As the new State Department team settled in, the U.S. attempted to maintain the heightened momentum in relations with Southeast Asia created by the tsunami relief effort earlier this year.  In May, Deputy Secretary of State Robert Zoellick travelled to Singapore, Thailand, the Philippines, Vietnam, Indonesia, and Malaysia, using the trip to proclaim a new policy of greater attention to the region. President George Bush hosted Indonesian President Susilo Bambang Yudhoyono (SBY) in May and Vietnamese Prime Minister Phan Van Khai in June, inaugural visit to Washington for both leaders.  Also in June, Defense Secretary Donald Rumsfeld attended the Shangri-La security meeting in Singapore and used the spotlight to criticize Beijing’s presumed expansionist aims. Rumsfeld’s choice of Singapore as a venue for the remarks, combined with Zoellick’s listening tour, signaled growing interest in Washington in China’s increasing influence in Southeast Asia.

Indonesia was of two minds about the U.S.  A recent Pew survey reported improvement of the U.S. image there because of tsunami aid, but demonstrations in Jakarta over the Newsweek story on Islamic prisoner abuse at Guantanamo Bay showed fresh resentment.  U.S. military cooperation moved incrementally toward a more regional approach, while several rounds of bilateral trade talks were held.  Human rights remained central to U.S. policy in Burma as Washington prepared to renew sanctions and made clear its opposition to Rangoon’s chairmanship of ASEAN in 2006.

Marking China’s rise in Southeast Asia

U.S. analysts have noted China’s growing political, economic, and security role in Southeast Asia over the past decade, but U.S. policymakers are only now pointing to it overtly.  Prior to his departure for his Southeast Asia trip, Zoellick linked the visit to the need for Washington to take a more activist role in Southeast Asia in the face of growing Chinese influence. Paraphrased in the Washington Post, he emphasized that the U.S. was not competing with China in the region – a slogan that would become official boilerplate – but that China’s growth challenged the U.S. to remain engaged in the region.  As the former U.S. trade representative (USTR), Zoellick was no doubt mindful that ASEAN’s trade with China is expected to eclipse trade with the U.S. in 2005.  This point was echoed at Senate Foreign Relations Committee hearings in June, on China’s role in Asia.

Ironically, given Zoellick’s implied concern about gains China has made in Southeast Asia, his itinerary reflected one of the drawbacks of U.S. policy in the region. It left out the three countries in which Chinese influence is strongest: Burma, Laos, and Cambodia. Sanctions against the Burmese government severely restrict U.S. activity in the country, which Beijing has capitalized on with large aid and military equipment packages. Although Congress finally granted normal trade relations to Laos late last year, U.S. aid levels there are easily overshadowed by Chinese contributions to build and upgrade Laotian infrastructure. Congress continues to restrict assistance to the Cambodian government. In this quarter, UN Secretary General Kofi Annan announced that the requirements for a tribunal to prosecute Khmer Rouge leaders had been met and that the trials would go forward. Despite the critical role the U.S. played in negotiating the formula for cooperation between Cambodian and international jurists in the tribunal, the U.S. now refuses to contribute funds for it. If U.S. policymakers give further attention to Beijing’s influence in Southeast Asia, they will have to consider whether they are ceding these poorer countries to China.

Secretary Rumsfeld implicitly contributed to this new official wariness over China’s role in Southeast Asia when he sharply criticized Beijing at the IISS Asia Security Conference in Singapore, The Shangri-La Dialogue.  Although Rumsfeld did not dwell on China’s role in the region, his remarks were not lost on Southeast Asian participants.  He asked, “Since no nation threatens China, why these continuing large weapons purchases?” He also faulted Beijing for its political processes, in tacit comparison to the more democratic India, which the U.S. hopes will help keep China in check. Although Southeast Asian governments would probably not disagree with Rumsfeld on some of the facts, they are uneasy at the prospect of being asked to “choose” between Washington and Beijing at some point of political conflict between the two powers.

Creeping multilateralization in security

After the U.S. was rebuffed on an overt Regional Maritime Security Initiative (RMSI) for the Strait of Malacca by the Southeast Asian littoral states last year, the Pentagon and the U.S. Pacific Command have been quietly pursuing bilateral maritime cooperation in the region. The highlight of this quarter was the joint naval exercise with Singapore in the South China Sea.  Last year the U.S. also conducted bilateral maritime exercises with Malaysia.  Throughout the year, the littoral states pursued ad hoc joint maritime exercises, which arguably would not have occurred without the catalyst of the ill-fated RMSI. At this stage, these activities are primarily confidence-building measures. Comprehensive exercises that bring the littoral states together with external powers at a future point are neither inevitable nor automatic, and will require greater political will all around.

