The EDCA and the Philippines’ External Defense Capability Development

Issues & Insights Vol. 22, SR1, pp. 51-56

Abstract

This research examines how the Enhanced Defense Cooperation Agreement (EDCA) can further improve the Armed Forces of the Philippines’ (AFP) external defense capabilities and improve the defense ties of the United States and the Philippines. A particular area where the EDCA can advance U.S.-Philippine military partnership is improving the AFP’s ability to protect the country from external military threats and adapt or effectively respond to a dynamic geopolitical environment. To be sufficiently up to such tasks, the AFP needs to drastically improve its military assets and materiel that focus on aerospace and maritime capabilities. Article I, section 1, subsection (a) of the EDCA on “Purpose and Scope,” mandates “Supporting the Parties’ shared goal of improving interoperability of the Parties’ forces, and for the Armed Forces of the Philippines (AFP), addressing short-term capabilities gaps, promoting long-term modernization, and helping maintain and develop additional maritime security and maritime domain awareness and humanitarian assistance and disaster relief capabilities.” While the agreement’s goals are set, there are still challenges that need to be addressed between the United States and the Philippines, such as different levels of commitment to the alliance as perceived by the leadership on both sides. This research highlights the importance of the EDCA in improving the Philippines’ external defense capabilities and strengthening U.S.-Philippines defense ties. Two issues will be examined: the challenge of developing AFP’s external defense capabilities and the under-utilization of the EDCA for such purpose.

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About this Volume

Authors of this volume participated in the inaugural U.S.- Philippines Next-Generation Leaders Initiative, sponsored by the U.S. Department of State, through the U.S. Embassy in the Philippines. With backgrounds from academia, public policy, civil society and industry, the cohort brings rich insights on the past, present, and future of the U.S.-Philippines bilateral security relations.

The statements made and views expressed are solely the responsibility of the authors and do not necessarily reflect the views of their respective organizations and affiliations. Pacific Forum’s publications do not necessarily reflect the positions of its staff, donors and sponsors.


Santiago Juditho Emmanuel L. Castillo has an MA degree in International Studies major in Asian Studies from De La Salle University and a BA degree in Philosophy from San Beda University. The focus of his graduate studies is on Japan’s defense/security policies and strategies in light of the changing security situation in the Asia-Pacific. He is also interested in military capability developments and defense diplomacy. He currently works as a Research-Analyst and Executive Assistant for the Philippine government for the past three years. His research specialization and interests are warfare and strategic studies, traditional geopolitical security issues, military technologies, as well as foreign and defense policies of Japan and Russia.


Photo: The Philippine Coast Guard vessel Edsa (SARV 002), left, and the Philippine Navy frigate Gregorio Del Pilar (PF 15) steam in formation during Cooperation Afloat Readiness and Training (CARAT) Philippines 2013. BRP Gregorio del Pilar was a Hamilton-class high endurance cutter of the United States Coast Guard, before it was acquired by the Philippine Navy under the U.S. Excess Defense Articles Program and the Foreign Assistance Act. Source: U.S. Navy photo by Mass Communication Specialist 1st Class Jay C. Pugh / Public Domain. 

Issues & Insights Vol. 22, WP5 — Shifting Supply Chains from China into India as an Effective Grand Strategy in the Indo-Pacific Region

Executive Summary

Between 2016 and 2020, nations of the Quadrilateral Security Dialogue (Quad) became patently aware of the risks posed by an authoritarian state such as China controlling much of global value chains. This realization among leaders of the Quad nations can be attributed to a general rise in populism around the globe—which ignited a debate on globalization—to the COVID-19 pandemic, China’s acts of economic coercion against Australia and aggression against India in the Galwan Valley. To prevent China from weaponizing interdependence, nations of the grouping have launched several supply chain diversification and economic security initiatives such as the Supply Chain Resilience Initiative (SCRI) and Economic Prosperity Network (EPN). While these initiatives are a step in the right direction, a larger reformatory initiative is needed to prevent diversification projects from becoming a flash in the pan. Shifting supply chains out of China and into India has the potential to be that much needed reformative initiative. This exploratory study of the challenges and opportunities associated with shifting supply chains into India tests this hypothesis by examining the domestic political economy in India and the complexities of the US-India relationship.

This study observes major impediments to a supply chain diversification project. One, trade protectionism is a common feature among Indian administrations. India’s diverse political landscape has warranted coalition governments, which has prevented administrations from taking reformative action on liberalizing the economy. Two, the US-India relationship historically had ups and downs. The two democracies even came to the brink of war in 1971, and 20 years later, the US unleashed economic sanctions on India for their nuclear tests. A concerted recalibration of the US-India relationship is required to solidify any form of economic partnership, short of an alliance.

To summarize, the Indian government should continue liberalizing its economy through the land, labor, and corporate governance reforms. The US should adopt a more conciliatory approach to India’s domestic issues to avoid fissures in the relationship. Subsequently, the US, Australia, and Japan will be able to capitalize on the opportunities the Indian economy and the Indo-Pacific economy at large present for supply chain diversification. These opportunities can be capitalized through creating a trade bloc exclusive for the Quad and establishing a wealth fund to fund investments in the wider region.

About the Author

Akhil Ramesh (IND) holds an M.S. in Global Affairs from New York University in New York, a Certificate in Business and Geopolitics from HEC Paris, France and a BBA from Amity University, India. He is currently a resident Lloyd & Lilian Vasey Fellow at the Pacific Forum.

PacNet #13 – What the Indo-Pacific sees in Ukraine

The capitals of the Indo-Pacific are closely watching the invasion of Ukraine. From Tokyo to Taipei, Hanoi to Canberra, and Bangkok to Beijing, Russia’s invasion presents a lucid lesson as to the tactics China could use in any forced re-unification of Taiwan, such as gray zone operations, lawfare, fake news, military might, and posturing.

