Trade and industry, International relations, National security | Asia, East Asia, Southeast Asia

6 September 2017

Against the backdrop of North Korea, rising China, and scandal-prone leaders on both sides, perhaps the best outcome to be expected in relations between the US and Malaysia is a reaffirmation of the status quo, Mustafa Izzuddin writes.

US Secretary of State Rex Tillerson’s official visit to Malaysia on 8-9 August was his first to the country since being appointed. But what does it mean for US-Malaysia relations?

Although the Malaysia visit came after Indonesia and Singapore had already been visited by other senior officials from the Donald Trump administration, it was no less important and could still be regarded as an optimistic sign for US-Malaysia relations. Tillerson’s visit also coincided with the commemoration of 60 years of US-Malaysia bilateral relations, particularly in the areas of political and diplomatic cooperation, trade and investment, science and technology, education, people-to-people linkages, defence and security, and even regionalism.

According to the US State Department, Tillerson’s travel to Southeast Asia was meant to “reaffirm the Administration’s commitment to further broaden and enhance US economic and security interests in the Asia-Pacific region.” This was to reassure countries in Southeast Asia that the US has no intention of disengaging from the region, despite early ominous signs of Trump repudiating Obama’s pivot to Asia and pulling America out of the Trans-Pacific Partnership trade deal.

More on this: Can Tillerson tackle a tense East Asia?

Tillerson’s visit to the region was mainly driven by America’s national security considerations as it was meant to drum up support from selected Southeast Asian countries in regard to North Korea.

Despite Trump’s hard-line stance on North Korea and rhetorical ‘fire and fury’ remark, Tillerson seemed to favour a more lasting diplomatic political solution to de-escalate tensions in the Korean Peninsula.

Against this backdrop, Washington has been reaching out to key actors in the Asia-Pacific region to help safeguard its security interests. In particular, the US has constantly urged and even pressured countries in Southeast Asia to share intelligence with Washington, implement fully the international sanctions, and sieve out North Korean clandestine operations which tend to use companies as a front for its secret meetings and sending money back home to prop up the North Korean regime.

Malaysia has been identified by the US as a pivotal player to rein in North Korea. Until the assassination on Malaysian soil of Kim Jong-nam, half-brother of North Korean supreme leader Kim Jong-un, which sparked a diplomatic feud between the two countries, Malaysia and North Korea had had a close working bilateral relationship, despite it being more symbolic than substantive. In spite of the ugly fallout, there are still about 1000 North Koreans working in Malaysia and the North Korean embassy remains intact despite the expulsion of its ambassador.

More on this: Kim Jong-nam’s death won’t be the last killing in Malaysia

Washington’s expectation is that the Malaysian government would be prepared to share privileged information and intelligence briefs to crack down on North Korea. Working with the US on North Korea is not new for Malaysia. The Southeast Asian nation’s rise to middle-power status was pivotal in “allowing it to play a friendly third nation role in facilitating secret talks as well as open negotiations between the US, South Korea and North Korea throughout the nuclear talks in the 2000s.

The palpable difference is that Malaysia had sufficiently good relations with both the US and North Korea, but now Malaysia is being pressed instead, in the spirit of mutually-reinforcing US-Malaysia relations, to work with the US at the expense of North Korea.

Central also to American national security interests and Trump’s campaign promises is the battle against terrorism and ISIS. Unsurprisingly, Tillerson conveyed Washington’s appreciation to Malaysia for its no-nonsense crackdown on radicalised groups sympathetic to ISIS, as well as praising the country’s de-radicalisation program which has a 97.5 per cent success rate where around 242 detainees have been rehabilitated thus far. This sharing of experience, expertise and information on fighting terrorism and de-radicalisation can certainly bring the US and Malaysia closer together.

Tillerson’s Malaysia visit came in the midst of mounting domestic criticism that the administration of Prime Minister Najib Razak was dragging Malaysia into China’s economic orbit given the sheer size of Chinese investments pouring into the country. The Najib administration has been repeatedly accused by far-right Malay nationalist groups and the political opposition of being too pro-China and selling Malaysia’s sovereignty.

More on this: Is Malaysia turning its back on the West?

Trade and investment from China pouring into Malaysia helps to boost the Malaysian economy. This, in turn, augments Najib’s legitimacy to govern the country and enhances the chances of his political coalition being returned to government at the upcoming election, due by August 2018. So it was expected when Najib lamented that it was foolish to turn away investments from countries like China as it shows “a fundamental misunderstanding of economics.

China has also helped Malaysia with the bailout of the state investment fund 1MDB, a never-ending scandal that has engulfed much of Najib’s premiership. It is not surprising that China is now Malaysia’s largest trading partner, with two-way trade in 2016 valued at US$83.4 billion.

Tillerson’s Malaysia visit could, however, help mitigate Najib’s pro-China problem in two ways. The first is to enable Malaysia to use the US as a hedge: engage China economically but keep relations with the US on an even keel, not least from a security standpoint. This was made even more necessary given the sightings of Chinese boats and vessels in Malaysia’s maritime exclusive economic zone, within the larger backdrop of the unresolved South China Sea dispute of which both Malaysia and China are claimants.

Second, Tillerson’s trip allowed Najib to demonstrate domestically that Malaysia is its own country and is ruled by an experienced government capable of preserving the country’s sovereignty – in other words, Malaysia is neither Sino-centric nor American-centric in its foreign policy.

Three roadblocks, however, prevent the bilateral relationship from moving up a gear. First, Trump’s America First protectionist strategy means that any possible bilateral trade deal will be difficult to conclude. Malaysia-US trade is unlikely to increase substantially with Trump in the White House, much less match Malaysia-China trade. As it stands, the US is Malaysia’s third largest trading partner and Malaysia is America’s 18th biggest, with bilateral trade worth US$32.78 billion in 2016. Perhaps the best-case scenario is for the volume of bilateral trade to be maintained at these levels.

More on this: Najib’s fear campaign

Second, Trump’s open embrace of anti-Islam bigotry during the presidential campaign and his attempt to enact a Muslim immigration ban made him extremely unpopular across the Muslim world, Malaysia included. As a result, Najib has been compelled to tread carefully in engaging Trump’s America for domestic political reasons.

Third, the continued investigation into the 1MDB money-laundering probe by the US Department of Justice (DOJ) could result in Washington being compelled to keep Najib at a distance. Although Najib is likely to make an attempt to downplay the 1MDB probe in his upcoming US visit, the DOJ is unlikely to slow down its investigation into 1MDB, even if it implicates Najib in the process. The DOJ’s 1MDB probe could well hinder any meaningful progress in US-Malaysia relations.

On balance, there was cause for optimism in Tillerson’s Malaysia trip for an improvement in US-Malaysia relations. But the three roadblocks stated here would certainly dampen any high optimism. To say the glass is half full in US-Malaysia relations at the present time is perhaps the most apt description.

As I’ve previously argued, a good outcome for US-Malaysia relations is for it to be scrupulously kept in neutral gear throughout the Trump administration by ensuring the continuation of the Comprehensive Partnership signed in 2014. Much will also be expected during Najib’s September trip to the US. But from a practical standpoint, as this is a Trump Whitehouse that is impulsive and unpredictable, a simple reaffirmation of 60 years of multifaceted US-Malaysia relations would be a good enough positive diplomatic outcome for the Najib government. Malaysia’s hope is that a disruptive White House does not result in disruption to US-Malaysia relations.

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