By James Wallar
• In November 2011 the United States joined the East Asia Summit (EAS), taking a seat with the leaders of ASEAN member countries and the other major players in Asia: China, Japan and Korea (ASEAN + 3), Australia, New Zealand, and India (ASEAN +6).
• In 1990 the U.S. share of world GDP was 25%, Asia’s was 20%; in 2010 these had shifted to 24% and 25%, respectively; and by 2030 are likely to be around 17% and 39%.
• The EAS Leaders “underscored” the importance to strengthen cooperation on financial issues to enhance economic cooperation; the White House Fact Sheet issued last year makes no mention of finance or trade.
In sum, the United States took its seat among Asia’s major economic players that will account for an increasingly significant amount of the world’s economic activity and apparently did not engage on important economic issues.
The explanation for not joining in those discussions was that the administration would pursue its economic interests through the Trans Pacific Partnership (TPP) negotiations and APEC. Clearly those are central to the U.S. strategy. Engagement in the EAS, however, could complement that strategy. The EAS presents the U.S. leadership the opportunity to: inform China, India, Japan, and Korea about its TPP strategy, dispel the misimpression that the TPP is an attempt to corner China, promote open, market-driven trade, investment and financial policies, and learn about and potentially influence EAS activities on trade and finance.
Meanwhile, Asia is setting its own course. On trade and investment, Economic Ministers from the original EAS countries (ASEAN + 6) have agreed on principles for negotiating a Regional Comprehensive Economic Partnership (RCEP). Negotiations are expected to be launched at the November ASEAN Summit, without US participation. On finance, EAS Finance Ministers will meet in Tokyo this month. The U.S. Treasury Secretary is not scheduled to attend.
No one can predict with certainty how Asia’s many regional venues or disciplines on trade and investment or collaboration on finance will evolve. Certainly the U.S. government owes it to American businesses as well as its broader geopolitical interests, to participate in and potentially influence discussions among the EAS group of Asia’s trade and finance policy makers. After all, economics is integral to U.S. diplomacy and the “re-balancing” toward Asia. Last year the EAS had presented the U.S. government an opportunity to have its cake and eat it too. Yet the United States missed the moment. This November brings a second chance.
Mr. James Wallar is senior vice president, International Group of Nathan Associates. Wallar previously served with the company as an advisor in the ASEAN Secretariat in Jakarta and before that held various positions in the U.S. Treasury Department.