But the Indo-Pacific faces numerous other areas where a Russian-style takeover with Chinese characteristics could happen. In the East China Sea, the Senkaku Islands face nearly daily incursions and challenges to Japanese sovereignty through lawfare tactics such as adoption of a Chinese Coast Guard Law in January 2021.

According to Lyle Goldstein, the Taiwan Strait remains ripe for invasion and in the South China Sea the Philippines has experienced Chinese swarming gray zone operations such as the April 2021 Whitsun Reef incident, as well as Chinaexplicitly rejecting the Permanent Court of Arbitration 2016 decisions against China’s claims. Today, China holds a set of artificial islands it has militarized, supposedly as an outpost for the delivery of emergency aid and humanitarian aid to Southeast Asian friends.

What the Indo-Pacific sees

Three concerns have emerged from Russia’s invasion. The first has to do with US security guarantees at the bilateral level. After the hasty withdrawal from Afghanistan, concerns have resurfaced as to whether the United States will come to the aid of Japan over the Senkaku Islands or Taiwan in the event Beijing seeks to unify it with the mainland.

Similarly, in the South China Sea critical sea lanes of communication, the major arteries of trade and import/export of energy are potentially at risk if China decides to engage in a forced acquisition of these territories.

Stakeholders in the region worry that a Russian-style contingency in the East China Sea, South China Sea, or Taiwan Strait would fundamentally collapse the regional security architecture, placing invaluable sea lines of communication and the First and Second Island Chain in the hands of authoritarian China, a regime with an established track record of economic coercion and weaponization of supply chains.

The second area of concern for Indo-Pacific stakeholders is the response of the United States and the international community. Stakeholders closely observe the tools that will be applied to penalize, discipline, and push back against Russia’s expansionism.

They should appreciate that the European Union has taken a collective stance including the EU’s first batch of Russia sanctions targeting 351 lawmakers, high-ranking officials, and banks. Germany has taken forceful actions by putting Nord Stream 2 on hold, and the United States has coalesced and strengthened NATO unity in the face of Russia’s belligerence. This includes comprehensive and collective sanctions such as “sweeping financial sanctions and stringent export controls that will have profound impact on Russia’s economy, financial system, and access to cutting-edge technology.”

The question for many Indo-Pacific states is: Will this be sustained? Will it be escalated, and will deterrence capabilities be deployed to prevent further expansion of Russian influence into Eastern Europe? And, perhaps most importantly, will this pay dividends?

This is critical for Tokyo, Taipei, Canberra, and Southeast Asian countries. They view enhanced deterrence capabilities as essential for pushing back against aggressive Chinese behavior in their region. This includes deterrence systems to “prevent low-intensity crisis scenarios like the landing of Chinese fishing crews or maritime law-enforcement officials on the Senkaku Islands,” according to Iwama Yoko and Murano Masashi.

In Japan’s case, Iwama and Murano also stresses the importance of enhancing the “MSDF’s capabilities to swiftly negate any Chinese efforts at escalation, thereby underpinning its national capability to handle situations arising in the gray zone.”

The logic of Indo-Pacific stakeholders is that anything less than substantial investment in deterrence and costly punitive measures against the Putin regime would result in Beijing drawing false conclusions about the resolve of the United States and its allies, and thus an end to the US Indo-Pacific Strategy.

The hope for capitals in the Indo-Pacific is that a robust defence of Ukraine will not distract the United States from sustained engagement at all levels in the region. In addition, they hope that confronting Russia will mean that the United States and its allies can draw lessons from Russia’s invasion, including the need to maximize deterrence capabilities within the Indo-Pacific. Ideally this will be integrated with economic sanctions as well as a blocking of potential aggressors’ ability to use the financial system and sea lanes of communications freely—key elements to maintain China’s economic prosperity.

Third, and relatedly, capitals in this region will watch for a shift of resources away from the Indo-Pacific and towards Ukraine. The Biden administration has been adamant that it will not intervene militarily in the conflict (notwithstanding the at least 7,000 troops that have been sent to “ reassure skittish NATO allies in Eastern Europe”). Capitals within this region will look at the investments NATO and the United States place in Poland, Hungary, and other countries vulnerable to Russian incursions or tactics including the weaponization of refugees.

They will be also look for a concrete example of resources directed at the Indo-Pacific. This includes a United States Indo-Pacific Economic Framework that not only competes with Chinese initiatives but offers new initiatives and frameworks for integrating the region. That includes inculcating a rules-based order, transparency, and good governance in the region to deal with emerging regional challenges.

What to expect

While Indo-Pacific capitals are concerned about the US position in the region, some like Japan will not wait for the United States to respond while others will vacillate in silence. They will likely begin their own bilateral and multilateral initiatives to strengthen deterrence capabilities. This will include more proactive cooperation in the Quadrilateral Security Dialogue (“Quad”) at many of the contested areas within the Indo-Pacific.

This proactive diplomacy will not only translate into Quad partners providing for their own maritime security but also into bringing in other partners into a Quad-plus formation to ensure that the Quad remains a nimble institution that can deal with ad-hoc regional problems.

AUKUS-based deterrence capabilities will likely accelerate within the region. Many Indo-Pacific stakeholders will welcome this. We are also likely to see contingency strategies to deal with challenges across the Taiwan Strait as well as South China Sea and the East China Sea. Tokyo has been at the forefront of this shift, articulating Japan’s security concerns over Taiwan, and with former Prime Minister Abe Shinzo stressing that a Taiwan security dilemma is a Japan security dilemma.

Indo-Pacific stakeholders, including China, will look at the failures and successes of Russia, but also the United States and its allies. China will look for cracks in the US-NATO armor, seeking leverage to pursue its geopolitical objectives across the Taiwan Strait and East and South China Seas. They will look for weaknesses in the Biden administration and commitment to sanctions, including removing Russia from the SWIFT system, which will have economic implications for the United States and the partners. One consequence, for instance, could be the acceleration of China’s attempts to adopt a digital currency to deploy throughout the Belt and Road Initiative (BRI) network of countries and potentially insulate China from future sanctions.

