By Furqan Khan
Great Power Politics Fellow, PoliTact

Context

President Donald Trump is set to meet Chinese President Xi Jinping this week in Beijing, a summit originally scheduled for April and was stalled due to the ongoing US-Iran war. With the conflict carrying enormous economic consequences due to the closure of the Strait of Hormuz, it is likely to be a major point of discussion at the summit. What was expected to be a reset moment for US-China relations is now overshadowed by the Middle East conflict, which carries significant implications for the global economy.

Conflict at an Impasse Stage

After the initial Islamabad Talks failed to ease tensions between Iran and the United States, Pakistan’s shuttle diplomacy has reopened the lines of communication between Washington and Tehran. Tensions escalated after Iran closed the Strait of Hormuz in response to the US’ refusal to end the blockade of Iranian ports. While a ‘fragile’ truce remains in place, negotiations are stalled and fears of escalation are growing as the two parties recently exchanged fire in the Persian Gulf. After rejecting Iran’s proposal to open the Strait of Hormuz and end the war, which also suggested delaying negotiations over the nuclear program, Trump reviewed another 14-point proposal from Iran, but has expressed doubts – and later rejected another version. Meanwhile, domestic opposition in the US to the war is growing, which has already cost $25 billion. Moreover, the conflict has caused extensive damage to the US military assets across the Middle East and raised the gasoline price to its highest level in four years.

In the big picture, as the US jumps into another war in the Middle East, diverting its resources from the Pacific, it is pertinent to highlight what this conflict means for China, and its interests in the Middle East, as it also embroils in great power competition.

What is at Stake for China?

Since the beginning of this conflict, China has consistently condemned the US-Israel joint strikes on Iran in February that killed Iran’s Supreme Leader Ayatollah Khamenei and demanded an immediate ceasefire. China has released numerous statements criticizing America’s broader approach to international affairs, and calling the US’ blockade of the Strait of Hormuz “dangerous and irresponsible.” Without mentioning the Iran war or blockade of the Strait of Hormuz, President Xi has criticized American actions in the Gulf, saying that the world may be returning to the “law of the jungle.”

China has substantial stakes in this conflict. It relies heavily on the Strait of Hormuz for more than a third of its energy imports. China remains Iran’s largest trading partner, and over 80 percent of its crude goes to Beijing. At the same time, China has deep economic and investment ties in the Gulf states, and the Strait of Hormuz being critical for its energy supplies, Beijing has leveraged diplomacy to seek an end to this conflict.

The China Hand

The US has accused both China and Russia of providing dual-use equipment and satellite imagery enabling Iran to target US positions in the region. The New York Times and CNN reported, citing US intelligence sources, that China was preparing a shipment of weapons, including anti-aircraft missiles, to Tehran. China has denied these claims, calling them “untrue,” and stating that China opposes such “ill-intentioned conduct.”

As he is set to meet President Xi this week, Trump also played down Chinese assistance to Iran, mentioning Chinese President Xi Jinping’s reassurance that China is not providing any weapons to Iran, while warning of “big problems” for Beijing in case they do so.

The war benefits China in many ways. The spike in oil and gas prices is pushing American allies, from the European Union to the United Kingdom – and from South Korea to the Philippines, into China’s clean energy infrastructure. They see it as a long-term solution to protect their economies. China may also be relieved seeing its rival getting bogged down in yet another war with declining credibility among its allies and the diversion of the American fleet from the Pacific. The US military has already expended an enormous amount of critical munitions that could potentially be used in a future conflict with China. China also appears most resilient in terms of energy security, given its huge oil reserves – the largest in the world. According to a recent report, China has enough oil stored to cover seven months of imports via Hormuz.

However, a conflict with wider economic and security risks reverberating throughout the region is not what China wants. Prolonged instability will threaten global markets and cause supply chain challenges. Moreover, the rising oil prices is already hurting the Chinese economy, making the Iran war and opening of the Strait of Hormuz a central concern for the upcoming Trump-Xi meeting.

China’s Leverage Over Iran

China has a strategic partnership with Iran, which is reflected in the 25-year Comprehensive Strategic Partnership signed in March 2021. This included a massive $400 billion Chinese investment in Iran and defense cooperation in exchange for the discounted purchase of Iranian oil. The partnership allows Tehran to bypass Western sanctions while giving Beijing long-term energy security. China has also expanded its diplomatic footprint in the region by brokering a peace agreement between Iran and Saudi Arabia in 2021, helping the two rival Gulf states restore diplomatic relations.

Despite strong economic and security ties with Iran, China’s leverage has been limited. Nonetheless, Beijing’s role has been consistent, limited, and largely predictable. Chinese officials have used their conventional shuttle diplomacy, where Foreign Minister Wang Yi dialed nearly all regional partners and played its role in the UN Security Council, calling for a negotiated settlement. Beijing also joined Islamabad, the principal mediator in this conflict, to issue a joint ‘five-point initiative’ to end the war in the Middle East. At the same time, as both the New York Times and the Washington Post reported, China actively pursued the Iranians to agree to the initial two-week-long ceasefire.

A week before the Trump-Xi summit, Iran’s Foreign Minister Abbas Araqchi met FM Wang Yi in Beijing, where Araqchi supported President Xi’s four-point proposal to end the conflict, reaffirming his “trust” in China. As part of his regional diplomacy, FM Araqchi also met Russian President Vladmir Putin in Moscow to discuss the war and continue “consultation” on regional and international issues. Trump held his own phone call with Putin during which the later expressed interest in playing an active role in ending hostilities in the US-Iran war. Trump, however, rebuffed the proposal and instead pressed Putin on ending the Ukraine war.

China’s response reflects a cautious great power strategy, where Beijing is concerned about the risks of conflict escalation but is also reaping its limited geopolitical benefits. It has not been pursuing the role of a mediator but rather a great power concerned about its broader interests in the region. Nonetheless, given its diverse energy sources and limited strategic commitment to Iran, China appears to be confident at managing the risks of this conflict.

Trump-Xi Summit 2026

As the two leaders meet this week, the Iran war and the resulting energy crisis will likely be a potential point of discussion. Trump’s announcement to continue the blockade of the Strait of Hormuz, which China uses to import one-third of its energy needs, complicates the process of seeking a reset on major issues, including bilateral trade with China.

Tensions are already mounting as the two powers are taking actions against each other’s firms. The Trump administration recently sanctioned China’s largest refiners and threatened secondary sanctions against Chinese banks for facilitating Iran’s economy. Beijing has blocked Meta’s $2 Billion bid to acquire the AI startup Manus, an attempt to keep cutting-edge AI technology inside China.

The rare Trump-Xi summit is an opportunity for both competitors to bring the US-China relations on track following their trade truce in October last year. Trump realizes this and has been seeking a deal with Iran before the Summit. He wants to meet Xi from a position of strength and not with an unresolved conflict he started, alongside Israel, two months ago, which may now be giving the Chinese side an advantage. With the Iran war hanging over the summit, the meeting will may fall short of the expected outcomes in seeking a reset to the US-China bilateral relations.

