The Biden administration has made no bones about its desire to prioritize the Indo-Pacific region in its grand strategy. The Biden team has tried to reduce the U.S. footprint in areas deemed less vital (Afghanistan, the Middle East more generally) so as to bolster efforts in areas deemed more vital (Europe, the Indo-Pacific).
President Biden’s foreign policy team has also tried to distinguish its approach from the previous administration. Whereas Donald Trump’s approach was to fight friends and rivals alike, Biden has attempted to reaffirm strong ties with allies and partners. This reallocation of diplomatic effort was at the root of the Biden team’s buildup of the Quad and AUKUS.
As security measures go, these are solid moves. But as anyone who has spent any time studying the region will tell you, in the Indo-Pacific, economic policy is foreign policy. The entire region has benefited from China’s rise from impoverished state to consumer and producer behemoth. Talk to regional experts and they will tell you the same thing: The appetite for anything that goes beyond hedging China is minimal. There is no populist blowback to globalization across the Pacific Rim, just an ongoing embrace of commercial diplomacy. For the United States to entice any regional actor to pressure China on issues ranging from human rights to the South China Sea, there has to be economic incentives to do so.
U.S. policymakers are aware of this. In a conversation at the Carnegie Endowment for International Peace, Kurt Campbell, the White House’s point person for the Indo-Pacific, said all the right things about the U.S. outreach to the region. He stressed that any U.S. approach to the Indo-Pacific does not start with China, but with China’s neighbors. He said “we have to have an open, optimistic, engaged approach to commercial interactions, investment in the Indo-Pacific.” He noted Biden’s October 2021 East Asia Summit speech pledging a comprehensive Indo-Pacific Economic Framework.
Sounds great! Except that as Michael Martina and David Brunnstrom of Reuters noted in their write-up of Campbell’s talk, “some Indo-Pacific countries, many of which count China as their largest trading partner, have lamented what they see as lacking U.S. economic engagement, especially after former President Donald Trump backed away from the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) trade deal.” As for the Indo-Pacific Economic Framework, they noted, “few details have emerged and the administration has avoided moves towards rejoining trade deals [that] critics say threaten U.S. jobs.”
And here we arrive at the nub of the problem. The best way for the United States to cement ties with actors in the Indo-Pacific is to go beyond security issues to economic engagement. From the perspective of a garden-variety country within the Association of Southeast Asian Nations, however, which great power looks more enticing:
- The one that has hammered together a regional comprehensive economic partnership, a wide-ranging infrastructure initiative and an application to join the other mega-trade deal in the region, or;
- The one that pulled out of the big regional trade deal it negotiated, sabotaged the world’s largest trade-dispute understanding and has demonstrated little enthusiasm for negotiating any trade agreement that would require congressional approval?
The most frustrating aspect of this is that for all the talk about economic populism in the United States, the polling data shows that Americans are almost as enthusiastic about globalization as the rest of the Pacific Rim. It’s the pivotal voters in swing states that both parties crave that are the skeptics about the open global economy.
In his remarks, Campbell noted, “We have to get the United States right” and show that “democracy can deliver” and “can still be effective.” For the Biden strategy to work, the administration needs to convince actors in the region that the United States is serious about economic engagement. Unless and until that includes talk about merchandise trade and services, however, the Indo-Pacific Economic Framework will be little more than window dressing. No amount of adroit diplomacy can fix that policy gap.