Indo-Pacific stakeholders will also look to the strategies that the European Union and the United States develop to deal with the energy shortages and increases in energy prices as Russia will likely weaponize energy resources to pressure EU countries to step back from sanctions.

Working together, Canada and the United States may provide some energy relief in the short to mid-term, until the European Union further diversifies away from Russia as its primary energy supplier.

Russia’s invasion of Ukraine is the canary in the coal mine for many Indo-Pacific stakeholders. A forceful, collective, and effective response to Russia’s belligerence would do much to accrue the confidence of the United States allies and partners in the Indo-Pacific.

Dr. Stephen Nagy is a senior associate professor at the International Christian University in Tokyo, a fellow at the Canadian Global Affairs Institute (CGAI); a senior fellow at the MacDonald Laurier Institute (MLI); a senior fellow at the East Asia Security Centre (EASC); and a visiting fellow with the Japan Institute for International Affairs (JIIA). Twitter handle: @nagystephen1.

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Photo: A Chinese Coast Guard ship seen near the Senkaku Islands in February. Source: Hitoshi Nakaima/Kyodo

PacNet #12 – Ukraine: China’s Latest Strategic Blunder

For more from this author, visit his recent chapter of Comparative Connections.

Despite its self-proclaimed status as a defender of state sovereignty and the principle of non-interference in the internal affairs of others, China has found itself unable to criticize its close strategic partner Russia over its “military operation”—Beijing won’t even refer to it as an invasion—of Ukraine, blaming instead (surprise, surprise) the United States for forcing Moscow to defend itself from the mere prospect of Ukraine possibly one day joining NATO. The best it would do is abstain at the UN Security Council while calling on “all sides” to exercise restraint.

China’s position has some short-term advantages. As the rest of the world refuses to buy Russian oil, gas, or wheat, China will shamelessly step in to keep the Russian economy from collapse by buying these commodities, no doubt at a reduced price. As Moscow becomes more and more dependent on China’s assistance, it’s real status as the junior partner in the Sino-Russian relationship will be further confirmed and solidified. Russia will join the club of third world countries who have become increasingly indebted to Beijing and thus more willing (if not compelled) to do its bidding.

Putin’s recent speeches have made it abundantly clear that his real motivation in invading Ukraine—which he has called a fake country—is the rebuilding of the historic Russian empire. Like Peter the Great, Catherine the Great, and Stalin (the not-so-great) before him, he sees the Ukrainian breadbasket as rightfully belonging to Russia, and he means to take it back. But Chinese leader Xi Jinping would do well to look at the maps of the former empires. Ukraine was not the only area they had in common; so too is the whole of Central Asia, Russia’s so-called “near abroad.” Like Ukraine, there are many Russian-speaking citizens in the former Union of Soviet Socialist Republics who could one day be called upon to declare independence within the individual post-Cold War republics and call on Mother Russia for help, as the separatists in the breakaway regions of Donetsk and Luhansk in eastern Ukraine did to “justify” Putin’s intervention there.

The country with the most to lose in this scenario is China, whose growing influence throughout Central Asia must be seen by Putin as a threat that must be tolerated today but eventually redressed. One can only imagine how much it upsets the Russian leader that the organization through which both Beijing and Moscow extend their influence in Central Asia is named after a city on China—the Shanghai Cooperation Organization—rather than a Russian one, given Moscow’s historic reign over this entire region. The “Great Game” of the 21st Century may still end up pitting Moscow against Beijing in a region historically seen as Moscow’s soft underbelly. China’s silence, if not tacit support for Moscow’s effort to reestablish the western boundaries of Russia’s former empire will eventually come back to haunt Beijing when Putin the Great eventually (and I would argue inevitably) turns his attention southward.

Meanwhile, pundits are spilling a lot of ink speculating on how the Russian invasion of Ukraine will lead to or somehow justify or make inevitable a Chinese invasion of Taiwan. They overlook the significant differences between the two, including 90 miles of ocean and a “rock solid” US commitment to help Taiwan defend itself in a form and manner yet to be determined. Putin was able to factor out a US/NATO military response in planning his invasion; Xi will need to factor the US (and perhaps its Asian allies) in. While Washington continues to maintain its policy of “strategic ambiguity” as to whether or not it would respond militarily to a Chinese invasion of Taiwan, it has become significantly less ambiguous about its support for Taiwan democracy in the wake of China’s heavy-handed pressure tactics toward Taiwan and its blatant violation of the Sino-UK Joint Declaration that was supposed to assure basic freedoms in Hong Kong for 50 years following the 1997 turnover of the former UK colony to the Mainland—two earlier strategic blunders by Xi.

This is not to say that how Washington and the rest of the free world responds to the Ukraine invasion won’t be noticed in Beijing. One of the (should be intended) consequences of the concerted effort to inflict a heavy economic cost on Russia for its adventurism should be a strong message to China that it could expect the same if it were ever to invade Taiwan. Beijing also needs to understand that, if the situation is reversed, Russia is unlikely to be able to return the favor and bail China out.

Putin’s narrative should also be sobering to Beijing. It began with a group of separatists—do we dare call them “splittists”—(this time in Donetsk and Luhansk) declaring independence. A major power (in this case, Russian) then recognized these newly independent states and decided to militarily intervene to defend them. Is this the type of precedent Xi Jinping really wants to support?

PacNet commentaries and responses represent the views of the respective authors. Alternative viewpoints are always welcomed and encouraged. Click here to request a PacNet subscription.

Image: Russian President Vladimir Putin attends a meeting with Chinese President Xi Jinping in Beijing, China, on February 4, 2022. Source: Sputnik/Aleksey Druzhinin/Kremlin via Reuters

PacNet #10 – Is the US capable of shaping a rules-based international order?

An earlier version of this article was published in The Hill.

It is repeated endlessly: US foreign policy is about defending the “rules-based order.” That’s a codeword for the challenge from China, which is trying to rewrite the rules. Fine. But if the US can’t even design its own rules on, for example, the urgent issue of digital privacy or regulating Big Tech, how can it play on that larger stage?

