Journal of Political Risk, Vol. 7, No. 6, June 2019
This interview with Dr. Leszek Buszynski, author of Geopolitics and the Western Pacific: China, Japan and the U.S. (Routledge, 2019), took place by email with Dr. Anders Corr between May 31 and June 12.
Anders: What are some of your recommendations in the book?
Leszek: The recommendations are in the final chapter and have been written from the perspective of Australia as a a middle power and ally of the US. Basically, the U.S. relies excessively on military power to counter China but this is creating the fear of a US-China clash in the region from which China benefits, particularly within ASEAN. Scuttling the Trans-Pacific Partnership (TPP) was a mistake because it is a way of bringing together the states of the region into cooperation with the U.S., Japan and Australia in a way which would offset Chinese influence.
Anders: Don’t you think that China is also creating fear with its military buildup? Wouldn’t countries like Japan and South Korea be even more fearful if they did not have the U.S. military there to protect them?
Leszek: This is not the issue, the answer is of course. But without a broader US presence in the region, one that is not just military based, regional countries such as those in ASEAN would feel the pressure to gravitate to China. China has a way of undermining the U.S. presence and its alliance system by playing on regional fears of conflict and instability, the Philippines under Rodrigo Duterte is a case in point. America has to counteract that.
Anders: Wouldn’t China be able to play on regional fears of conflict and instability even more without a U.S. military presence? As for the TPP, it did exclude China, which was wise. But cheap imports from other countries also threaten strategic industries like steel and heavy manufacturing. The TPP was arguably a sledgehammer approach to trade agreements, where a scalpel was needed. The Trump administration, recognizing the military competition with China, has had to revise the prior U.S. support for near-untrammeled free trade, which was built on an assumption of no great power military competition. That assumption removed, the U.S. needs to ensure that it has strategic industries like steel and shipbuilding protected from outside competition. In case of war, the U.S. will need these industries to be up and running, rather than playing catch up. The U.S. is still present in Asia economically, but prefers to operate with smaller-scale and more controlled bilateral trade agreements as opposed to the overarching principle of free trade found in the TPP. Overarching free trade made strategic U.S. industries too vulnerable. A return to bilateral agreements also allows the U.S. to more easily use its economic weight in the international system to reward countries with preferential trade agreements, for example when they decide to ally with the U.S. and not China.
Leszek: The issue is not the U.S. military presence in the Western Pacific as almost every country wants it to continue. Some distinctions need to be introduced here. The U.S. alliance system works well in Northeast Asia as Chinese support for North Korea has strengthened those alliances with South Korea and Japan. The weak area is the Southeast Asian front where ASEAN faces Chinese pressure in the South China Sea. How can the U.S. orchestrate a regional coalition against China when ASEAN dithers? The alliance system can bring together Japan and Australia and the US but the key players in Southeast Asia, those with nonaligned traditions will not join security relationships with the U.S. In particular it is important to get Indonesia on board but Jakarta will avoid security agreements with the U.S. while it insists on its independent and active policy. Other relationships should be created at various levels which will link the US alliance system with regional players such as Indonesia and Vietnam neither of which will openly join a security relationship with the U.S. Japan has been pushing in this direction by developing security ties with these ASEAN countries in a way the U.S. cannot. Economic regionalism is another important way of bringing together the regional countries with America’s allies such as Japan and Australia. Both have been promoting the TPP and have lamented the American withdrawal. Your comments show that America has had enough of multilateral free trade agreements but it remains a way of bringing the region together and without China many of those dangers you point out could be minimised. Other countries such as Japan and Vietnam want to protect their strategic industries and the negotiated outcome of a TPP agreement would probably skirt around these issues, otherwise it would not get support. Economic regionalism has a political purpose and it is unfortunate that the Trump administration does not understand that.
Anders: It seems that economic regionalism is a double- or even triple-edged sword. On the one hand, I agree that TPP may bring participating countries closer together politically. But even here we have recently learned that extensive free trade with China did not change it into a peaceful democracy. Just the opposite. It empowered China’s economy, which allowed it to build its military power and challenge democracy and human rights not only at home in an unprecedented manner, but increasingly abroad. Are we really to expect that if we adopt TPP, Indonesia will become a security ally, or Vietnam will become a democracy? Or, is the excitement for TPP more driven by corporate special interests that want to open new markets? Trump has shown how tariffs can be used against China and Mexico in bargaining for both economic and political concessions. Free trade agreements give up that leverage, and arguably advantage countries that have lower environmental, tax and labor regulations. There is a race to the bottom in a free trade environment, whereby capital moves to the most permissive jurisdictions. For decades, this has lead to downward pressure on U.S. wages, corporate taxes, and environmental regulations. The U.S. is forced into these measures to keep its corporations at home. China, meanwhile, has been allowed to subtly deploy strategies of dumping abroad and subsidies at home in order to build strategic industries like steel, shipbuilding, the aeronautics industry, civilian nuclear power, and telecommunications. That has global security implications as these industries, critical for military and economic power, have deteriorated in the U.S. and Europe.