In the meantime, the Cobra Gold exercises are gradually expanding and may offer the best basis for multilateral security cooperation in Southeast Asia.  They were held in May in Chiang Mai, Thailand, far away from the troubled south where Bangkok has made clear that it wants no foreign troops.  This year Japan was inducted as a partner, joining the U.S., Thailand, and Singapore, with several other nations observing the exercises.

Friction over Mindanao

The U.S. continues to have a strong interest in negotiations between the Philippine government and the Moro Islamic Liberational Front (MILF) in the southern province of Mindanao, although Washington maintains an arms-length distance from the talks, which are facilitated by Malaysia.  During his trip to the Philippines in May, Zoellick implied that progress on this front could result in an increase in U.S. aid levels for the Philippines – Washington has had a longstanding offer to help reintegrate MILF insurgents in Mindanao into civilian occupations.

However, management of this issue on a daily basis can be difficult because of Philippine perceptions that U.S. counterterrorism policy conflicts with the negotiations.  In this quarter, the U.S. embassy had to address blowback from the Philippine press on the visits to the Philippines earlier this spring of U.S. Pacific Command Chief Adm. William Fallon and Assistant Secretary of State for East Asian and Pacific Affairs Christopher Hill. The embassy denied reports that Fallon and Hill had told the Philippine government that the U.S. wanted negotiations to stop because of links between the MILF and members of the Jemaah Islamiyah (JI) and the Abu Sayyaf. They also refuted reports that the U.S. would declare the MILF a terrorist group.  The issue of linkage has been sensitive in the relationship, since the U.S. believes that personal links exist between MILF and JI members, an assertion that is supported by many nongovernmental analysts, although Washington does not allege that there are institutional ties between the groups.

In the meantime, in this quarter the Philippine government peace panel completed its “roadmap” for negotiations with the MILF.  Jesus Dureza, the panel chair, noted that the plan used several reference points from peace agreements signed with the Moro National Liberation Front (MNLF) in 1976 and 1996. However, the MILF has long made clear that it would only accept a plan that granted the MILF greater autonomy than that given to the MNLF.

Symbolic gains, and hits

The Indonesian and Vietnamese heads of state visit to Washington were each historic in their own way.  SBY was the first Indonesian president to have been directly elected, and the summit implicitly celebrated that democratic milestone.  Moreover, he was one of the last IMET graduates before Congress suspended the program in 1991, which gave particular resonance to the administration’s announcement during the visit that Indonesian participation in the IMET program would be restored.  Meetings between heads of state are carefully scripted, with “deliverables” negotiated well ahead of time, and there were few surprises with the SBY visit.  The underlying theme was good governance and anti-corruption, opportune issues as the United States pledged $647 million to Indonesia for tsunami relief, and with debt rescheduling announced in June. U.S. emphasis in this area is only likely to strengthen, since anti-corruption and related enforcement issues presently deny Indonesia access to Millennium Challenge Account funds and will impede any movement toward a bilateral free trade agreement in the future.

Although the U.S. does not play an explicit role in resolving the conflict in Aceh, it strongly supports peace negotations. Talks between Jakarta and the separatist group, Free Aceh Movement (GAM), jumpstarted earlier in the year when the tsunami brought international attention to Aceh, are slowly progressing but have yet to produce a comprehensive agreement.  Even if they do, expectations are tempered by the fact that the 2003 ceasefire and peace accords collapsed in the early stages of implementation.

Although the Bush-Yudhoyono meeting went smoothly, it was conducted against a backdrop of tension in Jakarta, ratcheted up by a Newsweek report on desecration of the Koran at the Guantanamo Bay detention site.  The U.S. embassy was forced to close at the same time as the Bush-Yudhoyono meeting, and the juxtaposition was embarrassing for both countries. A month later, a Pew survey of the Muslim world reported encouraging, if qualified, progress. Anti-Americanism in Indonesia had abated modestly, although the U.S. remains “broadly disliked” in the Muslim world as a whole.  Approval of the United States in Indonesia rose to 38 percent, more than double the figure in 2003 (15 percent).  The gain was attributed to U.S. aid during the tsunami, which underscored what ASEAN ambassadors in Washington had been quietly telling U.S. policymakers since 2001:  a single-minded focus on terrorism in policy toward Southeast Asia would reduce support for the U.S. in the region and impede counter-terrorism, while U.S. aid in non-sensitive areas would show benefits across the board.  However, the tsunami relief effort was not sufficient to bring Indonesian approval of the U.S. anywhere near pre-2001 levels, when support was as high as 75 percent.