No question, the wisdom that created the Bretton Woods system (the International Monetary Fund, World Bank, World Trade Organization, etc.) was based on well-conceived rules that were mutually beneficial. Relatively open trade and finance generated unprecedented wealth and power over the past 70 years. But as the rise of China demonstrates, the United States must now grapple with the dilemmas of its success. It is an increasingly multipolar world.

And it is not just about China. The European Union, with a very different approach to trade and tech rules than the United States, sees itself as the superpower of regulation, trying to leverage its $15 trillion economy and 516 million consumers to create global standards. Its General Data Protection Regulation (GDPR) has forced Big Tech to respect its privacy standards or face billion-dollar penalties. While the United States still lacks federal standards, several states, most notably California, have laws like GDPR.

More recently, the European Union is legislating a Digital Marketing Agreement (DMA) aimed mostly at US Big Tech to level the playing field for all digital companies. It is also launching a Digital Services Agreement (DSA) to regulate responsibilities of digital services to consumers in the European Union, and a new initiative to influence setting standards in emerging tech.

Why does this matter? We are in the midst of an unprecedented technology revolution (e.g. artificial intelligence, robotics, 5G, 3D printing, synthetic biology), and innovation will be the key driver of economic growth in the decades ahead. All aspects of our economy and lives are increasingly digitized. The Federal Reserve is even considering a digital dollar. Data and its cross-border flows have become the lifeblood of world trade.

The World Bank estimates that the digital economy is already 15.5% of global GDP. E-commerce hit $25.6 trillion in 2018. This trend was accelerated by COVID-19: From Zoom to telemedicine, digital services are rapidly growing in importance. The United States typically runs a massive trade deficit in goods but large surpluses in services—$290 billion in 2019. Combine that with US status as a leading global innovator in information and communications technology, and the United States may be well positioned to thrive in the digital universe.

That’s where the rules and standards, still wanting for new tech, come in. They will shape markets and facilitate growth and jobs. Yet, for all the public outrage at Big Tech, a deeply polarized Congress has so far failed to pass federal privacy or substantive anti-trust legislation. Not for want of trying: Over the past several years, there have been dozens of tech bills offered. But only a handful get very far in the dance of legislation.

Even bills that have strong bipartisan support have stumbled. Versions of the $250 billion America COMPETES legislation foundered over the past two years. The bill would boost high-end semiconductor manufacturing in the United States as well as tech research and development. Finally, last June, it passed the Senate with a solid bipartisan vote (68-32). The House haggled over it for months, attaching dozens of amendments, and finally passing it last week. Reconciling the different bills will drag the dance out to spring. This is not an inspiring way to compete with China.

package of anti-trust bills that would make it harder for Big Tech to buy or merge with smaller firms and level the playing field on apps passed House committees last year. But differences within and between the two political parties make it problematic for any to reach President Biden’s desk this year. And with Republicans projected to take the House in November, many assess that if anti-trust bills don’t pass this year, it will become more difficult to do so in the future.

Similarly with international technical standards in global standard-setting bodies like the International Telecommunications Union (ITU). China aggressively floods the zone with its own representatives, while Washington lags in mobilizing private sector stakeholders and US allies to push back against efforts to shape standards to Beijing’s preferences.

The picture is even more troubling regarding trade rules. As Europe and Asia sign a plethora of trade agreements, the United States has taken itself out of the game. In part because of a backlash to job losses to China earlier this century, both political parties are averse to the United States advancing new market-access accords and leaning in a protectionist direction.

Both the Bush and Obama administrations launched and negotiated the Trans-Pacific Partnership (TPP) accord, a 12-nation pact that would have covered 40% of the world economy. The idea was to fashion a high-standards regional agreement to gain leverage to write the rules and press China to reform or lose markets. China is the number one trade partner of all US Indo-Pacific allies and partners.

But President Trump withdrew from TPP during his first week in office. Japan carried the accord forward, and, ironically, now China has applied to join. In addition, the Regional Comprehensive Economic Partnership (RCEP) signed by 15 Asian nations—including US Asian allies—went into effect last month. The United States remains the outlier.

Some in the administration are trying to fashion a region-wide digital commerce accord, in effect regionalizing high-standards accords the United States already has in the United States-Mexico-Canada Agreement (USMCA) and US-Japan bilateral accord. But that effort has been blocked by divisions within the bureaucracy.

All told, unforced errors have put the United States in an awkward position to shape the rules-based order it seeks. One hopeful sign, however, is the recently formed US-EU Trade and Technology Council. It is an effort to coordinate positions on things such as WTO reform and emerging technologies like 5G and AI. To the extent that the United States and European Union can harmonize their positions, they will gain leverage with China to shape norms.

The situation is less than reassuring. But as tech legislation creeps its way through Congress and the United States and European Union intensify efforts to find policy consensus, I am reminded of the sardonic quip attributed to Winston Churchill that Americans can always be counted on do the right thing—after exhausting all other possibilities.

Robert A. Manning (rmanning@atlanticcouncil.org) is a senior fellow of the Scowcroft Center for Strategy and Security at the Atlantic Council. He was Director of Asian Studies at the Council of Foreign Relations (1997-2001), a senior counselor to the under-secretary of State for Global Affairs from 2001 to 2004, a member of the US Department of State Policy Planning Staff from 2004 to 2008 and on the National Intelligence Council (NIC) Strategic Futures Group from 2008 to 2012. Follow him on Twitter @Rmanning4.  

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PacNet #9 – Biden struggles as China advances in Southeast Asia

The Joseph Biden administration’s priority to compete more vigorously with China in Southeast Asia features strong efforts but widely publicized shortcomings. The latter consist of insufficient attention because of higher priorities, economic programs competing poorly with China-led trade and infrastructure initiatives, and lagging official postings dealing with Southeast Asia. What gets less attention are Beijing’s remarkable efforts to advance regional leadership over the past year, using a wide range of persuasive and coercive measures that overshadow US initiatives and curtail ASEAN members cooperating with the United States in ways Beijing opposes. Chinese efforts and the resulting Southeast Asian reluctance to cooperate with the United States are the most important obstacles in struggling Biden government efforts to outcompete China in the region.

