Economics and finance, International relations, National security, South China Sea | Asia, East Asia, The World

14 November 2016

The countries of East Asia are scrambling to make sense of what Donald Trump’s presidency means for their future security and economic relations. Stephen R Nagy offers some pointers on what might come next.

Since the end of World War II, the US and its partners in East Asia have had a tacit understanding that the US would provide security guarantees to its partners in the region so they can focus on economic growth, stability and prosperity. Japan and South Korea were the immediate benefactors but so too were China and Southeast Asian countries as the understanding meant they could concentrate on their socio-economic development instead of security activities that would have diverted valuable financial resources to the military, delaying economic and social development.

China’s emergence as the dominant economy within the region led to states in the region looking to China for their economic prosperity, but increasingly looking to the US for their security. This economic engagement with China and security hedging with the US has allowed Southeast Asian states to remain focused on socio-economic development, even as territorial disputes in the South China Sea (SCS) were coming to a boil.

In the wake of President-elect Donald Trump’s electoral victory, many countries in Northeast and Southeast Asia are trying to get to grips with what the new President’s positions and commitment to the region will be and how they will affect the delicate economic engagement and security hedging strategies of countries in the region. To understand his potential foreign policy positions, a good starting point is to examine the advisors that surround him such as the University of California Irvine Professor Peter Navarro. Second, we need to evaluate his trade policies, specifically whether he will advocate an insular, isolationist policy or will he continue to embrace globalisation and trade, open markets and economic liberalisation. Third, we need to examine his own statements concerning the burden East Asian partners should bear for US security partnerships.

More on this: Trump and the future of American policy in Asia

Navarro is the author of Death by China, The Coming China Wars: Where They Will Be Fought, How They Can Be Won and Crouching Tiger: What China’s Militarism Means for the World. The titles themselves suggest that US-China relations under a Navarro-influenced Trump Presidency would tilt Sino-US relations away from the bipartisan approach that has existed since China and the US began normalising relations in February 1972. During that 40-plus year period, through economic engagement and a process of incremental institutional socialisation, the US sought to bring China into international institutions such as the World Trade Organization in order to bind them into a rules-based international system. Navarro’s views on China may lead to a Trump Presidency in which China was overtly seen as an economic, political and security rival determined to change status quo and remove the US from its dominant position within the region.

Trade policy is a useful area to illustrate their more antagonistic approach. In his co-authored policy recommendations Scoring the Trump Economic Plan: Trade, Regulatory, & Energy Policy Impacts Navarro and Wilber Ross argue that Trump’s economic policies “will end, not start, a trade war” by ending unfair trade practices and policies by countries such as China, South Korea, Japan and others.

While addressing unfair trade practices and policies may be popular domestically in the US, a determined effort to renegotiate trade relations may lead Japan, China and South Korea to sign regional trade agreements such as the China-Japan-Korea FTA or to ratify the Regional Comprehensive Economic Partnership trade agreement, both of which exclude the US. The effect would be to exclude the US from the largest trading agreement and weaken the US’ position in East Asia. East Asian countries implicitly understand this and will stress this in their economic relations with the US.

More on this: The Trans-Pacific Partnership: more than a trade agreement

Trump’s pre- and post-election statements on trade have been controversial. Vowing to not sign the Trans Pacific Partnership (TPP) and to renegotiate the North American Free Trade Agreement, Trump’s election guarantees the TPP will not be passed. More crucially, it complicates the US multipronged ‘Rebalance/Pivot’ strategy in East Asia that embeds a China policy in an East Asian grand strategy that links trade, norms and security. Seen from Beijing, the sinking of the TPP ship is a welcome development as it slows what Beijing perceives as a US-led containment strategy by weakening the US’s economic hold in the region. Prioritising security and anchoring itself in the SCS and East China Sea (ECS), intransigence, the lack of prioritisation, and/or retrenchment under Trump may lead Beijing to take a more assertive approach to its core interests including territorial disputes in the SCS, ECS and Taiwan.

From Seoul, Tokyo and many Southeast Asian capitals, the TPP’s death in its present form is a huge setback as it both strengthens the narrative that the US is not committed to the region, and makes the US look like an unreliable partner to maintain that delicate balance between economic engagement and security hedging. In each case and as mentioned above, capitals in East Asia may look to regional trade pacts to insulate themselves from an America increasingly perceived as uncommitted, unable to exert leadership, and distracted by the Middle East and domestic political gridlock. That being said, South Korea, Japan and TPP signatories may also use the threat to join other trade pacts as a bargaining process to pressure the US to get back to the TPP table.

Lastly, Trump has also suggested that South Korea and Japan should shoulder a larger burden for US security partnerships and even consider acquiring nuclear weapons. Both statements left Seoul and Tokyo questioning the US’ security commitments to each respective country as well as the country’s security commitment to the region. It also left Beijing with the conundrum of considering what kind of security architecture would develop in the absence of the US’ security guarantees. Considering South Korea and Japan’s level of technological and socio-economic development and security concerns vis-à-vis North Korea, China, and each other, a US security vacuum would likely push South Korea and Japan to arm, sparking an unwanted arms race in the region and diverting value resources away from regional economic integration and socio-economic development. This is not the preference for China, South Korea, Japan or any of the countries in Southeast Asia.

While a Trump Presidency represents many unknowns for Northeast and Southeast Asian countries in terms of security commitments and US political and economic interests in the region, we should understand that East Asia’s economic largess and economic potential are assets to be leveraged under a Trump Presidency. At the same time, they should look at the historical and bipartisan consistency of US – East Asian foreign policy since 1972 firmly grounded in national interests, strong institutions and rule-of-law as strong indicators that a Trump Presidency may be cosmetically different than pass presidents but at a deeper level driven by strategic interests.

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One Response

  1. Bhatta Joshi Jyotshna says:

    Thank you for this multi dimensional, insightful analysis.
    The rise of Trump’s presidency can however also lead to China’s monopoly in East Asian region. The balance maintained by US, if breaks down, China, can arise as central power of East Asia. The regional collaboration might be increasing between East Asian countries, but China’s dominancy will persist more apparently, in the region.

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Nagy, Stephen R. 2016. "Delicate Balance, Perilous Pivot - Policy Forum". Policy Forum.