The United States and East Asian regionalism: Competing paths to integration

White House/Pete Souza

President Barack Obama attends the Trans-Pacific Partnership (TPP) meeting at the ASEAN Summit at Peace Palace in Phnom Penh, Cambodia, Nov. 20, 2012. Taking part in the meeting, clockwise from the President, are; Sultan of Brunei Hassanal Bolkiah; Prime Minister Mohammed Najib Abdul Razak of Malaysia; Prime Minister John Key of New Zealand; Prime Minister Lee Hsien Loong of Singapore; Prime Minister Nguyen Tan Dung of Vietnam; and Prime Minister Julia Gillard of Australia.

Article Highlights

  • Though it has neglected the region for brief periods, US trade policy has made East Asia a central focus.

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  • Beginning in the 1940s, the US opposed derogations from MFN status obligations, and most regional trading arrangements.

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  • By the late 1980s, forces came into play that induced the US to introduce bilateral and regional trade agreements.

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  • Sec. Baker’s attempt to meld trade policy with diplomatic & security goals echoed through succeeding administrations.

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Editor's note: This paper originally appeared in the International Journal of Korean Studies, Vol. XVI, No. 2 in Fall/Winter 2012.

Abstract

The United States and East Asian regionalism: Competing paths to integration

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Though it has neglected the region for brief periods over the past two decades, U.S. trade policy, linked to U.S. diplomatic and security policy, has made East Asia a central focus. Secretary of State James Baker's vow not to allow a line to be drawn the middle of the Pacific with the US on one side and the nations of Asian on the other has held steady. This article traces and analyzes U.S. trade policy toward East Asia since 1990. It describes the development of competing paths to Asian trade integration: a trans-Pacific vision, embodied now in the Trans-Pacific Partnership Agreement (TPP); and an intra-Asian vision, embodied most clearly in the ASEAN Plus Three process. The article concludes with a detailed description of the major negotiating issues and challenges that have emerged in the ongoing TPP bargaining sessions.

Key Words: Asian regionalism, U.S. trade policy, APEC, Trans-Pacific Partnership Agreement, ASEAN Plus Three

Introduction

Looking Back: A Selective Historical Overview of U.S. Regionalism

Beginning in the 1940's, when the postwar multilateral trading system was founded around the truncated provisions of the General Agreements on Tariffs and Trade (GATT), and continuing to the mid-1980s, the United States steadfastly opposed derogations from most favored national status (MFN) obligations, and, therefore, most regional trading arrangements. (Cold War exigencies account for the exception regarding the formation and growth of the European Community.) Essentially, the U.S. adhered to a two-track trade policy: (1) multilateralism, embodied in its membership in the GATT and in its leadership in eight rounds of trade-liberalizing GATT negotiations; and, (2) unilateralism-bilateralism, dictated by the substantive reality that GATT did not cover key trading sectors, and thus powerful domestic interests demanded that U.S. political leaders pursue independent bilateral negotiations—particularly with Japan and the EC—to achieve trade policy goals beyond multilateral disciplines. Unilateralism was linked directly to bilateral negotiations as the U.S. also reserved the right to act on its own by enforcing its will, should bilateral negotiations fail.1

By the late 1980s, however, forces were coming into play that would induce the United States to introduce bilateral and regional agreements into its portfolio of trade instruments. In response, beginning with the Bush (I) administration, but continuing in more urgent and vocal fashion in the Clinton administration, voices for a greater priority for regional trade policies obtained greater influence within the U.S. executive department. Secretary of State James Baker had stated that while the United States hoped that liberalization would occur in the Uruguay Round, "If not, we might be willing to explore a market-liberalizing club approach through mini-lateral arrangements or a series of bilateral arrangements"2

And in a move that still resonates within the current debate over the correct balance in U.S.-Asian trade and diplomatic policy, it was Baker who challenged (behind the scenes) the first proposal for an intra-East Asian regional institution in form of an East Asian Economic Caucus, advanced by Malaysia in 1991. Baker made clear to U.S. allies in the region that the United States would oppose any plan that "drew a line down the middle of the Pacific" and placed the United States on the other side of that line.3 Baker's attempt to meld trade policy with broader diplomatic and security goals has echoed throughout all succeeding US administrations.

 

 

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