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The post Iran War Overhangs Trump-Xi 2026 Summit appeared first on Politact.

The Return of ‘Spheres of Influence’ Politics

Context

While there are different angles to interpret the fast-moving flux in the global political, economic and security situation, the great power rivalry perspective is clearly ascendant.

There is usually a period of calm when one power dominates or when there is stability in the balance of power equation. The rapid economic rise of China and infringement into the traditional American spheres of Influence, like Europe, has clearly been a cause of alarm. Moreover, Trump administration took certain actions that were seen as weakening the Western alliance – deemed essential to deal with emerging global rivals, to include Russia. Europe is critical to American power projection, and it was becoming progressively tied to Russia and China via trade. The present European energy dependence is a case point. Trumps admiration for Putin, and other authoritarian rulers, was seen as a vulnerability. Accompanied by his threats to NATO members to increase defense spending confused the Europeans on American reliability.

Under Biden, US is actively countering the expanding influence of China and Russia – and to reverse the Sino-Russian penetration in different regions. And one of the casualty of this reversal will be the phenomena known as globalization. Security concerns arising from aggressive Chinese posturing in the Indo-Pacific, events unfolding in Ukraine, and COVID-19 related supply chain disruptions have further weakened the case for globalization.

Additionally, these factors have helped eliminate American ambiguity on who is benefiting most from free trade presently. Going against laissez-faire principle is not an easy undertaking when the capitalist system is anchored around the very premise and has tremendously benefited the multinational corporations.

This context begs the question of what future security and trade system is the world shifting towards – and what phase of this transfer the present circumstances represent. It was WWI and II that moved the world to the nation-state system and the creation of United Nations. The answers are not readily available.

Analysis

New Cold War and Spheres of Influence

As these global rivalries escalate, they are being classified as related to the new Cold War. The previous one being between US dominated Western Sphere of Influence – with USSR mostly influencing Eastern Europe. China at that time was not as close of an ally of Russia as it is now.

The Sino-Soviet ties have had their ups and down historically. For example, during the Bolshevik revolution in 1917 Chinese Beiyang government had supported the Whites, like the West, and sent in forces to fight the Reds. Conversely, in 1923 Soviets provided support to groups opposing the Beiyang government. In 1949, with Soviet backed communists won the Chinese civil war leading to the creation of People’s Republic of China. Soviets and Chinese were even involved in a brief border conflict in 1969.

Irrespective, as the new Cold War gets underway, and no near-term Ukraine solution on the horizon, what will this emerging Cold War look like?

The first thing is obvious, the Spheres of Influence was the key character of the old Cold War – dividing the world into communist USSR and capitalist America. The Soviet system was associated with autocratic closed security states, with strict regulations controlling the lives of the citizens. On the contrary, the hallmark of Western democratic states was freedom of expression and trade that led to creativity, innovation, and greater economic prosperity. And these attributes ultimately became the reasons for the success of West against the closed Soviet system.

The new Cold War would likely create similar spheres of influence between US and China-Russia aligned states. While some would argue that this new Cold War is only between US and China. To understand these alignments – how the spheres of influence evolved after the Soviet Union collapsed need to be understood.

NATO’s Evolution

As Soviet Union dissolved during the period of 1988-1991, 15 Soviet republics opted for independence with the Baltic states leading. The former Eastern European states applied and became members of Western security alliance, NATO. A trajectory that has continued to this day – and one of the reasons for Ukraine conflict to erupt, which is also causing Finland and Sweden to move towards NATO.

Another element of this post-Soviet period was that Russia and China both adopted policies that has made Western system stronger, for example allowing foreign investments and free trade. But they did not embrace the democratic political system. So, while China and Russia benefited from free trade, their respective restricting political governance models remained in place. This has been a cause of continuous friction when it comes to for example, state controlling the currency values, protecting minorities and human rights etc.

Conclusion

Moving forward, the roles seem to be reversing. The US and West are shifting away from globalization and altering the supply chains that were created for maximum profitability. On the other hand, China is championing globalization. In May, Chinese Xi Jinping had urged the organization of emerging nations BRICS to, “reject Cold War mentality and bloc confrontation, and work together to build a global community of security for all”.

Two properties of the new supply chains are: they have to be from friendly nations and pose no economic and security implications for the dominant power of the alliance. In other words, the concept that evolved after WWII that economic interdependence can resolve security issues – is being put to rest.

While China has been attracting states through Belt and Road Initiative (BRI) and associated large infrastructure projects, the US, EU, and Japan have begun to counter with their own infrastructure projects. At the recently held G7 conference in Germany, President Biden announced US will help finance $200 billion from public and private sectors to counter Chinese projects.

The question then is how will the emerging respective spheres of influence be monitored and policed. The energy supply lines provide one example where sanctions are playing a critical role. In this, US using its influence in moving Europeans away from Russian energy dependence and building trade relations with China. Meanwhile, it is allowing India flexibility to acquire cheap energy from Russia, however, coercing weaker nations to stay away.

US is also resetting its ties with Saudi Arabia to use the enhance its energy leverage and to keep energy dependent states in-line. President Biden is scheduled to visit Saudi Arabia in July and ask for increase in oil production to compensate for Russian oil shortfall. He will also be attending the meeting of Gulf Cooperation Council. Meanwhile King Abdullah of Jordan has supported the idea of Middle East version of NATO. It’s not clear though what threat perception would the NATO of Middle East counter, Iran, Russia or China? Clearly, it cannot be Israel.

In other words, the balance of power tussles now involve use of economic influence to attract and discipline states. During the previous Cold War, USSR did not have the type of economic prowess that the US and West enjoyed, but in the emerging Cold War the case of China is different.

Thus, there will likely be a China-Russia dominated supply lines and economic zone and the US-Europe controlled one. Ultimately, China and Russia will likely use tactics similar to the West i.e., if the new Cold War persists and matures. The Domino Theory and the associated dynamics that were the underpinning of the old Cold War, will become relevant once more. This will fundamentally alter the way present global trade is conducted, and this will significantly impact the working of the UN Security Council.

The post Emerging Great-Power Rivalry; How Will The New Cold War Unfold As Ukraine Simmers? appeared first on Politact.

Dr Claude Rakisits

Context

India has formally invited Australia to join the large-scale naval exercises to be conducted in the Bay of Bengal (3-6 November) and the Arabian Sea (17-20 November), involving in addition to the navies of India and Australia naval assets of the US and Japan.

This is a very significant development—if not militarily, certainly symbolically—for the future of peace and security in the Indo-Pacific. This will be the first time that the navies of the four countries will be participating together in naval exercises.