The White House meeting with Prime Minister Khai was even more significant, since it marked the first visit of a Vietnamese head of state to the U.S. in the post-1975 era.  The visit also commemorated the 10^th anniversary of the normalization of U.S.-Vietnamese relations. Khai brought a large entourage, which included Deputy Prime Minister Vu Khoan, 10 ministers and vice ministers, National Assembly leaders, and over 100 Vietnamese business figures.  A variety of accords were signed, ranging from an agreement that is expected to lift the moratorium on adoption of Vietnamese orphans to counterterrorism cooperation and intelligence-sharing.

Two agreements in particular were significant.  The first was the decision to include Vietnam in the IMET program, which marks a quiet watershed in the U.S.-Vietnamese security relationship. Hanoi had resisted joining the program because IMET participants are vetted for human rights abuse, and Vietnam already faces human rights linkage in other policy areas. A second significant agreement concerned accords signed on religious freedom, the first such agreement signed under the 1998 International Religious Freedom Act. It is reported to set out steps to improve religious freedom that may help Vietnam avoid future sanctions under the Countries of Particular Concern framework. However, the Bush administration has not made the agreement public, causing human rights groups to charge that it is not sufficiently rigorous.

The Khai visit was successful at the official level, but it also served as a lightning rod for protests by hardline Vietnamese-U.S. groups at every stop on the delegation’s itinerary.  Moreover, it stiffened resolve on the part of Vietnam’s critics in Congress.  At hearings on human rights in Vietnam held the day before the Bush-Khai meeting, Rep. Chris Hill announced that he would re-introduce the Vietnam Human Rights Act, which seeks to restrict U.S. aid to Vietnam unless the State Department certifies that human rights have improved. Previous versions of the bill have passed in the House in 2001 and 2004, but were defeated in the Senate.  In addition, Rep. Loretta Sanchez sought to remove Vietnam from the IMET funding bill, but was persuaded to drop her objection. It was an indication, however, that any move into new areas in U.S.-Vietnamese relations will likely meet with attempts in Congress to link expansion to human rights improvements.

Taking trade to the next level

Although the symbolism of the Khai visit was important, Vietnam’s primary policy goal in its relations with the United States at present is to win approval for entry into the World Trade Organization (WTO).  At the White House, Bush emphasized U.S. support for Vietnam’s accession in principle, but negotiations are still in train.  A round of talks immediately preceded Khai’s visit to Washington and made considerable progress. Licenses granted to U.S. businesses during the trip could help mitigate U.S. concerns about unfair advantage for Vietnamese state-owned enterprises over foreign companies. Nevertheless, the Vietnamese National Assembly must still review and amend dozens of laws to bring Vietnam into compliance with the WTO framework. Washington is likely to maintain pressure on Hanoi in this area to the end, because some policymakers regret having acceded to Beijing’s entry into the WTO before reforms had been fully implemented. Once the Bush administration gives final agreement to Hanoi on WTO, Congress must grant Vietnam permanent normal trade relations (PNTR), which will meet with resistance from some human rights advocates.

The other salient issue in U.S. trade relations with Southeast Asia is the advancement of the U.S. Enterprise for ASEAN Initiative, a ladder of steps intended to promote free trade agreements with Southeast Asian governments. To date, the only FTA concluded has been with Singapore. Negotiations with Thailand are proving to be more complex than originally anticipated. U.S. demands include improvements in Thai labor and environmental protection laws, intellectual property rights protection, and greater access to the financial services sector for U.S. companies. Once negotiations are complete, Thailand could find the FTA to be a hard sell with Congress. The Nation, a leading Bangkok daily, has reported that no more than 70 members in both houses of Congress have said they would support a U.S.-Thai FTA.

