Ash Carter and a U.S. Economic Strategy for Asia

By Ernest Bower

Source: Lublud's flickr photostream, used under a creative commons license.

Source: Lublud’s flickr photostream, used under a creative commons license.

Secretary of Defense Ashton Carter is wheels up for Singapore early next week. He is going to participate in the annual Shangri-la Dialogue, a venue for Asia’s top security officials and those concerned with defense to gather and discuss the most important issues of the day.

Before leaving for his first visit to Northeast Asia last month, Carter made an important speech at Arizona State University, where he talked about understanding the vital link between security in Asia and economics. In that context, he uttered the prophetic line “Passing TPP [the 12-nation Trans-Pacific Partnership trade agreement currently being negotiated] is as important to me as another aircraft carrier.”

Carter is right. As he dons the cap of Asia leader in President Barack Obama’s national security team for the remaining 18 months of the president’s second term, Carter will also need to be persuasive. He actually understated what the United States needs to do to get its economic plans to the right level to support U.S. geopolitical goals across the Indo-Pacific.

The United States needs to articulate and implement a broader economic strategy for Asia, one that encompasses trade, finance, investment, and development. It also needs to include a vision for integrating the region’s economies on a rules-based foundation, a point that would be consistent with the popular position on advancing regional security. A modern U.S. economic strategy for Asia must also encompass plans for all the members of the East Asia Summit (EAS), including the big economies of China and India.

In this context, understanding the Regional Comprehensive Economic Partnership (RCEP) is vital. RCEP’s current economic ambitions are not impressive, but it is most important in its geographical coverage and geopolitical impact. It contains all of ASEAN—the vital core, or meeting point, of Asian economic integration—as well as China and India. It could also develop into the economic architecture of the EAS. The negotiations already include all of EAS members except Russia and the United States.

One could imagine Russia moving quickly to join RCEP once the negotiations among the current 16 members are completed. Unlike Washington, Moscow does not have strict rules about the level of the economic agreements it enters. That would isolate the United States as the only EAS member without participation in ASEAN-based regional economic architecture.

In Asia, security and economics are very closely linked. Yet the United States is playing all in for security, even leading that discussion, but at the same time adopting an anachronistic stance on economics. The United States’ economic engagement in the region is based on an outdated view that the U.S. economy will be the world’s most significant for decades to come. That is not the case any longer, and a new U.S. economic strategy for Asia is required; one that is more practical and clearly reflects the linkage between economic integration and advancing regional security.

RCEP is not very interesting yet in terms of its practical economic ambitions. TPP is likely to be a much higher standard agreement. What the United States should do is participate in both so that it can help RCEP members that are willing and able graduate into the group of nations prepared for more robust economic integration like that offered by TPP. Those nations will have done the math and come to understand that significant and meaningful economic reform and integration will drive investment, development, infrastructure building, jobs, wealth creation, and at its very core, a deeper and enduring security for Asia.

Ash Carter will need to convince the White House to drive hard to complete and pass TPP, a vital first step and core tactic within a modern economic strategy for Asia. But his argument will also need to point out that not participating in RCEP leaves the United States economically isolated in Asia’s integration process. Geopolitically, Washington is clear that the United States believes ASEAN is the “fulcrum” of fast developing Asian economic and security architecture for the twenty-first century. The United States has joined the EAS, yet without full economic engagement, it only has its toe in the water of the most vital thrust for securing Asia for the next 50 years: economic integration.

Mr. Ernest Z. Bower is Senior Adviser and holds the Sumitro Chair for Southeast Asia Studies at CSIS. Follow him on twitter @BowerCSIS.


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