Leszek: The TPP’s value is that it keeps China out, and allows Australia and Japan to forge regional cooperative relationships that can have security implications. It is not about making Indonesia into a “security ally” since its nonaligned tradition will not permit that. It is about obtaining Indonesian cooperation against China in the South China Sea. It is not about turning Vietnam into a democracy, but drawing Vietnam into a wider network of security relationships. U.S. policy has to be nuanced in this area to draw out the cooperation of these countries. The region is concerned about China, some are alarmed, some like the Cambodians have resigned themselves to Chinese domination. U.S. FONOPs [freedom of navigation operations] serve a good purpose in showing that America will not concede the South China Sea to Beijing. But the next step should be diplomatic and that means drawing the ASEAN countries into a wider security network. This is where Japan and Australia can play a useful role. Australia’s relationship with Indonesia is improving, Japan has developed security ties with Vietnam and as U.S. allies both can link these relationships to the alliance system. I agree with your comments about China taking advantage of free trade. America has indulged China for far too long and allowed it to take advantage of the liberal trading system while it strengthened its mercantilist policies. That is the legacy of the Clinton era. There was an opportunity to press China over these issues before it was allowed to join the World Trade Organization (WTO) in 2001 but the Clinton administration desisted. For decades America had the hope that China would learn the value of the free market and the liberal trading order. However, the Chinese learned to exploit it cleverly. Now America pays the price and so do all the other developed countries that had high hopes about China. What China wants is civilisational dominance; everything Xi Jinping says points to this aim of becoming number one. To use a phrase made popular by Richard Nixon, America has been “schnookered,” I think it is a Yiddish word. It is good to see that Americans are waking up and freeing themselves of past illusions about China.
Anders: Can’t Australia and Japan form regional security relationships without the TPP? Can’t we ask Indonesia to help against China in the South China Sea without the TPP? And, isn’t Indonesia and India’s nonalignment outdated? Clearly we need all hands on deck against China, history’s most powerful totalitarian state. Yet, India is a member of the Shanghai Cooperation Organization (SCO), which is the closest China has to an alliance system. Vietnam too is showing closer integration with the Trump administration than it did with the Obama administration, and Trump cancelled the TPP. I’m not seeing evidence that the free trade element of the TPP would actually lead to more security cooperation against China.
Leszek: Nonalignment is deeply embedded in the foreign policy communities of countries like India and Indonesia. It is not outdated. So this is why Japan in particular can reach out to these countries in a way that the US cannot. The Shanghai Cooperation Organisation cannot be called a Chinese alliance system because Russia is at odds with China over its influence in Central Asia. Russia wants to keep Chinese influence out. India’s membership of the SCO was not desired by China which resisted it because it will balance China. You may be critical of the TPP and economic regionalism but that is where the Chinese make gains. Consider the Regional Comprehensive Economic Partnership (RCEP), which was proposed by the Association of Southeast Asian Nations (ASEAN) and includes China. This is where China can extend influence in the Western Pacific and the Chinese were no doubt overjoyed when Trump withdrew from the TPP. China’s domination of economic regionalism will extend its influence and neither Japan nor Australia want that so they have promoted the TPP-11 (minus the U.S.).
Anders: Why shouldn’t India and Indonesia want strong allies against China, which is impinging on both territorially, in the Himalayas and South China Sea respectively? The People’s Liberation Army is in frequent shoving matches with the Indian Army in the Arunachal Pradesh region, and China’s 9-dash line cuts into Indonesia’s exclusive economic zone. Neither India nor Indonesia can beat China alone. They need allies to defend their territory. Allies would require an abandonment of their long-held “non-alignment”. Sitting on the fence is a doomed strategy when facing a potential regional hegemon. Japan cannot defeat China alone. India and Indonesia cannot rely on Japan against China. All three countries need to help the U.S. through an alliance if they want to maximize their chances of resisting China successfully. The alternative, other then fence-sitting, is the SCO, which is headquartered in Beijing. China is today its leading economic and military power, and the organization has always focused on security issues, including border negotiations, intelligence, a pledge to combat terrorism and separatism, and large military exercises and intelligence (See for example, Michael Fredholm, The Shanghai Cooperation Organization and Eurasian Geopolitics, NIAS, 2013, p. 4). The group grew out of border negotiations in April 1996 between China, Russia, and three central Asian republics. While in theory it is a collection of equal states, China and Russia hold most of the power, with China now clearly predominant. Its working languages are Chinese and Russian. Its ostensible counter-terror mission gave China and Russia a patina of legitimacy in their violence against Uyghurs in Xinjiang, and in the second Chechnya war. Pan Guang (Director, Center of SCO Studies at the Shanghai Academy of Social Sciences) describes China as having a “crucial role” in the SCO based on “formulating the theoretical guidelines”, “promoting institutionalization”, and “giving direct support to major projects”. According to Pan, China’s “financial contribution to the organization surpasses that of any other member.” He notes that China