Chinese advances overshadow US initiatives

China’s success in spreading influence in Southeast Asia since the 2020 US election is one of the most remarkable advances Beijing has made in countering the United States in the Indo-Pacific over the past decade. Keenly attentive to Biden’s proposed efforts to compete more effectively with China in Southeast Asia—and elsewhere in the Indo-Pacific—Beijing has relied on ever-expanding Chinese influence in Southeast Asia to eclipse and offset US initiatives. For more than a year, Chinese officials and media have devoted more attention to Southeast Asia than any other foreign policy topic apart from relations with the United States. President Xi Jinping closely identified with the efforts in Southeast Asia, weighing in with authoritative initiatives; Foreign Minister Wang Yi has been peripatetic throughout the region. Beijing has used a combination of impressive positive incentives and coercive mechanisms to impose its will in the region, thereby sidelining the United States.

In particular:

  • Beijing took advantage of former President Donald Trump’s absence from East Asian Summit and APEC  leaders meetings in November 2020 to conclude an agreement on the Regional Comprehensive Economic Partnership (RCEP), excluding the United States; and to highlight Xi’ Jinping’s initiative to join the other major regional trade agreement, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which the United States rebuffed.
  • Wang Yi visited leaders in nine Southeast Asian countries from October 2020-January 2021 and then held in-person meetings in China in April with four regional foreign ministers.
  • Secretary of States Antony Blinken’s failed video conference with ASEAN counterparts in late May contrasted sharply with Wang’s successful two days of in-person meetings with the ASEAN foreign ministers in China in early June.

China-ASEAN relations have prospered. For example:

  • ASEAN-China trade grew 20% and approached $800 billion in 2021 and the opening of the $6 billion Chinese highspeed railway in Laos underlined Chinese widespread infrastructure investment in ASEAN.
  • China was the leading source of medical supplies and vaccines for Southeast Asian countries.
  • China used its control of headwaters of rivers important to Southeast Asian development, providing unique leverage on down-river countries.
  • It sustained good relations with the Myanmar junta and ASEAN, putting Beijing in a much better position than the United States to deal with the crisis.
  • The Chinese military, coast guard, and maritime militia ably controlled and advanced China’s enormous claim to most of the South China Sea against weak Southeast Asian claimants.

Beijing’s less overt but common means of influence were:

  • efforts influencing Chinese diasporas in Southeast Asia;
  • leveraging Chinese-provided transportation, communication, and other infrastructure to compel recipients’ deference to Chinese requirements;
  • routinely accommodating corrupt regional leaders in economic agreements, winning their support;
  • fostering China’s state penetration of local media, gaining positive publicity; and
  • leveraging Chinese tourists dominating this regional industry to advance Chinese ambitions.

Against this background, ASEAN and most Southeast Asian states remained publicly silent in the face of Chinese expansionism in the South China Sea. Southeast Asian governments followed a broader pattern avoiding criticism of an ever-widening range of Chinese policies, knowing that doing so would prompt Chinese punishment. In contrast, Southeast Asian officials freely criticized US policies and practices.

Wrapping up advances in 2021, Xi Jinping hosted a summit to commemorate the 30th anniversary of ASEAN-China dialogue on Nov. 22. He announced that China-ASEAN relations were elevated from a strategic partnership to a comprehensive strategic partnership, which meant more security cooperation along with deep economic and diplomatic cooperation. The China-ASEAN Free Trade Agreement will also be upgraded. China will donate 150 million doses of COVID vaccine to ASEAN members and pledged an additional $1.5 billion in development assistance over the next three years.

China had already provided ASEAN with 360 million doses of the COVID vaccine (versus the US count of 60 million by December 2021). China-ASEAN trade reached $684 billion in value in 2020 and reached $703 billion in the first 10 months of 2021, representing a growth of 20 percent. (US-ASEAN trade was $308 billion in 2020).

Significantly, Philippine President Rodrigo Duterte offered a rare public rebuke of Chinese coercion in the South China Sea. Xi, however, ignored Duterte’s intervention and with seeming confidence in China’s control of the overall situation emphasized the mendacious claim that China will “never seek hegemony, still less bully smaller countries.”

Meanwhile, Chinese hard tactics advanced in the South China Sea. The Chinese Coast Guard and Maritime Militia undermined Philippines control of its claimed waters. Indonesia reportedly was warned against undertaking gas and oil development in areas claimed by China and a Chinese survey vessel spent seven weeks conducting seabed mapping inside Indonesia’s Exclusive Economic Zone (EEZ). Malaysia’s developing oil and gas in its EEZ, also claimed by China, were regularly harassed by Chinese Coast Guard ships. In October, Malaysia protested a Chinese survey vessel operating in the Malaysian zone.

Outlook

China resolutely employs blandishments and coercion in Southeast Asia. The Biden administration lags behind, still working on developing elements of a recently announced Indo-Pacific Strategy that deals with the shift, over the past five years, from a policy in Asia premised on sustained constructive engagement with China to a policy based on acute competition with China. The unilateral and often erratic measures of the Trump administration accelerated US relative decline in Southeast Asia. The Biden government emphasizes enduring strong rivalry with China and reassurance of allies and partners against the unilateral and unpredictable America first policies of the Trump government. However, the possibility of a return of Donald Trump to the White House (or the election of a Trumpist) suggests that US reliability cannot be taken for granted.

For now, the Biden administration seems determined to advance relations with Southeast Asia in areas those governments believe will not upset Beijing. The pace and intensity of US efforts will no doubt depend on numerous developments in the world. Reflecting a more fundamental obstacle to US ambitions, Beijing is effective in countering American initiatives, while persuading or cowing regional interest in cooperating more closely with the United States in ways opposed by China.

