PRESIDENT-ELECT DONALD TRUMP TO UNRAVEL THE STRATEGIC REBALANCING TO ASIA?

US withdrawal from the TP would empower China to write the economic rules in the Asia-Pacific region

DURING HIS LAST trip to Southeast Asia as the President of the United States, President Barack Obama made an emphatic defense of his “strategic rebalancing policy,” dismissing critics who doubted America’s long-term role in the region. A significant component of the strategic rebalancing policy to Asia is the reassertion of US economic leadership in the region through the transpacific Partnership (TPP) Trade Pact, an initiative of the George W. Bush administration in 2008 that became a priority of the Obama administration.

The TPP is the economic component of the Obama administration’s rebalancing strategy to Asia. It is based on a multi country consortium that includes Canada, Chile, Mexico, New Zealand, Singapore, Australia, Brunei, Malaysia, Vietnam, Japan, and the United States. The agreement is intended to reduce tariffs and other trade barriers while streamlining trade and investment rules and procedures. The TPP also removes barriers to investment, simplifies customs procedures and creates an international dispute resolution system.

US President Obama made the pitch for the TPP, repeating that the TPP is not only a component of the rebalance but also an important counter to China’s efforts to dominate Asia-Pacific trade and investment activities. President Obama’s lobbying was made in the light of China’s growing economic clout over America’s allies and friends in the region. Many East Asian countries and Australia have trade agreements with China that were signed after the US rebalance was announced in 2012; these countries now have China as their number one trading partner.

China has also initiated several projects aimed to foster regional integration through trade, infrastructure development, and currency circulation.

In October 2013, China paved the way for the creation of an Asian Infrastructure Investment Bank (AIIB), with controlling shares held by China. By creating this bank, China sees infrastructure development as an important tool in bolstering its economic clout over East Asia. On Monday, Dec. 5, the Senate ratified the Philippines’ membership in the AIIB.

On Nov. 21, US president-elect Donald Trump announced that the US withdrawal from the TPP is among his plans for his first 100 days in off ice. He called the TPP a potential disaster to the US and declared that he would “negotiate fair bilateral trade deals that brings jobs and industry back” to the US.

The US withdrawal from the TPP will have far-reaching consequences on the US status as a Pacific power and on the regional economy.

Firstly, a US withdrawal from the pact would hurt America’s credibility among its trade and

security allies and partners. Secondly, it will remove the economic component of the Obama’s administration’s strategic rebalancing to Asia that aimed to constrain China’s growing strategic and economic clout in East Asia. Finally, the America’s withdrawal from the TPP would empower China to write the economic rules in the Asia-Pacific region.

In the Philippines, there can be a wider understanding of the strategic environment, these specific policies, and their possible ramifications on our society. Most importantly, over the past several months, the Philippines has been a game changer on the international stage. The country not only responds to its strategic environment, it also shapes the landscape in which all other countries operate in our region.

First, when the international tribunal issued its unanimous award this July on the case brought by the Philippines against China in 2013, countries around the world watched to see what a neutral arbiter would conclude on China’s behavior toward the Philippines and in the South China Sea. One of the court’s most important findings was the strike- down of China’s “nine- dash line,” which overlapped with the sovereign claims and exclusive economic zones of not only the Philippines, but also all the other claimant states in the South China Sea disputes, such as Malaysia and Vietnam.

Second, with President Duterte’s recent trip to Beijing and his supposed “pivot” to China, the Southeast Asian claimants, China, Japan, and the United States were all taken by surprise over what looked to be a Philippine turnaround on its positions.

Beyond the trip to China, there is mostly speculation as to what is in store in the months ahead. Thankfully, the Philippines has not set aside the tribunal’s rulings with any finality; however, there is not yet clarity over the path toward resolving the disputes between the countries involved, or even binding agreement that would freeze all activities and avoid further disruptions to the status quo.

Beyond the West Philippine Sea disputes, the government is also taking into consideration the other areas of its relationships with the claimant parties. There are no easy answers to the Philippines’ strategic situation, but in order for the country to best pursue its foreign policy objectives, it must be deeply cognizant of its own strategic environment and of the views of its neighbors.

On Thursday, Dec. 8, the Stratbase ADR Institute will be bringing together experts on these issues from Japan, the United States, Australia, and the Philippines during its Pilipinas Conference. Our objective is to enrich public discourse and information on Philippine foreign and security policy given current trends for 2017 and beyond.