offered $900 million USD in buyer’s credits to other SCO members in 2005-7. China also offered $10 billion USD in 2009 to address the financial crisis (See: “The Spirit of the Silk Road: The SCO and China’s Relations with Central Asia”, in Fredholm (ed.), 2013, pp. 26-7). With China’s global ascendency apparent in 2019, Russia dependent on China for foreign exchange through energy exports, and China aggressively impinging on SCO member India’s territory in the Himalayas, we can no longer easily accept the fig leaf of equality between SCO members. The group is described as a counter and replacement for western institutions. While some would argue that it should not be seen as a military alliance based on some differences among the allies, it is the closest organization that China has to a military alliance and should therefore be opposed as such by anyone who wants to protect democracy and human rights from China and Russia’s territorial aggression and attempts to replace post-WWII institutions with those more friendly to authoritarian rule. The RCEP is seen as a means of regional economic influence for Beijing, but it could also be a strategic liability. If free trade between RCEP nations leads to a weakening of China’s strategic industries because of lower cost alternatives abroad, China would bear some logistics risk in case of war and the breakage of supply chains. This is the same risk that the Trump administration is seeking to avoid by protecting strategic industries like steel and industrial manufacturing in the United States. Given China’s own protectionism and subsidies of strategic industries, it would be foolish to allow them to destroy our strategic industries by not giving them protection. The peace and efficiency effects of free trade only work when other countries have long-term peaceful intentions and do not try to revise the territorial or international status quo. That does not describe China, which seeks to revise the international system and regional borders. Bilateral trade agreements are better-suited to the fine-grained subsidies and tariffs required to maintain strategic industries in places like the US, Japan, and Australia, all of which would have much increased supply-chain risk during war. They also retain power for major powers like the U.S. in ensuring that countries with which it trades comply, for example, with alliance defense spending commitments. The U.S. relinquishes too much power in the form of trade leverage when it negotiates large free trade regimes. Given that the U.S. is the leading defender of democracy globally, that has negative effects on the viability of democracy in the future. Free trade regimes make more sense in Europe, where supply chains can be protected, than between countries like the US, Japan, and Australia, where supply chain reliance on maritime shipping make them vulnerable during war.
Leszek: On India, Indonesia and Japan’s need to help the US through an alliance if they want to maximize their chances of resisting China successfully, there are very great differences between these three countries relating to the degree of threat they perceive from China, their foreign policy traditions and their relationship with the US. The Japanese regard China as a threat in the Southwest where the Senkaku islands are located and are comfortable in alliance with the US. The same cannot be said for India and Indonesia as both countries do not perceive a threat from China to the same degree and their nonaligned traditions exclude the idea of alliance with the US. These countries may develop security relationships with the US through their militaries but below the level of a alliance which would be publicly contested and opposed. On the SCO, the idea of equality in this organisation is not an issue as it is clear that China is preeminent. However, that pre-eminence has been weakened somewhat by the inclusion of India and Pakistan as members in 2017. Those articles you mention were published in 2013 and do not take into account the latest developments. India and Pakistan were observers in the SCO, members in waiting as it were, so it was always intended that they would join as full members eventually. It is unclear why China accepted their membership which was supported strongly by Russia and the Central Asian states but it seems likely that Beijing was faced with strong pressure which it could not deflect without impairment of the organisation. If so, then it shows that there are limits to China’s influence over the organisation with the result that the SCO is a much weakened organisation that will have its hands full in coping with the India-Pakistan conflict. On the RCEP and free trade in general, certainly, a case can be made for protecting strategic industries in the U.S. and the free trade doctrine can be destructive in this sense. But I do not think that free trade or the RCEP would be a liability for China which adopts mercantilist policies to control trade liberalisation. Other countries that adhere to free trade doctrines, and Australia is one of them, will become victims in any trade liberalisation agreement involving China that does not play by the rules. On free trade regimes making more sense in Europe, free trade agreements have benefited ASEAN and Japan as the flow of investment has increased, enabling manufacturing to be located in low wage economies according to particular country advantages. So free trade agreements also make sense in Asia. There is another issue here that relates to the US which you say has not benefited from free trade. I was reading a report on how US multinational companies reap huge profits from free trade agreements which give them direct access to new markets. Free trade may not benefit the American worker as the outsourcing of manufacturing destroys employment, but it certainly brings big profits to big business.
Dr. Leszek Buszynski is a Visiting Fellow at the Strategic and Defence Studies Centre at the Coral Bell School of Asia Pacific Affairs, Australian National University. Dr. Anders Corr is the publisher of the Journal of Political Risk. JPR Status: Interview.