How Can China’s Neighbors Make Progress at APEC?

Opinion

How Can China’s Neighbors Make Progress at APEC?

It’s somewhat surprising that the South China Sea is not on the agenda of this week’s APEC meeting given a majority of the world’s container trade passes through the disputed area. In order to re-establish some credibility and trust in the region, China could use the venue to further clarify its intent toward land reclamation in the South China Sea (if anyone is listening). As Dr. Hiep suggests, other claimant states will likely meet on the sidelines to discuss the prospects of choosing to deepen ties with the U.S. or develop strategies to balance both the U.S. and China in their foreign trade and security policies.

CSIS’s Michael Green describes the South China Sea as a “grey zone” of coercion where the U.S. and China will use the dispute to pressure claimant states into advancing their own foreign policy agendas. I would like to extend this concept of the coercive grey zones to include both the cooperative grey zones and competitive grey zones of the current U.S.-China relationship. The yearly APEC meeting is a critical venue for the identification of other cooperative or competitive grey zones where U.S. and Chinese interests overlap or clash.

As a way to deepen and further define the U.S. rebalance to Asia, the U.S. should increase contact with all APEC partners, China included, in the cooperative zones of climate change and counter-terrorism, and to create competing architectures with China in the zones of cyber-security, free trade agreements, and particularly energy and resource management in the Arctic and mainland Southeast Asia. Increased focus on these cooperative and competitive zones will engender economic integration and force outcomes which lead to the eventual strengthening, not an unravelling, of the U.S.-China relationship.

Further, the U.S. should use opportunities such as the APEC meeting to transform coercive zones, such as the South China Sea, into zones of cooperation. The U.S. rebalance to Asia has created space within the context of the South China Sea dispute for claimant states such as the Philippines and Vietnam to deepen security ties and begin to establish mechanisms for resource sharing. Indonesia and Malaysia are likely to follow suit. Eventually this momentum could spill over into increased multilateralism within ASEAN, in which China and the U.S. also operate as key external partners.

TPP expansion is certain to be high on the agenda of formal or informal discussions at the APEC meeting even though the newly settled trade agreement has yet to be ratified by its twelve member states. The TPP is an invention of APEC, and all TPP participants are required to be APEC members. New trade conditions introduced by the TPP coupled with rising wages and economic slowdown in China will bring about a substantive and significant rearrangement of the global value chain. Non-TPP states in Southeast Asia such as Thailand, Indonesia, and the Philippines inevitably will respond to lost opportunities enjoyed by TPP states such as Vietnam and Malaysia and begin to line up for TPP accession. (Likewise the TPP could attract states such as Cambodia, Laos, Myanmar, and even India to seek membership within APEC in order to sign up for the TPP.) A key caveat to TPP membership accession is that new members must negotiate terms of entry with each of the 12 original members. In consideration to this challenging hurdle, the APEC meeting and an upcoming ASEAN summit in Kuala Lumpur will provide the fertile seedbed for prospective states to explore accession to the TPP and interface with the current membership.

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