What’s in a Name?: Strategy Behind the “Indo-Pacific”

Throughout his tour of Asia in November 2017, U.S. President Donald Trump repeatedly referred to the region through which he travelled not as the “Asia-Pacific,” but rather as the “Indo-Pacific.”  While other American presidents have spoken of the “Indo Pacific” before, they did so infrequently. Trump’s continuous use of the term prompted some to speculate whether it offered a clue to the future of American strategy in the region.

Only a week later, Australia released a new white paper that embedded the term “Indo-Pacific” into its broad foreign policy objectives. The white paper made mention of the “Indo-Pacific” 74 times and the “Asia-Pacific” only four times. In contrast, Australia’s prior foreign-policy white paper, published in 2003, mentioned the “Asia-Pacific” 26 times and the “Indo-Pacific” not at all. Clearly, policymakers have intended the term to hold some deeper meaning.[1]

You Say “Asia-Pacific,” I Say “Indo-Pacific”

What does the term “Indo-Pacific” convey that the term “Asia-Pacific” does not? It conveys a wider view of the region to include the Indian subcontinent and, specifically, India. Why include India? Most likely it is because incorporating a country of India’s size and significance into the traditional conception of the Asia-Pacific region would help to balance the growing economic and military heft of China in it.

That makes sense, given that Australia, Japan, and the United States have already brought India into their Asian security discussions. Back in 2007, Japanese Prime Minister Shinzō Abe first suggested formalizing such a multilateral collaboration through what he called the Quadrilateral Security Dialogue. He hoped to bring together Asia’s four liberal democracies to promote their shared security goals. At the time, the concept fizzled for fear of alienating China. But that apparently is less of a concern today. With the rise of Chinese assertiveness, the four countries have begun to participate in joint military exercises all along Asia’s periphery. Since 2014, India, Japan, and the United States have conducted annual naval exercises from the Bay of Bengal to the Western Pacific. And, since 2015, Japan has joined the biennial Australia-U.S. military exercise called Talisman Saber.

Indo-Pacific Security Relationships

Still, for the moment the Indo-Pacific region’s only formal security alliances are the bilateral ones that link the United States with Australia, Japan, the Philippines, and South Korea in what some have described as a “hub-and-spokes” arrangement. The United States also has long-standing security relationships with Singapore, Taiwan, and until recently, Thailand. All other regional security ties are fairly nascent, including the one between Australia and Japan. Though both countries seem drawn to one another, their bond is not yet strong. Seen in that light, Australia’s recent decision to abandon a Japanese design for its future submarine fleet was probably a missed opportunity to reinforce that bond.

Meanwhile, India, which leaned towards the Soviet Union for much of the Cold War, has a relatively new security relationship with the United States. It was not until President George W. Bush orchestrated a civil nuclear deal with India, which implicitly recognized its nuclear weapons status in 2005, did that relationship really start. And even then, it did not grow quickly. Many Indians, including former National Security Council military advisor Prakash Menon and the former foreign secretary Shyam Saran, had reservations. In 2012, they, along with some notable Indian security experts, penned a strategy paper entitled Nonalignment 2.0 that downplayed the importance of stronger ties with the United States.[2]

Since then, however, China’s growing pressure on India’s borders and influence among India’s neighbors have made Indian leaders less concerned about India’s distance from the United States and more interested in finding common cause. As a reflection of that, India—once an exclusive Russian arms importer—has begun to acquire American military equipment and to consider Japanese ones, too. Australia specifically cited its interest in “much closer” ties with India in its recent foreign policy white paper.[3]

Indo-Pacific Encirclement of China?

For years, Chinese strategists have chafed at what they regarded as the geopolitical encirclement of China. But the number of such commentaries seems to have fallen over the last year or so. Perhaps that is because China has strengthened its relationship with Russia and made diplomatic headway in Southeast Asia. Or perhaps that is simply because China feels more powerful than it was. Ironically, China would have more reason to feel encircled today, if the other major Indo-Pacific powers choose to revive something akin to the Quadrilateral Security Dialogue.

What’s in the name “Indo-Pacific?” The answer, in this case, might be a strategy for balancing Chinese power in the region.