Robert Sutter (sutterr@gwu.edu) is professor of practice of international affairs, George Washington University, USA. His most recent book is US-China Relations: Perilous Past, Uncertain Present (fourth edition) Rowman & Littlefield 2022. For more from this author, visit his recent chapter of Comparative Connections.

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PacNet #7 — China’s growing confidence in drone warfare

After a decade of extensive research and development, China has begun demonstrating growing confidence in drones’ manufacture—and their use in warfare.

Although many militaries around the world use drones in military operations, none integrate them in such a comprehensive a manner as the People’s Liberation Army (PLA). While US military operations in Afghanistan and Pakistan limited drone use to specific targets and individuals, the PLA, particularly its air force and navy, considers drones to be as important as any other offensive combat system. It does not see drones as mere auxiliaries, but a crucial combat component to compensate for some of its weakness.

For example, even though China has begun deploying modern combat carriers such as the J-20 stealth fighter and nuclear-armed submarines, it does so in relatively small amounts, and many believe its capabilities remain inferior to the United States’. To compensate, the PLA has adopted an asymmetric strategy. Thousands of missiles are deployed near the coast of Taiwan that can strike US aircraft carrier battle groups and reach US military bases as far as Guam. Drones complement the strategy of missile strikes in combination with modern fighter jets, submarines, and surface ships operating closer to China’s coast, which would be deadly for American forces.

Chinese sources report that a twin-seat version of the J-20 is under development. The extra pilot will allow the aircraft to perform more tasks, including operating several air drones which could be used for recognizing and partaking in attack missions, providing a protective barrier to the J-20 and improving its odds against superior American fighters. The Chinese air force’s most ambitious project is the “flying aircraft carrier,” a mother ship air drone that would carry several drones to be used in swarm attacks against enemy aircraft and air defense systems. Airshow China 2021 displayed the GJ-11 stealth air drone, designed for reconnaissance and attack missions in heavily defended air space. The GJ-11 is the most advanced drone of its kind; more advanced than anything the United States currently has in its inventory.

The Chinese air force is not merely relying on state-of-the-art drones. It is also converting obsolete fighter jets such as the J-7 into drones. Some analysts have speculated that these conversions have been used for incursions into Taiwan’s Air Identification Zone. Though no match for Taiwan’s modern fighters, when used in large numbers and mixed with modern fighters, they can confuse an opponent’s air defenses.

The PLA Navy (PLAN), just like the US Navy, believes that the odds of war between China and the United States will increase in the coming years and that naval warfare will be crucial. To counter US aircraft carriers, nuclear-armed submarines, and modern fighters, the PLAN is also investing heavily in drones. In July, one source reported that China was testing a “cross medium UAV,” a drone that can operate both underwater and in the air. The United States operates such drones, but those developed by China are far more sophisticated.

China’s Yunzhou Tech is developing a drone ship carrying six smaller water drones to attack the surface of enemy ships. The six-armed drones are to work in a coordinated manner to surround and proceed with its offensive operations. The growing sophistication of Chinese technology suggests that these ship drones will become more powerful and carry greater numbers of smaller attack drones. Chinese scientists have also developed a shark-shaped drone to attack submarines. In December 2020, for instance, an Indonesian fisherman found a Chinese underwater drone off the coast of South Sulawesi, close to northern Australia.

In September, several media reports claimed that China successfully landed a hypersonic drone. If such reports are accurate, China will be the first nation to achieve such prowess, placing it ahead of the United States in both drone and hypersonic technology.

If a conflict were to break out with the US Navy over Taiwan, the PLAN has no intention of fighting the United States in an open conventional naval battle, like the Battle of Midway. US forces will have to come closer to China’s coast, where the PLAN and PLA Air Force (PLAAF) enjoy the advantages of proximity to their logistic base and the protection of its missile umbrella. That means reaching Taiwan will be a difficult and bloody operation for the United States.

The US military has the upper hand in many areas, such as aircraft carriers, stealth fighters, nuclear-armed submarines, and satellites. However—and such a possibility is by no means certain—if China were to acquire the lead in hypersonic missiles, hypersonic and stealth attack drones, cruise and ballistic missiles, and cyber warfare, it is no longer clear that the balance of power favors the United States.

What’s clear is that the PLA believes that drones are the future of modern warfare, which is why it has embraced it. The United States would be well-advised to invest more in drone technology and the means to counter it.

Loro Horta (embajadorlorohorta@gmail.com) is an academic and diplomat from Timor Leste. The views expressed here are strictly his own.

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PacNet #6 What happens in Ukraine will not stay in Ukraine

Russia’s recent ultimatum to both the United States and North Atlantic Treaty Organization (NATO) on Ukraine and European security could set a dangerous precedent, with effects that reach far beyond Europe.

The ultimatum, issued in two draft agreements (one between Russia and the United States, one between Russia and NATO) follows an unprecedented Russian military buildup along the Ukrainian-Russian border. In them, Moscow demands US and NATO guarantees that Ukraine and Georgia will never join NATO.

Moscow wants to resolve an issue, pertaining to European security, by concluding an agreement with the United States, without Europeans and other powers in the room. This mentality is reminiscent of the Cold War, when global affairs were managed by just two countries: the United States and the Soviet Union.

The world has changed, however. Today, we live in a globalized, interconnected world, and what happens in Europe will not stay there. There can no longer be just “European” security. For instance, some 40% of European trade traffic transits through the South China Sea, and cross-Strait relations have direct implications for the economic security of the United States and Europe, as well as Japan and the Republic of Korea.

What’s more, the world is connected by vast networks of underwater communication cables serving as the nerves and blood vessels of the digital age-world economy. There is also a net of free trade agreements, logistic highways, and energy supply routes going beyond the oceans and the continents.

Significantly, more than half of the world’s nuclear powers are in the Indo-Pacific. Security concerns include the long list of territorial claims between states in the Indo-Pacific, not to mention the regular testing of ballistic missiles in this region.