The problematic FTA talks with Thailand raise questions whether the ASEAN Enterprise Initiative will sputter out before the end of the Bush administration.  Informally, Malaysia is understood to be next in line after Thailand, but Kuala Lumpur is using Bangkok as a stalking horse, and a protracted or painful experience for Thailand will give Malaysia pause.  A USTR official visiting Southeast Asia earlier this year publicly, if incongruently, suggested that Indonesia, the Philippines, and Cambodia are candidates for future FTAs with the U.S.  The prospects for such expansion are unlikely for the foreseeable future.  As noted above, Indonesian enforcement frameworks are not sufficiently strong, and Manila has shown no interest in entering into FTA discussions with the U.S.  Cambodia is willing, but opposition to the expansion of relations in some quarters of Congress would quash that possibility in the near term. Beyond these specific limitations, opposition in Congress to the Central American Free Trade Agreement (CAFTA) is a sign that the legislature has soured on the prospect of additional FTAs.

Will ASEAN bend on Burma?

ASEAN leaders have been increasingly candid in admitting problems with Burma since its admission to the Association in 1997. These disclosures are probably intended in part to assuage Western governments, which continue to press the military government in Rangoon to reconcile with the National League for Democracy and demand that ASEAN follow suit. An attempt in the Senate last year to impose sanctions on Thailand, to force Bangkok to lean more heavily on Rangoon, raises the spectre, however remote, of secondary sanctions, which ASEAN would obviously like to avoid. However, these complaints also have a ring of authenticity. ASEAN’s engagement policy with Burma has not shown tangible results in promoting political reconciliation in the country, and trade between Burma and other ASEAN countries has also declined in recent years.

The rallying cry for U.S. policy in Burma this quarter has been disapproval of Rangoon’s chairmanship of ASEAN when the rotation comes to it in mid-2006.  Washington has made clear that it will not send a senior official to an ASEAN meeting in Rangoon, and has hinted that it could withhold funds for regional development projects if Burma takes the chair. The ASEAN governments have given the reflexive response – that the Association is governed by consensus and follows the “ASEAN Way,” the rule of noninterference in the internal affairs of a member state.  Behind the scenes, however, ASEAN leaders have been attempting to persuade Rangoon to stand down.

Any such maneuver must make it appear that the impetus for such a move came from Burma itself. At the annual ASEAN Foreign Ministers Meeting in Cebu in April, the Burma chair issue was the main topic, but the only tangible outcome was a statement supporting Rangoon’s right to decide. This dilemma arises at a difficult time for the Burmese regime. Than Shwe, chair of the State Peace and Development Council (SPDC), is still in the process of purging the influence of Khin Nyunt, the prime minister he deposed last year. Withdrawing from the ASEAN chairmanship could damage his image in hardline quarters of the Burmese military. However, bomb explosions in Rangoon in May have given Than Shwe a more concrete and local crisis to consider. Increasingly, the common assumption is that Rangoon will voluntarily withdraw as the 2006 chair at the ASEAN Ministerial Meeting in Vientiane next month.

Looking Ahead

July promises to be a busy month in U.S. relations with Southeast Asia.  On the 12th, Singaporean Prime Minister Lee Hsien Loong will make his inaugural visit to Washington. At that time, the two countries expect to sign the Strategic Framework Agreement, under negotiation since 2003.  The U.S. and Thailand will hold the fourth round of FTA talks in Montana, while the U.S. and Vietnam will conduct another round of WTO negotiations.  It is unclear if these WTO talks will yield formal U.S. approval of Vietnam’s accession in time for the 10^th anniversary of normalization, on July 11, but Washington’s agreement must come soon if Hanoi is to meet its goal of acceding to the WTO by the end of this year.  If the administration does give the nod to WTO, Congress will probably debate PNTR for Vietnam in late September or early October.

The highlight of the month will be the annual meeting of the ASEAN Regional Forum (ARF), which opens this year in Vientiane on July 29. The State Department has announced that Secretary of State Condoleezza Rice will include Thailand in her July 8-13 trip to Asia, the only Southeast Asian country she will visit.  She will apparently skip the ARF meeting, and Zoellick is her presumed substitute. His familiarity with Southeast Asia and his authorship of the Enterprise for ASEAN Initiative in the administration’s first term make him a respected figure in the region. However, despite this and the recent flurry of diplomatic activity, a no-show by Rice, particularly in her first year as secretary of state, could mean that Southeast Asia will get little policy attention at the Cabinet level and above in the second term of the Bush administration.