[1] Australia Department of Foreign Affairs and Trade, The Commonwealth of Australia’s 2017 Foreign Policy White Paper, Nov. 2017; and Australia Department of Foreign Affairs and Trade, Australia’s Foreign and Trade Policy White Paper, 2003.

[2] Sunil Khilnani, Rajiv Kumar, Pratap Bhanu Mehta, Prakash Menon, Nandan Nilekani, Srinath Raghavan, Shyam Saran, and Siddharth Varadarajan, Nonalignment 2.0: A Foreign and Strategic Policy for India in the Twenty First Century (New Delhi: Centre for Policy Research, 2012).

[3] Australia Department of Foreign Affairs and Trade, The Commonwealth of Australia’s 2017 Foreign Policy White Paper, Nov. 2017, p. 42.

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Sweden’s Foreign Policy: Nonaligned, But Not Entirely Neutral

In late 2014, Swedish authorities spotted what many suspected was a Russian submarine lurking off Stockholm. The incident set off alarm bells among Swedes. It reminded them of a similar incident in 1981, when a nuclear-armed Soviet Whiskey-class submarine ran aground a few kilometers outside Sweden’s main naval base.[1] Following Russia’s invasion of Georgia, annexation of Crimea, and intervention in eastern Ukraine, the recent submarine scare served to underline the threat that a resurgent Russia could pose to Sweden.

No wonder that, despite Sweden’s long tradition of neutrality and an “alliance-free” foreign policy, Swedish leaders of almost all political stripes began to consider closer ties with NATO. That of course irked Russia. Victor Tatarintsev, the Russian ambassador to Sweden, responded with what seemed like a backhanded reassurance that Russia had “no plans to invade Sweden.” In May 2017, Russian President Vladimir Putin put it more bluntly. He warned that if Sweden joined NATO, Russia would take military measures “to eliminate [the new threat].” While Swedish Foreign Minister Margot Wallström clearly stated that her government would not seek NATO membership, Sweden has moved closer to the Alliance. NATO naturally welcomed the shift, given Sweden’s strategic importance to NATO’s defense of its Baltic member countries.

Sweden’s National Interest in the Baltic Sea

Observers have long described Sweden’s security policy as “non-participation in military alliances during peacetime and neutrality during wartime.”[2] But that does not mean that Sweden takes its security environment lightly, especially when it comes to the Baltic Sea. For centuries, its waters have been a thoroughfare for not only trade, but also power projection. Should unfriendly forces control it, they could easily threaten Sweden and even reduce its access to the wider world. Hence, Sweden has had an enduring national interest in the security of the Baltic Sea and the coast beyond.

Armed Neutrality

Throughout the Cold War, the Soviet Union controlled the Baltic coast. Because of that, Sweden kept up its guard. It maintained a sizable standing military and nurtured a world-class defense industry. That attention to military preparedness has had a long history in Sweden where a popular nineteenth-century slogan proclaimed: “one man, one gun, one vote.”

After the Cold War, Sweden cut its defense expenditures. But the advent of an aggressive Russia across the Baltic Sea has led Sweden to rethink its military posture. In September 2017, it raised its defense budget by five percent over its already planned increase. It also recently reinstituted conscription to bring its military back to full strength. Starting in 2018, it will conscript 4,000 18-year-olds. That number will rise to 8,000 per year by 2022. Sweden still has more to do. Apart from the 60 JAS 39E fighters and two A26 diesel-electric attack submarines already on order, Sweden will need more and newer armaments for its soon-to-be larger armed forces.

Even so, Sweden has begun to strengthen its defenses on Gotland, a strategic island in the Baltic Sea. Contrary to reports in 2016 that reestablishing a permanent military presence on Gotland was unexpected, Sweden’s Defence Policy white paper—which all of Sweden’s major political parties agreed to in 2015—outlined Gotland’s rearmament as part of a broader set of security precautions that Sweden would take through 2020.[3]

New Normal for Swedish Neutrality

While it is perfectly understandable why neutral Sweden has felt the need to be better armed, what is unusual is how enthusiastically it has embraced multilateral defense cooperation. Roughly a decade ago, Sweden joined the European Union’s (EU) Common Security and Defence Policy and led the effort to create the EU’s 2,400-man Nordic battlegroup. Soon after, it helped to establish the Nordic Defence Cooperation, which brought together five Nordic countries, including two NATO members.