Australia, India, Japan and the US are members of the Quadrilateral Security Dialogue, better known as the Quad—a grouping of four Indo-Pacific democracies founded in 2007 whose main mission is to ensure a Free and Open Indo-Pacific primarily through the maintenance of the rules-based international order.

The Timing of India’s Invitation to Australia

India’s decision to invite Australia to join Exercise Malabar 2020 comes in the wake of three important geopolitical developments.

First, an in-person meeting of the four foreign ministers of the Quad in Tokyo earlier this month—a significant symbolic event given the tight Covid-19 travel restrictions. At this meeting the ministers reinforced their countries’ determination to cooperate in a range of areas, including critically but not solely, in the maritime security domain. Except for US Secretary of State Pompeo, no one mentioned China specifically. But the 800-pound gorilla was very much at the meeting.

Second, India and Australia agreed on the Comprehensive Strategic Partnership on 4 June 2020, an agreement which progresses cooperation in a significant number of fields, including in the military and security spheres.

Third, in April-May this year India and China were involved in deadly clashes along the Line of Actual Control (LAC) in Ladakh. Whilst tension has diminished since then, with the holding of several meetings of the corps commanders on both sides and a meeting of the Foreign Ministers last month, this on-going issue with Beijing has been a wake-up call for the Indian defense forces and Prime Minister Narendra Modi—his informal approach to dealing with Chinese President Xi now in tatters.

Can China Hurt Australia For Participating in Exercise Malabar 2020?

Canberra has very much welcomed India’s invitation to the Malabar exercise. Australia’s defense minister, Senator Linda Reynolds, stated “High-end military exercises like Malabar are key to enhancing Australia’s maritime capabilities, building interoperability with our close partners, and demonstrating our collective resolve to support an open and prosperous Indo-Pacific”.

Australia last participated in Exercise Malabar in 2007. The then Australian prime minister, mandarin-speaking Kevin Rudd, decided to pull out of the following year’s exercise to avoid offending China. However, this did not prevent a significant deterioration in the bilateral relations down the road.

Bilateral relations were already at an all-time low. In response to Australia’s call for an independent investigation into the origin of the Coronavirus and China’s handling of it, China slapped huge tariffs on Australian barley in May. New tariffs have also been imposed on Australian beef. And wine exports could be next.

Last month China expelled the last two Australian journalists from the country. It’s been almost 50 years since there hasn’t been Australian media in China. Given that China is Australia’s largest export market, taking 30 per cent of all exports, Beijing could start to really hurt Australia’s economy if it wished to do so.

The Quad is Getting Ready to Resist China

More broadly, China will not be too worried about the military aspects of the Malabar exercise, however, it will note the significant diplomatic push-back it represents to its aggressive military activities in the region, notably its effective unilateral changing of the LAC in Ladakh, its 9-dash claim over most of the South China Sea and the accompanying massive build-up of military-purposed artificial islands, and its ongoing low-level military harassment of Taiwan.

Put differently, while until relatively recently China was willing to play by the rules of the Western-led international order, this has changed progressively since President Xi took over as the head of the Communist Party of China in 2012. Accordingly, the battle lines are starting to get clearer and the Quad is firming up its resolve to stand up to China.

While not being an alliance per se, the Quad could nevertheless become the key security vehicle for the Indo-Pacific. However, the strengthening of the Quad will really depend on the members’ resolve to stand united in the face of the inevitable Chinese response—military, diplomatic and economic—to what Beijing will perceive as a ganging up on the Middle Kingdom.

Biden Presidency Might Act Tough on China—Good News for the Quad

Needless to say, future unacceptable Chinese military activity will not attract equal interest or response from the different Quad members. And Beijing knows this only too well and will accordingly exploit these differences for all its worth.

So what is the future of the Quad? As noted above, much will really depend on the cohesiveness of the grouping and how it responds to future Chinese behavior. A likely Biden administration in Washington would probably be tough on China. This would be good news for the Quad. The display of American political will to fly the flag would reassure the other members of the Quad and make it more worthwhile for others, such as Canada, France, Indonesia, New Zealand and the UK to name some obvious credible candidates, to join the grouping. As Joe Stalin once said, “Quantity has a quality all its own”, a statement President Xi would surely relate to.

This piece originally appeared in The Quint.

The post Evolving QUAD And Australian Participation In The Malabar Exercise 2020 appeared first on Politact.

In the COVID-19 geopolitical context, this zoom webinar, held on on July 28, explores the ramifications of the likely China, Iran economic and security pact for the Gulf region and its ties with Pakistan and India. Another important query examined is how will the pact correlate with the Saudi-Iran tensions and US-Saudi ties. Moreover, the panelists examined the impact of the deal for the China-Pakistan Economic Corridor (CPEC).

The panel included:
1. Khaled Almaeena – Former Editor-in-Chief of Arab News and Saudi Gazette.
2. Ambassador (R) Mustafa Kamal Kazi – Senior Vice Chairman and Senior Diplomat Emarituis, Karachi Council on Foreign Relations.
3. Dr. Claude Rakisits – Honorary Associate Professor, Asia-Pacific College of Diplomacy, Australian National University.

This zoom webinar is part of a series PoliTact has organized to examine the economic and security interconnections between South Asia and the Middle East. In November 2018, PoliTact collaborated with the Middle East Institute to study this relation in detail (link: https://youtu.be/Wq7cWEsaqcs).

The post What Does The Potential China, Iran Economic and Security Deal Mean? appeared first on Politact.