So, how can security issues in Europe be addressed in isolation of developments in Asia?

If Russia gets its way, and the United States and its partners honor Moscow’s demands, there will be consequences for the Indo-Pacific security environment that the United States and its regional partners have been busy reshaping. The Quad, AUKUS, and recent bilateral agreements between Japan and Australia exemplify these efforts. Strengthened US security guarantees to several key states in the region serve as a backbone of regional security.

So, if Moscow is serious about obtaining security guarantees, then the scope and format of negotiations must be extended. At minimum, the countries of the G7, plus Russia, China, India, and Australia should be involved in such talks; these countries, after all, cover 70% of the world’s GDP and half of its population. All cards should be on a table, including territorial claims, maritime issues, and the security of logistic networks and communication lanes. This may be ambitious, but the time is right to shape a new world order. A good first step would be to compare notes; no disease can be cured without proper diagnosis.

Until then, there must be agreement that Russia’s demand—that European security be decided on a purely bilateral basis—is unacceptable.

Accepting this would signal that countries can get away with blackmail, intimidation, and even force to achieve their goals. China would likely be emboldened to proceed with its own goals—and not just vis-a-vis Taiwan, but also in the East and South China Seas.

The nations of the world, therefore, must unite and reject the idea that major powers are entitled to spheres of influence. No major power should have the right to rule over smaller states they deem to be in “their” sphere. While we in Ukraine busily study possible routes of Russian invasion, major powers should realize that the real distinction should be between states which want to live in peace and those which seek illegal advantages over others in their neighborhood. Rules should matter more than power.

Neither of the two biggest knots of tension in world politics—Ukraine and Taiwan—should be resolved by force, and if they are, expect the international order to change significantly as it would open the floodgates to more aggressive actions.

Dr. Sergiy Korsunsky is the Ambassador of Ukraine to Japan.

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PacNet #3 Abe was key to the Indo-Pacific’s evolution

This is a transitional moment for the Indo-Pacific. Regional governments are forging new security relationships—the Japan-Australia partnership is the leading edge, as various European governments jostle for inclusion—and new institutions are emerging—from AUKUS to the Quad in the security sphere and at the same time, economic configurations include CPTPP and RCEP.

How did we get here? There are several explanations. Realists insist that rising powers create instability, triggered either by their ambition or the hegemon’s insecurity. For others, the unraveling of the architecture of coexistence, in which China provided markets and the US provided security, was the problem. To my mind, there are still more basic explanations.

First, you need a threat, a source of instability big enough to motivate states to act. With all due respect to John Mearsheimer, China doesn’t fit the bill—at least, not until recently. China has been rising for decades and while that created concern, there wasn’t concerted action to balance against it until Xi Jinping took power. He inherited a powerhouse economy and a modernizing military and married them to ambition and vision—a Belt and Road Initiative that girdled the globe—to pursue the China dream. His ascension and his muscular foreign policy unnerved governments worldwide. If the dream belonged to the nation, it is Xi who acted to make it real: The elimination of rivals, the consolidation of power, and efforts to entrench himself in office make plain that he is a singular world-historical individual who drives decision making in Beijing.

That security threat has been magnified by perceived unreliability on the United States. It’s tempting to blame Donald Trump for this. He created considerable unease with his disdain for alliances, contempt for multilateralism, and narrowly defined view of US national interests, but concern predates his administration. The US refusal to ratify the Trans-Pacific Partnership, a strategic agreement masquerading as a trade deal that Washington was instrumental in negotiating, is the most glaring example, and that was President Obama’s fault. The failure to ensure that China honored the purported agreement to withdraw its forces from Scarborough Shoal was another blow to US credibility.

Trump’s mercurial and transactional approach to policy crystalized fears and left allies and partners wondering what might be next. While the worst predictions did not come true, the damage was done. Governments around the region know that even if Trump departed, Trumpism remains, and his foreign policy mindset could reassert itself in Washington even if he did not return to power.

More alarming, though, is a realization that a “mainstream,” traditionally minded president like Joe Biden can still unsettle the status quo. The withdrawal from Afghanistan rattled even those allies who approved of the decision but were alarmed by the incompetence of its execution and the lack of consultation. The persistence of Trump’s thinking about economic security, manifest most plainly in tariffs that remain in place against allies, is another source of concern. Other moves, such as the abrupt cancellation of the France-Australian submarine agreement and the substitution of a UK-US deal, reinforce a belief that Washington’s field of vision is narrowing and that allies and partners play increasingly bit roles.

A third factor that shaped the region’s evolution was the tenure of Japanese Prime Minister Abe Shinzo. His was one of the most remarkable second acts in world politics. After a brutal failure during his first term as prime minister, he returned to the Kantei for a period of stability, energy, and creativity unrivaled in Japan’s modern history.

The fact that Abe stayed in office as long as he did—he claimed the record for the longest-serving PM in the country’s history—transformed perceptions of Japan. His determination to modernize the country’s national security bureaucracy and subsequent commitment to using that power and purpose to support a wobbling regional order yielded institutions—the CPTPP and the Quad, to name but two—pillars of the emerging architecture.

A fourth and final key factor is a conceptual framework, the Indo-Pacific. Abe championed this concept, but it deserves recognition on its own. While the idea of an Indo-Pacific strategic space had been employed by US Pacific Command combatant commanders from the late 1980s, Abe elevated that idea to a guiding principle in his 2007 speech to the Indian Parliament in which he spoke of “the confluence of two seas.” Obama’s “rebalance” incorporated the concept, but it didn’t assume prominence until the Trump administration adopted the framework in 2017.

The Indo-Pacific is a curious geographical space. China is physically in the middle, but it’s bracketed between two democratic powers. The inclusion of India as a geopolitical counterweight to China is one of the most obvious intentions of its proponents. More important, that Indo-Pacific frame is a predominately maritime domain and links the strategic space to the trade routes that run through its heart. In addition, the inclusion of the Indian Ocean invites European countries with an African presence to be engaged. These considerations expand the number of countries that can claim an interest in events within that region. It is thus an inherently inclusive framework, which allows more countries to participate in regional security affairs.