Recently, Sweden has stepped up its collaboration with NATO. It signed a host-nation agreement that allows NATO forces to train in Sweden and boosted its participation in NATO military exercises, like Baltic Operations (Baltops) and Steadfast Jazz. Sweden has gone so far as to commit a fighter squadron to fight alongside NATO’s rapid-reaction force.

Sweden is also shedding its long-time aversion to a bilateral military relationship with the United States. The number of meetings between Swedish defense ministers and U.S. secretaries of defense has noticeably risen, from an average of once every two years over the last decade to twice a year in 2016 and 2017. During Swedish Defense Minister Peter Hultqvist’s visit to the Pentagon in May 2017, he announced not only Swedish participation in NATO’s Baltops 2017 exercise in June, but also the involvement of about 1,000 U.S. troops in Sweden’s largest military exercise in 23 years. Over 20,000 troops from nine countries (seven of them NATO members) took part in the exercise, called Aurora 2017, which spanned three weeks in September and focused on the defense of Gotland.

Seeking Partnerships, Not Alliances

Swedes—ever conscious of their cherished neutrality—have long opposed their country joining multilateral defense organizations, like NATO. But fewer of them do so than before. A national poll found that a slim plurality of Swedes favored membership in NATO for the first time in 2014.[4] While opinions of the public slipped back the other way two years later, those of Swedish leaders did not. Most now believe that Sweden needs to form stronger partnerships, though not alliances, with NATO and the United States. From their perspective, the real question is how Sweden can translate those partnerships into greater security without formal defense treaties.

Such partnerships bring Sweden close to breaching its traditional neutrality and “alliance-free” foreign policy. Someday, it may be forced to choose one approach over the other. In the meantime, Swedish leaders will continue to wrestle with what it means for Sweden to be a partner, but not an alliance member—to be nonaligned, but not entirely neutral either.


[1] Milton Leitenberg, “The case of the stranded sub,” Bulletin of Atomic Scientists, Mar. 1982, pp. 10-13.

[2] “Sweden: Scene-Setter for Prime Minister Reinfeldt’s May 15 Visit to Washington,” May 4, 2007, WikiLeaks, WikiLeaks cable: 07STOCKHOLM506_a.

[3] Government Offices of Sweden, Sweden’s Defence Policy, 2016-2020, Jun. 1, 2015.

[4] Pütsep Mona and Ryen Linda, Opinioner 2016: Allmänhetens syn på samhällsskydd, beredskap, säkerhetspolitik och försvar (Karlstad, Sweden: Civil Protection and Emergency Agency, Jan. 2017), p. 75.

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Sweden’s Importance to NATO’s Defense of the Baltics

Sweden is not a member of NATO. But Sweden is very important to the defense of NATO’s Baltic member countries of Estonia, Latvia, and Lithuania. That importance mainly stems not from what Sweden could add to NATO’s collective military strength, but from how its strategic position could help NATO overcome the operational challenges it would face if it needed to respond to a Russian invasion of the Baltics.

Strategic Position in the Baltic Sea

Spanning the length of the Scandinavian Peninsula, Sweden’s geography dominates much of the Baltic Sea, a fact that NATO has long appreciated. Early on in the Cold War, NATO recognized that Sweden could serve as a valuable location for early warning facilities to monitor the Soviet Union in peacetime and for combat aircraft to interdict Soviet lines of communications across Germany and Poland in wartime.

Sweden took on a new relevance for NATO after Estonia, Latvia, and Lithuania joined the Alliance in 2004. With tiny military forces of their own and large Russian military forces on their borders, the three Baltic countries are highly vulnerable. Russia could easily sever their air and land connections to the rest of NATO and capture all three countries—a prospect that could jeopardize the very existence of NATO. Thus, NATO holds annual exercises called Baltic Operations (Baltops), in part, to practice reinforcing the Baltics by sea. But, in a conflict, Russian strike aircraft and coastal defense missile batteries based near Kaliningrad could interdict such seaborne reinforcements before they ever reached the Baltics. (See Map.)