What Is Pushing India to Extreme Policies?
Context
In the COVID-19 environment, the Asia Pacific is increasingly an active theater. A number of inquiries are being contemplated on the role and policy of China as the world grapples on how to deal with the pandemic. Then there is the angle of how China was able to tackle the virus quickly while others are faltering? And thus perhaps indicating Beijing is the net beneficiary so far – as others are being economically weakened.
The focus had shifted to the Pacific long before the arrival of Coronavirus. With a pre COVID-19 annual growth rate of more than 6%, China has been on the trajectory to challenge the US for a while now. And that is the reason substantial intellectual capital has been committed to devise approaches to counter its rise. These discussions have revolved around coexistence to competition, and containment.
During the Obama administration the emphasis was on economic collaboration with allies through trade deals like TPP (Trans-Pacific Partnership) and emphasis on the military Pivot to Asia. Under the American First doctrine, Trump quickly annulled TPP and increased economic pressure on China. On the other hand, Pivot to Asia has morphed into the Indo-Pacific strategy.
And then there is the Belt and Road Initiative (BRI) that China has launched to reconfigure the world based on its vision – and is perceived as highly threatening by the West. The scientific and technological advancement is another dimension of the risk, such as the next generation 5G technologies. US is vehement in impressing upon its allies to avoid these Chinese technologies as that would create vulnerabilities for the western economic and security alliances.
Weakened America
The increasing tension in the Asia Pacific is a reflection of the COVID-19 related defense and security reassessments that different players are conducting. The perception that China was able to deal with the Coronavirus early on – has reinforced the impression that it has emerged a little unblemished under the changing geopolitical and geostrategic context. On the other hand, the inept handling of the pandemic, followed by inter-racial riots, has created an image that US is imploding and losing its global preeminence. And thus the American allies are recalibrating on how to position and place their bets, while other powers consider what a weakened and inward-focused America would mean for the world.
China-India Border Tensions
If it is assessed that US has indeed been weakened by the Coronavirus, it represents an opportunity for other players to exert and test new scenarios. And this may be what has transpired on the China, India border as it relates to the broader disputed region of Kashmir. However, it was India that triggered the recent action-reaction cycle.
In August 2019, India had revoked the special status of Jammu and Kashmir, granted under article 370 and 35A of the constitution, and divided it into union territories of Jammu and Kashmir and Ladakh. Following the move, India sent additional troops and placed Jammu and Kashmir in a complete lockdown, cut-off telecommunications and Internet, and jailed political leaders. India removed the ‘permanent status’ clause demonstrating it wanted to change the facts on the ground to bring about the desired outcome.
Since revoking the special status of Kashmir, Indian officials repeatedly made claims regarding the Pakistan administered Kashmir, suggesting it was ready to tackle it head on. The neighbors of India wearily looked on these aggressive Indian actions, especially China. To them the message was clear; under the garb of Quad and its strategic alliance with the US, India was trying to change the status of these border disputes in violation of previous treaties and historical understandings.
Why is India Provoking its Neighbors?
The question becomes why is India acting rashly? The nation has recently suffered a series of humiliating setbacks to economically and militarily punish Pakistan for its role in Kashmir.
In February 2019, India claimed to have carried out a preemptive attack inside Pakistan while destroying the terrorist training camp located there. This was after it blamed Pakistan for the Pulwama attack. International media widely discrediting the Indian claims that any such camp was hit in Balakot. Subsequently, Modi government continued the jingoism even in the face of a dogfight with Pakistani jets that resulted in two of Indian fighter planes crashing – and a pilot being captured.
Before this escalation, in 2016 India asserted to have carried out surgical strikes, a term usually reserved for the US in its campaign against extremism, on Pakistan’s side of the Kashmir. These claims were mostly unverifiable. India attempts to link instability on its side of Kashmir with Pakistan supported terrorism, while Pakistan claims it to be a locally supported insurgency against Indian brutality – and recognized by UN as the unsettled business of the 1947 partition.
New Delhi has also been unable to globally isolate and economically marginalize Pakistan, though it made inroads to put distance between Pakistan and its traditional support emanating from the Gulf States. However, Pakistan was mostly able to counter that via China-Pakistan Economic Corridor (CPEC), a major tributary of the BRI. Moreover, despite considerable efforts India was unsuccessful in diminishing the centrality of Pakistan in the Afghan peace process.
All of this is pushing India towards riskier steps and behavior– example being the disastrous step of revoking the special status of Jammu and Kashmir- that possibly led to the deadly June 15^th skirmishes in Galwan Valley with China.
Indian Strategic Narrative and China
As the events unfold, Indian strategic narrative is revealing. It portrays the border skirmishes with China as a consequence of its brazen regional and global policy, which includes Hong Kong and Taiwan. India attempts to link the cause of the clashes with China with the raison d’être for the Indo-Pacific strategy and Quad alliance, which includes US, Japan, and Australia. While this may benefit the full stake membership of India to the Quad, it will make Indian economic outlook less diversified – while firmly pegging its dependence.
For China it is hard to understand why India would continue to undermine its interests while they have considerable convergences. India and China have significant economic stakes with bilateral trade expected to cross $100 billion in 2020. More importantly, they both are members of the club of emerging nations known as BRICS (Brazil, Russia, India, China, and South Africa). India, like Pakistan, is also now a full member of the China and Russia dominated SCO (Shanghai Cooperation Organization).
Despite the convergences, India rattled China by toying with the idea of supporting Taiwan for an observer status in the World Health Organization (WHO) in May. New Delhi has also been contemplating linking Chinese support for Kashmir in the Security Council – to lending more support for Taiwan and challenging the ‘One-China’ policy. Moreover, India has backed calls for WHO to investigate Chinese role in the spread of Coronavirus.
And thus, just like in the US Coronavirus related vilifying of China has impacted the Wall Street and started a larger debate about reorienting the supply chains – India may be heading in the same direction – leading to internal polarization regarding its future outlook.
In changing the status of Ladakh, India miscalculated and seriously provoked Beijing. While India has played macho on border disputes with smaller neighbors like Pakistan and Nepal, China is a different ball game altogether. The Israeli style annexations only work when there is no big party with direct involvement in the conflict. Through its unilateral action on August 2019, India has linked LOC with LAC like never before, and for this it has no one else to blame.
In the aftermath of the present border skirmishes, India may question the efficacy of the Quad alliance and the significance of Russia is likely to be escalated, which Putin will surely leverage against the US. According to the media reports, President Trump is likely to invite Russia, including India, Australia, and South Korea, to the expanded G7 meeting in September. Trump has proposed extending the grouping to G10 or G11 – for dealing with China. President Trump revealed his intentions to invite Russia after Angela Merkel had declined to attend the G7 meeting mentioning Coronavirus concerns. Canada and UK have also resisted the inclusion of Russia. It’s also questionable if Russia would want to play any role to counter China – when it’s one of its closest strategic ally.
Also read:
Examining Saudi-Iran Tensions And Its Impact On South Asia, China
Watch video: PoliTact’s Collaboraion with the Middle East Instutute – Pakistan’s Deepening Involvement in the Gulf

The post China-India Border Skirmishes; BRICS Versus Quad appeared first on Politact.

By Arif Ansar

Context

The international conferences where leading global thinkers and shapers gather to share insights on the present political, technological, and economic challenges, are crucial to observe. Their thoughts processes help to build a narrative and assist the rest to gauge the future direction.

The Davos World Economic Forum, held every year in late January, is just such a venue where political, intellectual, and corporate leaders share their knowledge. This year, it was reflective of the contradictions that the world presently confronts as it relates to the governance structures, the economic and political models, addressing climate change, and harnessing emerging technological advances in a mutually beneficial manner.

In some respects, these kinds of topics are lately been talked about at many other such conferences, but the irony in Davos could not have been starker this year – when the European Union and Europe itself is in the grips of Brexit related confusion. And when the strong influence behind globalization, represented by the US, is adrift, and under increasing nationalist and isolationist policies.

The hard debates took place at the various Davos forums on the corporate role in the present economic woes, and responsibility towards tacking inequality, fixing the climate, and creating more jobs as Artificial intelligence (AI) and Big Data alter how the business will be conducted in the future. The dilemma remains that under globalization, the nation-state model, and state sovereignty, takes more of a back seat – and this is exactly what has resulted in the populist responses such as ‘American First’ or ‘Brexit’.

