines near Darwin — was ancillary.

The government shutdown starkly reveals divisive and dysfunctional Beltway politics. If they can furlough jobs, cease government services and risk a downgrade in the country’s credit rating, will American politicians be consistent about faraway Asia?


There is also Syria to show how the Middle East soaks up American time and attention. US Secretary of State John Kerry seems to be wading into Middle East issues — not only Syria, but also Iran and even Israeli-Palestinian peace. Many of these priorities were voiced by Mr Obama at the United Nations.

If he does come to Asia, the President’s speeches will no doubt shift emphasis. But a subtext has emerged to question if the pivot will be sustained in his second term. And even if sustained, American engagement may no longer be as welcome.

Take the administration’s centrepiece for trade and economic ties, the Trans-Pacific Partnership agreement. Over the past months, American negotiators have pushed hard for Asians to cough up “deliverables” that suit US interests. Resistance has grown, rather than any sense of partnership.

This is a sharp contrast to China, which has not backed down on claims in the South China Sea, but nevertheless has adjusted its diplomacy.

With Foreign Minister Wang Yi smiling benignly, Beijing is calmly laying down a 10-year strategy for engagement.

Alongside the US$500 million (S$625 million) China-ASEAN Maritime Fund and US$50 billion Asian Infrastructure Fund, an upgrade to the China-ASEAN Free Trade Agreement seems likely, with new Chinese concessions to benefit its South-east Asian neighbours.

Malaysia, despite having overlapping claims with China to parts of the South China Sea, will roll out the red carpet for President Xi Jinping. His three-day state visit this week is expected to usher in a new era in ties between the two countries.

This makes a sharp contrast to Mr Obama’s reported decision to cancel, especially as no incumbent US President has been to Malaysia since Lyndon B Johnson during the Vietnam War.


The Philippines, another visit that has been cancelled, is in quite a different situation. The Aquino administration has challenged the Chinese claims, both at sea and through international arbitration. Beijing in response seems to be systematically isolating the Philippines.

The planned visit by President Benigno Aquino III to the ASEAN-China trade expo — ironically a flagship friendship event — was unceremoniously upended just last month.

The lesson is clear to other Asians who recall the old Chinese adage to, “kill the chicken to scare the monkeys”.

Because of this, it is Manila who will most miss Mr Obama. The two countries are already looking to an agreement for more troop visits and discussing the development of a mini-Subic Bay to host the American navy, proximate to maritime areas in dispute.

This might be delayed by the US President’s cancellation. But it will not be derailed. Indeed, there is some danger that America may, intentionally or otherwise, overcompensate with statements that the Chinese might find provocative.


If Mr Obama does come to Asia, there are opportunities to salvage matters somewhat.

Practically speaking, he can meet with Russian President Vladimir Putin at the sidelines of the APEC Summit as a next step in coming to an agreement over Syria.

Symbolically, if he comes despite the US government shutdown and looming debt ceiling deadline, this can show the level of his interest, even under intense pressure at home.

Not all things will be resolved. But getting on Air Force One even for a shorter visit would be something to show US commitment.

Otherwise, Asian questions about the sustainability of the American pivot will find their own answers.


Simon Tay is chairman of the Singapore Institute of International Affairs and the author of Asia Alone: The Dangerous Post-Crisis Divide from America.

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