Sitting astride of NATO’s most likely reinforcement route, Sweden could mitigate many of Russia’s military advantages. That is what makes Sweden so important to NATO. Were Sweden to allow NATO reinforcements to sail through its territorial waters, NATO could halve the distance over which its reinforcements would be exposed to Russian air and missile attacks between Denmark and Estonia. Theoretically, Stockholm could even allow NATO to safely transport its troops and supplies over land to Sweden’s east-coast ports before they embarked for an amphibious assault across the Baltic Sea.

Got Land?

Sweden also controls Gotland, an island situated in the middle of the Baltic Sea. Gotland is strategic because it is an ideal location from which to defend forces moving through the Baltic Sea or to project power into the Baltics. Though primarily seen today as a holiday destination, it has been prized for its strategic location for centuries. During the Cold War, Sweden stationed a reinforced armored brigade, fast attack craft, and a fighter squadron on Gotland to defend it. While all of those forces have since been deactivated or dispersed, Russia’s recent aggressive behavior prompted Sweden to reestablish a permanent military garrison on Gotland in 2016.

NATO also sees the value of Gotland. At a minimum, the island could complicate Russian anti-ship cruise missile strikes on NATO reinforcements sailing to the Baltics. But if Swedish cooperation with NATO were to increase, NATO air forces could use Gotland’s airfields to fend off Russian air and missile attacks as well as provide air support for NATO military operations in the Baltics. Gotland’s main port of Visby could even serve as a logistical hub for NATO forces fighting in the region.

On the other hand, Sweden could also help NATO by simply defending its territory from Russian incursions during a conflict between NATO and Russia. Doing so would constrain Russian freedom of action in the Baltic Sea. If nothing else, denying Russia use of Gotland would prevent it from not only making any seaborne reinforcement of the Baltics extremely difficult and thus narrowing NATO’s operational options, but also threatening the Baltic coasts of Germany and Poland behind NATO’s frontline.

Sweden in NATO?

Though not a member of NATO, Sweden is important to NATO’s defense of the Baltics.

Swedish cooperation with the Alliance would make protecting the Baltics easier and thereby strengthen NATO’s security guarantee to its member countries. That, in turn, would improve NATO’s ability to deter Russian aggression in the region.

Meanwhile, some have begun to speculate whether Sweden would shed its longtime “alliance-free” foreign policy and join NATO. But Swedish Foreign Minister Margot Wallstroem has dismissed such speculation. She cautioned that NATO membership “would expose Sweden to risks, both political and otherwise” which her government was not willing to bear.[1]

Still, over the last decade, Sweden has taken a more active role in Nordic and European Union defense arrangements, many of whose members are also NATO members. Moreover, Sweden has stepped up its direct military contacts with NATO and the United States. While NATO membership may be off the table for Sweden, it would appear that Sweden has come to believe that NATO’s interest in deterring Russian aggression is very much in its own national interest, too.


[1] Damien Sharkov, “Putin Vows Military Response to ‘Eliminate NATO Threat’ If Sweden Joins U.S.-Led Alliance,” Newsweek, June 2, 2017, http://www.newsweek.com/vladimir-putin-vows-eliminate-nato-threat-sweden-joins-619486.

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Russia’s Existential Threat to NATO in the Baltics

NATO seems more united today than it has been at any time since the end of the Cold War. An aggressive Russia, unbowed by Western economic sanctions after its annexation of Crimea and intervention in eastern Ukraine, has driven NATO member countries closer together. However, if given the opportunity, an aggressive Russia could also put NATO in a position that could strain its cohesion and ultimately undermine its existence. One place where that could happen is in the Baltics states of Estonia, Lithuania, and Latvia.

Bigger, Not Necessarily Stronger

As part of NATO’s eastward expansion after the Cold War, the Baltic countries joined the Alliance in 2004. But geographically separated from nearly all of NATO and having small militaries, the Baltics have always been vulnerable. From the start, military planners understood that NATO would have to commit substantial resources to properly defend the region from a Russian invasion.