1. Globalization and Reforms

Consider the statements of Angela Merkel, one of the Keynote speakers at the Davos this year. She emphasized Germany’s commitment to globalization and multilateralism, and reiterated the risks. “There is a new approach that we see in the world today, an approach that harbors doubts as to the validity of the international system,” she stated.

Indirectly countering Trump’s ‘America First’ mantra she added: “I think (that when it comes to) our national interests — I think we should always understand them in such a way that we always remember that others also have their own vested interests, factor them in, and then shape a win-win situation that will guide us in international politics.”

The Chinese perspective was reflected in one of the discussions titled ‘When Global Order Fails’ by Fang Xinghai, who is the Vice Chairman of China’s Securities Regulatory Commission. Xinghai commented that West should not make China a scapegoat for what is not working in the Western democratic system and that reforms were needed to fix those issues, which have nothing to do with China.

Commenting on why US worries about China, Xinghai replied that the US should be open in accepting polities that operate differently, because if they do not, it would mean excluding China, Russia, and pretty soon India as well. Adam Tooze, who is a historian from Columbia University, further elaborated the response. He pointed out to the evolution of Indian democracy under Prime Minister Modi, which does not resemble democratic norms especially when considering its Muslim population.

2. Emerging Technologies and Digital Consensus

The technological upheaval is another aspect of the global flux. Like globalization, the Internet and Internet of Things (IOT), Big Data and AI, work best when there are no hindrances in the way. However, this has great risks and fears associated with it, when knowledge and technology (automation) is replacing traditional sources of labor. It could become, if not already, a new factor that exasperates global inequality.

Quoting McKinsey’s Global Institute (MGI) report ‘Globalization in Transition’, the Managing Partner Kevin Sneader wrote on the company blog:

“…for the first time, the emerging markets now make 50 percent of the counterparts in global trade. While these markets are perhaps more optimistic about growth than many developed economies are, they face their own challenges as knowledge and technology replace labor as the critical sources of arbitrage in global value chains.”

Therefore, the globalists desire a new form of technological consensus to shape the digital future – that balances the state sovereignty with in the globalized structure. Or as Elizabeth Heineman writes in The Conversation:

“Merkel’s – and Europe’s – quandary is this: how to move forward in the digital age when Europe’s contribution is to seek balance between state power, individual rights and the dynamism of capitalism. Achieving that balance – achieving any balance – means slowing things down. It means philosophizing.” Achieving this equilibrium is what Angela Merkel terms Social Market Economy

The Japanese Prime Minister reflected his sentiments on the subject:

“I call on all of us to rebuild trust toward the system for international trade. That should be a system that is fair, transparent, and effective in protecting IP (intellectual property) and also in such areas as e-commerce and government procurement,” Abe stated in his speech.

While there are many international agreements to address security and trade related matters there are no such agreements when it comes to the digital world especially in the realm of Cyber threats, AI and Big Data etc. This is a cause of enormous concern for nations that are competing in these emerging technologies. 

3. Geopolitics and Economics

The tussles of the global balance of power between the emerging and established powers is obviously not just restricted to security affairs, it also includes trade and technology domains. The ongoing economic tensions between the US and China are having a ripple effect downstream with negative impact on globalization.

The primary concern being that by learning and tweaking the laissez-faire system, China is exploiting it and negatively impacting the American economic outlook, as it relates to protection of Intellectual Property and by forced Technology Transfers. Moreover, there is a pressure on China to address the trade imbalances by opening its market more. Obviously if the Chinese economy continues to strengthen at the cost of others, it will also reflect in its global defense posture and influence. 

The other Asian nations are increasingly concerned as US appears to be withdrawing from international regimes, and this they think would only benefit the Chinese. According to them, the best way for the US to address its apprehensions is by staying in the system and by negotiating. Moreover, the debates also continue on the best way to engage each other and address differences.

Multilateral approaches, as adopted by the US in the past, complicate the negotiations. Conversely, the Chinese have benefited by engaging in bilateral tracts, however, in bilateral negotiations the stronger party usually benefits. Nonetheless, US is increasingly moving towards adopting bilateral talks for engaging and negotiating.

Then there are concerns that a Cold War is developing between China and the US and what that would mean for the international system. Will this result in to a new alignment – with other nations being pushed in to one block or the other. A comparison is also being made with the nature of Cold War between the then Soviet Union and US. That Cold War was primarily in the defense and security realm, and not as much in trade, as is the case between US and China now. And just because of this difference, it may not mature in to a full fledge Cold War.

Many of the above dimensions were discussed in an event titled ‘The Geopolitical Agenda,’ moderated by Vali Nasr. The panel recognized that the Belt and Road Initiative (BRI) is changing the geopolitical landscape and in ten years the results will be obvious.

In this context, the Pathfinder and Dow Martin Groups held discussions related to the China-Pakistan Economic Corridor, moderated by the Chairman Pathfinder Group, Ikram Sehgal. The speakers, which included the Chief Minister of Baluchistan province Jam Kamal Khan, promoted investment opportunities in the mineral rich, and strategically located Baluchistan province of Pakistan. The province borders Iran and Afghanistan, where not only the Pakistan-India rivalry is playing out, but also the tussles of the global balance of power.

Conclusion

In many of the discussions referred above, the common worry remained how the US-China trade rivalry is going to unfold and how it will impact different businesses and free trade. However, one could see some confusion in grasping the connection between the economic and security domains.

The optimists thought that because the nature of competition is mainly economic, these differences could be managed. But they miss the point that is raising concern for the US: globalization has made China tremendously stronger very quickly, and this would also translate in to defense and technological wherewithal. After all, the nation-state system, and national interests, still exist and cannot be wished away. 

China preaches engagement and negotiations, and stands ready to address the trade imbalances and grievances, while admitting to the benefits of the liberal trade system. Will this be enough to save globalization remains to be seen. After all, trade wars are linked to the change in the global balance of power. What is particularly worrisome is that US no longer sees eye to eye on these matters with its traditional European allies. Moreover, the Europeans do not have consensus amongst themselves either. At no time since World War II, has the division between the globalists and the nationalists, so acute.

The post Davos 2019, EU, And US-China Trade War appeared first on Politact.

By Arif Ansar

Context

The North Korean crisis has emerged as another serious foreign policy challenge for the Trump administration. And this is happening at a time when his presidency is confronted with a number of difficult issues at the domestic and international front. Normally the American president has considerable discretion when it comes to the foreign affairs front, and they often leverage it when they find themselves on the back foot domestically – to reassert authority.

In this context, President Trump has had to face repeated setbacks in his efforts to repeal the Obamacare health care system, and this happened despite Republicans controlling the House and the Senate. His presidency also continues to be bedeviled by the investigation related the Russian interference in the American election, and the contacts between a number of his close associates with people close to Putin. The appointment of Robert Mueller as a special counsel to oversee the probe looks further ominous.