The key variable appears to have been Abe—which means that our current moment may well result from considerable luck. Abe was a break with history, and Japan appears to be resorting to kind. His successor was in office for just a year. His successor, Kishida Fumio, is popular, but he is a traditional Japanese politician who mediates among factions and plays down his own opinions. There is mounting evidence that the Japanese public is increasingly inward-focused, cautious, and risk-averse. It can be led, but Kishida will have to have vision, charisma, competence, and luck, especially given the challenging circumstances—COVID, China, and a distracted ally.

Still, trajectories have been set, and that will allow bureaucracies to follow through. Headwinds will grow, but there is enough momentum and energy to believe that a genuine regional security architecture will emerge.

Brad Glosserman (brad@pacforum.org) is deputy director of and visiting professor at the Center for Rule-Making Strategies at Tama University as well as senior adviser (nonresident) at Pacific Forum. He is the author of “Peak Japan: The End of Great Ambitions” (Georgetown University Press, 2019).

PacNet commentaries and responses represent the views of the respective authors. Alternative viewpoints are always welcomed and encouraged. Click here to request a PacNet subscription.

PacNet #2 Balancing accessibility and quality in Blue Dot Network infrastructure finance

An earlier version of this article appeared in East Asia Forum.

While US-led Bretton Woods Institutions have supported infrastructure projects since the 1940s, there has been criticism in recent years that the United States has been inadequate in responding to China’s Belt and Road Initiative (BRI). The Biden administration should utilize the Blue Dot Network (BDN) to incentivize private investments in sustainable infrastructure projects in conjunction with the existing Bretton Woods Institutions.

By striking the right balance between accessibility and quality, the BDN would create a unique opportunity to narrow the infrastructure gap while also responding strategically to the BRI through coalition building.

In November 2019, Australia, Japan, and the United States launched the BDN, a voluntary program aiming to certify infrastructure projects that would meet high standards of transparency, sustainability, and developmental impact to help countries pursue quality infrastructure investments. Given that there is currently no certification process to assess quality infrastructure projects, the BDN could also be used by the Bretton Woods Institutions to evaluate existing projects, including those under the BRI.

The BDN is seen as a way to provide project finance alternatives to China’s BRI. One of the major differences often highlighted between the Bretton Woods Institutions and the BRI relates to the lower than optimal lending criteria of the BRI. Since Chinese government-owned banks have the backing of the state, BRI partner countries can receive loans even if the projects are not expected to be profitable.

Even before the COVID-19 pandemic, the World Bank estimated that nearly one-third of BRI partner countries were at high risk of debt distress. However, the low emphasis on environmental and social impact assessments by the BRI has meant the World Bank and other lending institutions have struggled to promote high-quality infrastructure projects. The BDN certification process must be a driver for projects with better commercial lending viability while still maintaining an openness that will invite a critical mass of private investment to guide quality infrastructure goals.

While the BDN has received $2 million from the US State Department, no specific projects for certification have been announced. The undersea fiber optic cable to Palau has been the only project that has attracted financing from all three BDN countries Still, it is unclear whether it will be a test case for receiving certification by the BDN.

The Center for Strategic and International Studies has pointed out that the United States does not have the appetite to compete on a dollar-to-dollar basis with the BRI, and should instead focus on promoting rules that reflect US values. But efforts to promote “the highest standards” have been criticized for only reflecting the values of developed countries. To avoid such criticism, the BDN will have to be implemented in a way that captures the characteristics and needs of recipient countries rather than applying a one-size-fits-all standard.

Given that the BDN is expected to invite private investment, the emphasis on accountability might be more focused on the investors seeking a better rate of return than the people affected by the policy. Therefore, It is imperative to see how the BDN will balance promoting high-quality infrastructure projects while also being accessible enough to shrink the infrastructure gap, which is projected to be about $94 trillion over the next two decades.

In recent years, there has been exponential growth in environmental, social, and governance related assets, with approximately one-third of global assets in sustainable investments. Norway, the world’s largest sovereign wealth fund, recently released its plan to impose stricter ethical and environmental guidelines on its investments and stated that it would not be adding more emerging markets to its portfolio. While surveys show that a certification program for quality infrastructure projects would increase the likelihood of private sector participation in infrastructure projects, the standard-setting efforts will need to be structured in a way that promotes infrastructure projects in places of need as well.

These factors underscore the importance of standard creation through a multi-stakeholder mechanism. The OECD has provided technical support by building a multi-stakeholder design process for the BDN certification framework. The aim is to build in sustainability as an objective both at the design and the implementation phases, signaling to the financial markets that the risks have been managed, which would make it more attractive for private sector investment.

While the OECD indicated that BDN certification would be based on existing criteria such as the G20 Principles for Quality Infrastructure Investment, the OECD stated that stakeholders from 96 countries had been engaged in finalizing the BDN certification framework, including China as an observer. Given that the Biden administration has shown a keen interest in mobilizing allies and like-minded countries for various standard-setting initiatives, the BDN is a great opportunity to showcase US commitment to multilateralism.

Even though the BRI has been criticized for being poorly coordinated and too fragmented, the Trump and Biden administrations have perceived the BRI as a tool for achieving Beijing’s geopolitical goals. Countries, especially in Southeast Asia, have often shown reluctance to align with either the United States or China. However, some ASEAN members have expressed interest in pursuing financing opportunities with the trilateral partners.

The Biden administration needs to emphasize to developing countries that the BDN will be utilized for the common objective of achieving Sustainable Development Goals, rather than being perceived as another means to contain China.

John Taishu Pitt (jtp82@georgetown.edu) is a foreign associate at a law firm in Washington DC and a Fellow in the Institute of International Economic Law at the Georgetown University Law Center.

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