Economic Security Remains Asia’s Achilles Heel
When it comes to U.S. engagement in Asia, neither Japan nor Korea can claim a lack of interest on the part of Washington. With Prime Minister Suga and President Moon being some of the first foreign leaders to be received in the White House by President Biden, and a steady round of senior government officials from Secretary of State Tony Blinken to Secretary of Defense Lloyd Austin making a point of visiting the region in person. Yet the flurry of high-level engagements and public demonstrations of the United States’ willingness to engage with its allies in the region once again has led to a growing rise in expectations for next steps that go beyond words. It has also made clear a weakness in U.S. leadership in the region, namely in driving economic security.
The latest official visit by a U.S. government official has certainly led to growing concerns about what the United States can actually bring to the table in terms of economic leadership. Deputy Secretary of State Wendy Sherman’s July tour of China and Mongolia as well as Japan and Korea offered insight into some of the challenges facing the Biden administration’s continued engagement in the region. As a former nuclear negotiator with both North Korea and Iran, focusing on relations with Pyongyang when in the region was only to be expected, particularly as it remains a critical issue of interest for Washington, as well as for Tokyo and Seoul.
For Asia...the need for greater clarity in defining rules and values of economic engagement is pressing, and yet Washington has not delivered on those expectations to date.
Yet as the Biden administration looks to the convergence of its own interests with Northeast Asia, it is stability and above all clarity in the region’s economic order. Through numerous bilateral meetings as well as at G7 meetings, there is a clear consensus not only about the threat posed by China’s authoritarian rule, but also about the risks posed by authoritarian rule compared to democratic governments for the future of the digital economy. New technologies are not only creating new jobs and opportunities for growth, but also blurring the lines between economic expansion and security. For Asia, where shared economic interests can oftentimes overcome disparate models of governance, the need for greater clarity in defining rules and values of economic engagement is pressing, and yet Washington has not delivered on those expectations to date.
In fact, even as he has repeatedly called for greater cooperation with Asian allies, Blinken said in an August speech at the University of Maryland that the United States has to prioritize domestic investments especially in infrastructure before looking outward, arguing that “for too long, we thought we could trade more with the world while investing less here at home. That didn’t work out for our economy, for our workers, or for our communities.” Indeed, it is growing concern about the Buy America provisions of the latest $1 trillion infrastructure bill and the prospect for Washington embracing industrial policy more broadly after decades of laissez-faire economics in its endeavors to compete with China that is particularly worrisome to U.S. allies in Asia.
That concern is undoubtedly is one issue that both Tokyo and Seoul share, despite continued tensions between the two sides regarding the legacy of war and occupation in the 20th century. But as Washington looks to establish partners to forge ahead on critical challenges including developing next-generation telecommunications networks beyond 5G to establishing rules of e-commerce and setting standards for digital currencies, the real value that the Biden administration can bring to the table is for the two sides to focus looking forward. The window of opportunity for Washington to exert a leadership role in defining economic rules of engagement in Asia is open for now, but that window may close soon, especially if the White House pursues a more domestically-driven economic agenda.
Follow Shihoko Goto, deputy director for geoeconomics and senior associate for Northeast Asia, on Twitter @GotoEastAsia.
The views expressed are the author's alone, and do not represent the views of the U.S. Government or the Wilson Center. Copyright 2020, Asia Program. All rights reserved.
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