Reset with Russia was one of the pivots around which Trump’s policy was anchored. However, Trump has been unable to make progress towards this goal. Soon after the July meetings with Putin during the G20 Summit held in Hamburg, Germany, Congress imposed more sanctions against Russia. Putin reciprocated by evicting close to 750 American diplomats from Russia.

On the other hand, review of the Afghan policy is also ongoing but much delayed and there is considerable anxiety in the policy-making circles about this. This has led Senator McCain to announce his own Afghan strategy. The Trump administration also appears to be moving towards nullifying the Iran nuclear deal.

And as if this was not enough, the North Korean crisis has taken a turn for the worst and is impacting US-China affairs. Increasingly, China is being asked to use its influence, if it has any, to control the belligerence of North Korea. Meanwhile, the country has continued its ballistic missile tests. After imposition of additional sanctions against it, North Korea raised the stakes by threatening to launch missiles towards the American territory of Guam.

China, North Korea, and Russia

As these matters unfold, a thinking is developing in the US that if China cannot stop North Korea, then it should suffer the consequences of any military escalation. Meanwhile, as Trump delivered his dramatic ‘fire and fury’ comments, Chairman Joint Chiefs of Staff General Joseph Dunford travelled to China to convey that military solution will only be implemented if political and economic routes to prevent the North Korean regime from developing nuclear tipped ballistic missiles have been exhausted. The crisis seems to have deescalated for now and Kim Jong Un also appears to have put his plans to fire missiles towards Guam on hold.

The collapse of North Korean regime poses a serious challenge for China. It would cause floods of refugees to cross over to China. Moreover, the fall of an ally in the Pacific would be the last thing China would want to see. At the same time, there is the question of what purpose does North Korea serve for China. Could it be that through Kim Jong Un’s rash behavior China is testing the response and will of the US, realizing that the Americans have been military involved for more than a decade in Afghanistan and the Middle East.

The element of ‘testing the US response’ could also have played a role when Russia acted more assertively in Syria and in Europe, especially relating to the affairs of Ukraine and taking over of Crimea. On the other hand, China has up to this point escaped any direct external military involvement, but this may change in the future.

China remains anxious regarding the emerging US policies in the Pacific region, particularly towards Taiwan and the disputed islands of South China Sea. Additionally, China probably draws a parallel to the situation in the Middle East – and whether a regime changes-type formula might be applied to the rash regime of North Korea. Not surprisingly, China has protested the deployment of the THAAD (anti-missile system) in South Korea. The country has also recently increased its involvement in Afghanistan, which represents the other flank for China.

In addition to skirmishes along the Pakistan, India Line of Control, tensions are also building between China and India over their shared border. The armed forces of both nations are face to face since June in the plateau area known as Donglang and Dokhlam. Quoting Indian sources, Reuters recently reported that Chinese forces tried to enter the Indian territory of Ladakh, Jammu and Kashmir State.

China has also built its first military base in Djibouti, located in the strategic Horn of Africa. While the projected focus of this base is primarily geared towards anti-piracy and humanitarian crises related missions, its strategic location will help China monitor its interests in Africa and the Middle East.

When it comes to South Asia, the success of China’s “One Belt One Road” economic initiative, and one of its tributaries is the China-Pakistan Economic Corridor (CPEC) project, is heavily dependent on the security situation of Pakistan and Afghanistan. And the associated Gwadar Port provides China an alternative sea access in case the Strait of Malacca was blocked, and there are rumors regarding militarization of this port at some point in the future.

Conclusion

In this perspective, North Korea helps China, and Russia, balance the affairs of the Pacific, and to counter assertive actions being taken by an alliance represented by India, Japan, South Korea, Australia and the US. In the South Asia region, this balancing role is more and more being played by Pakistan, in particular reference to the affairs of Afghanistan and India. The future of Afghanistan will determine the balance of power in South and Central Asia, and in this regard there are three possibilities:

The first one being, the major powers agree to the right mix of representation in the future Afghan government. The second possibility being that one or the other side wins comprehensively – and then decides the shape of future government in its favor. The third likelihood is reflected by the present stalemate in which no one clearly wins, but the situation continues to drain the powers directly involved.

The post North Korean Crisis, US-Pakistan Tensions, and Afghanistan appeared first on Politact.

How Weak Countries Carrying Economic Significance Become Playground For Foreign Interests

Originally published on June 9, 2009 and being republished with additions. Another modification was made to this article on January 16, 2017.

It is important to understand the present day political, economic, and defense policies of various international actors with the appropriate historical context. After all, in the absence of this relativity, it would be difficult to give meaning to the unfolding events, and predict their future trajectory. Looking at the past often leads to the discovery of historical parallels and analogies making it easier to grasp contemporary paradoxes.

When exploring such parallels, the attempt should not be to spell out every minute detail of the relevance – but to witness the irony of how history repeats and provides continuity, irrespective of if we are aware are not. And then it is up to the intrigue and ingenuity of the reader to draw the necessary connections and lessons.

The Japanese Amau Doctrine provides such a parallel, to make sense of the present-day mega economic projects, such as the Trans Pacific Partnership (TPP), the Transatlantic Trade and Investment Partnership (TTIP), or the One Belt One Road (OBOR) initiative that China has unveiled. And to see how these projects are an example of the present global realignment and shift in the balance of power.

While Amau Doctrine was directed at a weaker China, it is China now that has emerging stronger and is attempting to shape the world affairs. An additional question that comes to mind is that how does the dynamics surrounding Amau Doctrine, described below, helps us understand the future of Europe and European Union, especially in the aftermath of Brexit, and the election of Donald Trump on a nationalist and a protectionist agenda.

The Amau Doctrine is the Japanese equivalent of America’s Monroe Doctrine (1823), which was designed to protect American interests in the Western Hemisphere. The premise of Amau, formulated around 1934, is that Japan reserves the right to act unilaterally in order “to preserve peace and order in East Asia.” The context was the depression of the 30s, when Japan lost a substantial amount of its trade as a result of international trade barriers. The Doctrine was chiefly intended to convert the then feeble China into a client state and to establish Japan as the dominant power in the Pacific while containing Russia, resurgent then as now. For Japan, China was the main source of raw materials, as well as possessing tremendous strategic importance in its struggle with Russia.

In the Amau Doctrine, Japan also declared that China does not have the right to seek foreign assistance or to resist Japan in establishing a new order under the aegis of an East Asian League and furthermore, that any third parties involved in China would have to consult Japan. Historians believe that between 1933 and 1937 two events occurred that made Japan nervous: first, the increased Soviet presence on the Manchukuoan frontier and second, the formation, in 1936, of an anti-Japanese alliance consisting of Chinese Nationalists and Communists, enjoying Soviet support.

