Deconstructing Order in Southeast Asia in the Age of Trump - By CWP Alumni Ja Ian Chong

Tuesday, Sep 26, 2017
by dsuchens

With its primary stated goal of re-working the nature of America’s relationship with the rest of the world, the administration of President Donald Trump comes at an awkward time for Southeast Asia. Regional states are at a moment where they are adjusting domestic politics, their relationships with each other and the main inter-governmental organization, the Association of Southeast Asian Nations (ASEAN). They are also responding to China, whose role in the region is evolving as Beijing moves into a new stage in its decades-long development into a major world power that is more ready to take robust positions on issues where its interests sometimes diverge with those of its neighbours. Amid these changes, Washington seems to be looking to move away from its longstanding commitment to liberalizing trade and investment in Asia, while taking a more openly muscular stance on security. Specifically, the United States under Trump is pondering possibilities for altering the longstanding basis for its economic and security exchanges with China, which includes adopting policies that differ more starkly from, or even oppose, those of Beijing. [End Page 29]

Even though it is early days for the Trump administration, current developments suggest good reason to expect uncertainty, possibly even some turmoil, at least in the short term. The regional security and economic architectures in Southeast Asia — primarily the post-World War II US-backed order on the one hand and ASEAN and various arrangements built around it on the other — are especially unprepared for addressing major shocks or crises at this moment. Cleavages among ASEAN members and limited institutional capacity constrain the responses regional actors can take collectively, and may dampen individual reactions as well. Even though armed conflict among Southeast Asian countries remains unlikely, effective regional cooperation in the face of greater instability and uncertainty may be difficult to achieve and sustain without consistent American support. Given that Trump and his team still have ample time to learn, there is, of course, a possibility that the new administration can adapt to circumstances in Southeast Asia specifically, and the Asia Pacific more broadly.

The American Foundations of Regional Architecture

Regional cooperation in Southeast Asia continues to rest on the US-sponsored liberal international order, supplemented by ASEAN and its affiliated mechanisms. Southeast Asian states have experienced significant economic growth since the end of the Second World War and after the Cold War. Underpinning this economic success story is a cycle that ties capital from North America, Europe and Japan, as well as more recently South Korea and Taiwan, to raw materials and production networks across Asia that manufacture for North American and European consumers. Making this possible is a constant lowering of trade and investment barriers driven by a belief in the benefits of enterprise and wealth creation not only for their own sakes, but also as facilitators of social and political stability. Much of Southeast Asia’s prosperity — and indeed challenges with the environment and inequality — over the past seven or so decades come from being key economic nodes in the American-backed liberal international order.

Overseeing this economic order are the US-backed Bretton Woods institutions — the International Monetary Fund (IMF), the World Bank and the World Trade Organisation (WTO) — which maintain the basic governing principles of the world economic system. Given that the US dollar denominates much of the world’s commercial activity, the US Federal Reserve too plays a critical role in the world [End Page 30]economy via its influence over US interest rates. Despite talk of having alternative arrangements and institutions manage the world economy, the Bretton Woods institutions and the US dollar remain irreplaceable for the time being. Regional initiatives such as the Asia Infrastructure Investment Bank (AIIB), Regional Comprehensive Economic Partnership (RCEP), intra- and extra-ASEAN free trade agreements, and even calls for the Chinese yuan to denominate regional trade or even become a reserve currency, operate as part of the liberal economic order and do not provide a substitute. Being integrated in the world economy means that Southeast Asia remains subject to the prevailing international economic order and its ordering principles...

From: Contemporary Southeast Asia: A Journal of International and Strategic Affairs
Volume 39, Number 1, April 2017 
pp. 29-35

Ja Ian Chong