I have been working with Joshua Treviño as an editor at Malaysia Matters (a site dedicated to tracking news and events in Malaysia from an American perspective). In this role, I have learned a great deal about the importance of Asia economically and strategically. Building on that, I have an article at the Huffington Post highlighting an issue that you might not be aware of but should be: the Free-Trade Area (FTA) between China and the ASEAN nations.
Erick has been diligent in pointing out how President Obama’s inexperience and amateurishness has threatened America in numerous ways (intelligence and terrorism just to name two). I hate to continue the spate of bad news, but this is yet another area where his lack of engagement threatens to undermine America’s standing in the world and her strategic position for the long term.
For more on this important issue keep reading.
First, here are the basics on the free trade area:
The China-ASEAN FTA comes into effect in two stages: six ASEAN nations and China eliminate tariff barriers in this new year, and the other four (Burma, Cambodia, Laos, and Vietnam) plus China eliminate tariffs in 2015. By the middle of the new decade, then, the ASEAN bloc will add to itself a Chinese economy with its own impressive accomplishments. At approximately 1.3 billion persons, China is the world’s most populous state, and at a GDP of nearly $8 trillion, its economy is just over half the size of America’s. Like ASEAN, China’s GDP growth exceeded the world average, and that of the United States, in 2007 and 2008, with 11.4% and 9.6% growth respectively.
What does the combined China-ASEAN Free Trade Area look like together? In a word, huge. The unified trade area is just a few years away from two billion people and a $10 trillion GDP. And it will keep growing. Trade between China and the ASEAN nations more than tripled in the five years ending in 2008, when it stood at just under $200 billion. With free trade, expect that number to skyrocket. The China-ASEAN FTA will be smaller than the NAFTA and the European Union, but it’s not unreasonable to assume it will surpass the EU within the decade if present growth rates continue.
And a note on the significance:
That’s the key to the deeper significance of the China-ASEAN FTA. It doesn’t just link China to the nations that are adjacent to it anyway. It also further solidifies the deepening link between China and the Islamic world. Malaysia is surely at the center of this link, not simply geographically, but also as an east-Asian state at the center of the emerging Islamic-finance sector. Expect its own diplomatic stature to dramatically increase as an intermediary in the Chinese-Islamic connection.
What was in centuries past expressed by the Silk Road is now reemerging as a mostly maritime trade-and-energy link with a worrying overtone of historical resentments and vague anti-Western antagonism. It’s not an inevitably bad development for America, nor even for Europe — but it directly involves neither, and it’s perhaps the biggest geo-strategic development of our young century. If the central strategic fact of the 19th and 20th centuries was the centrality of the West, the strategic surprise of the 21st may be its dispensability.
Jumping off this piece my colleague Josh adds some further analysis at the New Ledger:
The political dimension of this convergence is a bit more worrying to the United States. Where, after all, do the political interests of Chinese and most Islamic states coincide? It’s a bad list: in the suppression of democracy, in the denial of minority rights, and in the rejection of Western dominance. The ASEAN nations themselves aren’t quite so uniformly malign, though they do have their bad actors in Burma, Vietnam, and Laos – but neither will they have much interest in countering the Chinese-Islamic concurrence on these points. We already see it in effect in international fora, most recently in the failed Copenhagen talks, when Sudan served as a Chinese proxy for the disruption of the proposed treaty. (This may actually be the first and only time Americans can applaud this partnership.) Expect more of this, and expect it to spill into war-and-peace matters in decades to come. If the Islamic world perceives China as a counterweight to Western influence – and if Chinese nationalism desires to be perceived as that counterweight – that’s a series of difficult choices for American policymakers in the years ahead.
Josh hits on two US strategic options:
– court the powers left out of the China-ASEAN-Islamic bloc (India in particular).
But Josh puts his finger on the problem we are facing:
Acceptance, integration and counterbalance: these are the broad strokes that ought to inform America’s response to the China-ASEAN FTA that was born at midnight on the new year. The questions are whether the Obama Administration will have the wisdom to pursue it – and whether it realizes a challenge exists at all.
So you have to ask yourself if you trust Obama to engage on this critical issue. Domestically he has been busy – when not golfing – twisting every possible arm to pass health care reform against the wishes of the American people. He spent precious time and resources on Copenhagen and seems intent on passing a devastating Cap and Trade system (if vulnerable Democratic senators don’t convince him to hold off).
On the national security front, he seems incapable of recognizing the war on terror as anything more than a law enforcement or public relations battle; and avoids making the necessary commitments and hard choices. He has damaged relationships with the CIA and our allies around the world and blamed former President Bush at every possible opportunity.
On top of all of this, the President’s leftist base is full of anti-free trade unions intent on preventing critical trade agreements from moving forward despite their obvious benefit to the American economy and the important role they play strategically.
Do you think President Obama has the capability and inclination to ignore the shrieks from the unions and diligently pursue free trade in Asia as a counter-weight to the growing strength of China and the Islamic world? Does having Hillary Clinton at the State Department make you feel any better?
This may not be a question you have been asking yourself with all of the controversies swirling around of late. But the China-ASEAN FTA has the potential to re-shape the world as we know it in the coming years and more disengagement and bungling from the Obama administration could be devastating.
As we have learned lately about terrorism, pretending something doesn’t exist won’t make it go away. Developments in Asia and the Islamic world require attention, skill and expertise. We should be worried that the Obama administration lacks what it takes to further America’s long term interest in this crucial part of the world. And we should be contemplating what can be done to change this situation in both the short and long term.