In addition, the Amau Doctrine directly challenged the so-called Open Door policy, under which many other powers, including Britain and United States, enjoyed special economic privileges in China. Britain’s China Lobby formulated what was to become England’s China policy in the Far East, which was that the government would safeguard Britain’s economic interests in China, enter into cooperation and competition with Japan and try to establish a China-Japan Detente.

During the 30s, Britain and France wished above all to avoid confrontation with Germany, which lead them to be forbearing with Japan, even in the face of its aggression. Moreover, at a time of global depression many of the big powers wanted to refrain from actions that could injure trade relations with Japan. The latter allied itself with Nazi Germany in 1936, then in July of the following year invaded China. This was followed by the infamous ‘Rape of Nanking’ in December 1937, in which between 250,000 to 300,000 Chinese civilians were massacred by the Imperial Army of Japan. These memories linger and continue to have a negative effect on Sino-Japanese relations.

The American policy towards China was largely the work of the American Asian Association (AAA) and proved less successful in promoting the national interest in China compared to the one devised by its counterpart, Britain’s China Lobby. Historians maintain that another factor was that the United States carried on a relatively small amount of trade with China at the time, in contrast to Britain, which had large merchant and banking houses in Shanghai.

The story of Japan in the 1930’s is pertinent to the current economic crisis in a number of ways. First, its Amau Doctrine emerged in response to a global recession and is an example of how such a catastrophe can impact major players and influence their decision-making. Secondly, weak countries, in this case, China, possessing vast resources and strategic importance, can become the arena where international power struggles are played out.

The post The Relevance Of Japanese Amau Doctrine To Modern Day Mega Trade Pacts appeared first on Politact.

Context

Donald Trump’s decision to nominate the CEO of ExxonMobil, Rex Tillerson, for the position of Secretary of State will have surprised Australians probably as much as anyone else. Whether it is good news or bad news for the Land Down Under is too early to tell, mainly because no one knows Tillerson’s positions on some of the key global issues which he will need to address if — and that’s a big if — he gets Senate confirmation.

However, one thing is definitely sure. Donald Trump’s election win has seriously rattled the foreign affairs and defense community in Australia. It has not only come as a shock but it got political leaders, opinion-makers, and academics pondering as to what this means for Australia.

Unfortunately, because foreign affairs was not a critical issue often debated in the presidential campaign, Australians have very little to rely on to assess what a Trump presidency will mean for the country and ANZUS, the 65-year-old alliance with the United States. Nevertheless, most commentators agree that a Trump administration means that things will not remain the same. The question is how much change will there be.

Analysis

US-Australia Alliance

Australian Prime Minister Malcolm Turnbull was the second world leader whom President-elect Trump called. Reportedly, the conversation went well. Turnbull stressed the importance of global free trade and that Trump should rethink his position about rejecting the Trans-Pacific Partnership (TPP). Unfortunately, Trump’s position on this issue and other trade agreements was a core and consistent policy position during his campaign, and all the good will toward Australia is not about to change this. The good news is that it is unlikely that a Trump administration will want to renegotiate the 2005 U.S.-Australia Free Trade Agreement, as it very much benefits the United States.

Another thing which is almost certain is that Trump will be seeking to have America’s allies around the world contribute more financially to their defense. He has repeated this on a number of occasions on the campaign trail, whether talking about NATO members, South Korea, or Japan. And while he has not specifically singled out Australia on this issue, there will nevertheless likely be a lot of pressure on the Australian government to pull more of its military weight in the region. This will be despite the fact that Australia has excellent bilateral military relations with the United States.

However, in spite of this intimate and long-standing bilateral relationship, the election of Donald Trump has led to a soul-searching debate in Australia about the U.S.-Australia alliance and what it means for the country, particularly on the left of politics. Needless to say, Trump’s unique character and the unusual, outlandish, often offensive, and bizarre things which he said during the presidential campaign have not helped matters. Accordingly, the election of Trump has been grist to the mill of the chattering class which has regularly questioned Australia’s close foreign policy alignment with Washington.

It did not take long following the election of Trump for liberals, progressives, and other fellow ideological travelers to publicly question the alliance and advocate a more independent foreign policy. Yesterday’s political luminaries from the left-leaning Labor Party, such as former Prime Minister Paul Keating and former foreign ministers Gareth Evans and Bob Carr, have been busy advocating that Australia take a more independent line. Keating even went as far as to suggest that Australia “cut the tag” with American foreign policy.

While stressing the importance of continued American engagement in the region, Senator Penny Wong, spokesperson on foreign affairs for the opposition Labor Party, has been echoing the same sentiments, recommending that Australia have an independent foreign policy within the framework of the alliance. This is effectively advocating an à la carte commitment to the alliance: pick the good bits, and reject the not so good ones. I seriously doubt that such an approach would be acceptable to a Trump administration.

The governing conservative parties (the Liberal and National parties), on the other hand, have a less alarmist view of what a Trump administration could mean for Australia and the region. Turnbull was quite positive in his assessment of the Trump victory, stating that “he is a businessman, a deal maker, and he will, I have no doubt, view the world in a very practical and pragmatic way.” The Australian ambassador to the U.S., Joe Hockey,stresses that the Trump people “love Australia.”

Commentators like to refer to an article by two of Trump’s senior advisers on foreign affairs, Alexander Gray and Peter Navarro, to reassure wavering Australians that under a Trump administration the United States “would remain committed in the long-term to its traditional role as guarantor of the liberal order in Asia” and to its “commitment to America’s Asian alliances.” However, despite a campaign promise to increase the U.S. Navy to 350 ships, there is absolutely no guarantee that a President Trump would necessarily hold his ground against an aggressive China. In an interview with the Washington Post in March 2016, Trump said that he didn’t think the United States would go to war over the South China Sea. After all, he has clearly shown his isolationist tendencies, starting with his “America First” campaign slogan.

The Pivot To Asia Policy, China, And Implications For Australia

It would be too easy, but wrong, to compare a talk-tough Trump with President Ronald Reagan, who also spoke about having America respected again by the world and who succeeded another risk-adverse Democratic president. Reagan also significantly built up the Navy and stood up to the Soviet Union. However, the fundamental difference between these two periods is that the USSR by Reagan’s time was in decline and within 10 years had ceased to exist. China, on the other hand, is on the rise, and unless there is a sudden collapse of the ruling Communist party (unlikely), it will become more difficult to militarily counter Chinese aggressive behavior. The question that then arises is whether Washington’s will to stand up to China is greater than Beijing’s drive to contest the maritime space in the South China Sea (SCS) and elsewhere. And this is where Australians get nervous.

It will only be a matter of time before the Trump administration will request that Australia participate in joint Freedom of Navigation patrols in the SCS to challenge China’s 12 mile territorial waters claim around the controversial artificial islands it has created. Australia has been able to avoid participating in such patrols until now. But given Trump’s repeated statements about wanting to see U.S. allies pull their weight, Canberra will no longer be able to duck this one. It’s a decision policymakers would prefer not to have to make. It’s made that much more difficult because of the uncertainly as to how committed would Trump really be in staying in the region. But probably even more important in the decision-making equation is what impact would this have on Australia’s trade with China, which is the destination of 35 percent of Australia’s exports.

Notwithstanding the potential danger of retaliation by the Chinese against Australia’s exports, there is a strong argument to be made for Australia to participate in joint patrols with the United States. Not only would this confirm Canberra’s commitment to the alliance, it would also demonstrate that Australia firmly believes in the principles of freedom of navigation and the rule of law. Moreover, it would reassure the countries of the region that Australia actually stands by its principles and that it can be counted on for military support. Hopefully, this would reduce the risk of countries deciding to switch to China, as the Philippines effectively did recently.

While there is no question of abandoning — at least for the moment — the alliance with the United States and turning to China instead, this very public conversation questioning the value of the U.S. alliance would be very sweet music to the ears of the Communist leaders in Beijing. The more dissent they can cause in the Western camp the better it is for them, and all this without firing a single shot. The Chinese must think they are on a winning streak.

All in all, if to ensure Americans do not withdraw from the region means spending a bit more on defense, then this is a price Australians and other countries in the region should be ready to pay. The consequences of an American drawdown or the ripping up of the alliance, as some more extreme Australian voices advocate, would have far-reaching financial consequences for the Australian treasury. The Australian government would have to double its present commitment of 2 percent of GNP to defense spending to compensate for the loss of American military cover. This would mean other important socioeconomic programs would need to be significantly cut. And this may be a bridge too far, even for some of the more independently-inclined and China-friendly Australians.

This article originally appeared in The Diplomat.

The post The Impact Of Trump’s Victory On US-Australia Alliance, Pivot To Asia appeared first on Politact.

Context

APEC and ASEAN are the two main bodies facilitating cooperation between nations of the Asia Pacific region. This article seeks to stipulate the main differences in the two organizations and also to analyze the cause of rising tensions over the future of APEC and how major stakeholders are seeking to influence its evolution. Pakistan’s outlook in the region will be looked at in the context of PoliTact’s previous article on India’s Looks East Policy.

Analysis

APEC

APEC is the Asia Pacific Economic Community, established in 1989 to help facilitate the growth and community of ‘member economies’. There are 21 member economies (countries) today, with the original 12 countries consisting of the US, Australia, Canada, New Zealand, Japan, Indonesia, Singapore, Malaysia, Brunei, Thailand, the Philippines and the Republic of Korea. Since then, Chile, Peru, Mexico, China, Russia, Vietnam, Hong Kong, Papua New Guinea and Chinese Tai Pei have joined.

APEC’s basic goals are to work towards tariff reduction and reduction of other trade barriers between member economies in order to promote efficiency in domestic markets, and to increase exports of member economies. Less enthusiastically, APEC is also concerned with the free movement of people between member economies-however this is a bone of contention within the organization, given that it has such wealth disparities present between member economies.

Member economies of APEC account for over 50% of world GDP, and over 40% of the world’s population.

ASEAN

ASEAN is the Association of South East Asian Nations, created in 1967 with a much narrower charter than APEC, and only five founding members: Thailand, Indonesia, Singapore and the Philippines. Today there are 10 members of ASEAN, with Brunei, Cambodia, Laos, Vietnam and Myanmar joining at various stages between 1984 and 1999.

ASEAN is much more focused on regional stability and community with initiatives involving education, cultural exchanges, research and technological advancement. Economic interests are of course a part of ASEAN; however they are far less articulated than in APEC.

In 1997 ASEAN + 3 was formed, including the regional powerhouses of China, Japan and the Republic of Korea into the ASEAN fold. The +3 members are not considered full ASEAN members, but partake in similar activities as between the ASEAN members themselves. On top of the ASEAN+3 members, ASEAN as a regional body has dealings with other non-member states in the Asia Pacific region, these include the US, Russia, Australia, Canada, India, New Zealand and Pakistan. Inter-organizational relationships are also present between ASEAN and the EU and UNDP.

ASEAN and APEC both figure prominently in the region, however APEC is marked for being the organization which can, if any can, bring an Asia Pacific community into being. While comparisons with the EU are inevitable, they can never be more than passing comparisons because of the vastly different historical, cultural and economic make-ups of the two organizations. APEC is unique in that it seeks to make community where little common history and culture exists-the nations of Chile and Japan will never share the same kind of bond that countries of the EU share, simply because they have not be forged in a common historical furnace. APEC has found commonality in its member countries via economics.

The future of APEC is widely contended, even between member economies. For China, the current, non-binding and voluntary nature of the organization is perfectly suitable for its needs, and China has expressed a desire that the ‘APEC Approach’ continue in its current course. The benefits China has derived from being a member of APEC are manifold, and include the development of over 14 bilateral FTAs since becoming a member. Japan on the other hand, partly because of the Chinese economic domination in the region is pushing for a more institutionalized and enforceable set of governing principles for the organization. Prime Minister Hatoyama of Japan has expressly stated the APEC as an institutionalized regional economic body should be put ‘firmly into place’-an agenda that he will be pushing as the APEC host in 2010.

The US shares this view with Japan to a certain extent-APEC has the distinction of being the only regional economic organization of significant size the US is a member of-with 60% of the US’s export heading to APEC member economies, the US wants, nay needs APEC to become the primary regional body for the Asia Pacific, since it is excluded from the majority of other regional organizations. The US is in direct opposition to China, in that the so called ‘noodle bowl of agreements’ that has served China so well, is seen as an obstacle for US interests in the region. The US doesn’t necessarily share the vision of an all-encompassing community as hinted at by Australian Prime Minister Kevin Rudd, or even Japan’s more integrated vision-the US desperately wants APEC to become a Free Trade Area, so that the more than 150 bilateral FTAs signed between APEC members and other regional nations (to the exclusion of the US) are subsumed under the overarching APEC Free Trade Area.

Pakistan is looking at being on the fringe of an increasingly integrated Asia Pacific-as discussed in a previous analysis of India’s Look East Policy, Pakistan is somewhat isolated from the member states of this region due to India’s industrious alliance building. That being said, China remains a friend to Pakistan, and the US is bound up in Pakistan with the ‘War on Terror’. Pakistan is in the duplicitous position of being comparatively smaller importance economically, but being of central importance to regional security and even global security matters.

India has been denied membership to APEC, despite support for inclusion by the US, Japan and Australia-a primary reason being that it does not border the Pacific-a founding logic of the organization. Its hopes are better places within ASEAN, but both Indian scenarios paint a dim picture for Pakistan with the future of either organization. China’s vision of APEC is the one that will be most in Pakistan’s favor, as any solidifying of regional community will most likely be to the exclusion and detriment of Pakistani interests in the region.

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