At the time, NATO’s European governments were unconcerned. Russia, they believed, no longer posed a real threat. So, rather than make the costly outlays needed to protect the Baltic states, they cut their defense budgets. It was little surprise, then, that Europe’s conventional military forces saw their numbers and combat readiness fall. Today, France, Germany, and the United Kingdom would each be hard pressed to rapidly deploy a single combat-ready armored brigade. NATO’s reduced fighting capacity was also evident in its air campaign over Libya in 2011. After less than a month of combat, European air forces ran short of precision-guided munitions.

Moreover, given how easily Russia could sever the land and air routes into the Baltics, one might have expected NATO to have boosted its amphibious capacity in case it needed to send reinforcements across the Baltic Sea. Instead, NATO’s combined sealift capacity, excluding U.S. amphibious forces, has fallen to such a low level that it can ferry little more than two infantry brigades. Even worse, almost all of that capacity is based far from the Baltic Sea. And even if NATO could transport those brigades to the Baltics (through what might be a gauntlet of Russian air and missile strikes from Kaliningrad) it is doubtful whether they would be enough to stop a mechanized Russian invasion.

Peril of the Interregnum

Should NATO prove too unprepared to help the Baltics, Russia could achieve a quick victory. That would mean that NATO would have to mount a counteroffensive to liberate the region in order to fulfill its treaty obligations. But before it could do so, the Alliance would need time to fully mobilize its armed forces. During that interregnum, between Russia’s victory and NATO’s counteroffensive, NATO leaders would have time to contemplate what was to come.

They would have a lot to consider. Since the only land route into the Baltics runs through the 100-km wide Suwalki Gap, a narrow corridor between Lithuania and Poland, NATO ground forces would have little choice but to mount a frontal attack. Massed Russian artillery could turn the gap into a killing zone. Meanwhile, Russia’s coastal defense batteries and attack helicopter battalions could inflict heavy losses on any amphibious assault.

The conflict could also escalate beyond the Baltics. As a prelude to any counteroffensive, NATO commanders would naturally want to use their air power to attrit Russian forces and logistical capacity as well as suppress Russia’s supporting artillery, air defense, and coastal defense batteries. That would require strikes against targets on not only Baltic soil, but also possibly Russian soil. Moscow could seek reciprocity. It could launch air or missile strikes on similar targets in Western Europe and the United States. Russia could even escalate to a nuclear confrontation. In effect, it could thrust upon NATO leaders the decision: “Is Tallinn worth Berlin?”

Ultimately, the near certainty of high casualties, the uncertainty of battlefield success, and the possibility of a wider war might cause NATO leaders to think twice about liberating the Baltics. Russian information operations would likely exacerbate those concerns to sow doubt and division within NATO countries. If NATO leaders were to hesitate during the interregnum and agree to a settlement that left any part of the Baltics in Russian hands, then no NATO member could fully trust NATO’s security guarantee again. The rationale for NATO would be lost and its future existence put at risk.

The Tripwire Fix

NATO faced a similar danger during the Cold War. At that time, the Soviet Union and its Warsaw Pact allies had amassed such enormous conventional forces that they threatened to overwhelm those of the Alliance. Observers wondered whether the United States would risk a nuclear confrontation with the Soviet Union if it quickly occupied Western Europe. The question put to American leaders was: “Is Bonn worth Washington?” NATO responded by stationing large U.S. military forces close to the frontline, in part, to act as a tripwire. They would incur the first casualties of any Soviet invasion. Those losses would bind the United States and its nuclear arsenal to the defense of Western Europe, and thus deter the Soviet Union from invading it in the first place.

NATO appears to be trying a similar tactic in the Baltics states. For years, NATO has rotated tiny military contingents through the region. But over the last year, their sizes have grown. Currently, a German-led battle group of 1,000 soldiers is in Lithuania. Later this year, a Canadian-led battle group will be in Latvia and a British-led one will visit Estonia. Though still too small to stop a Russian invasion, they could serve as a tripwire to bind the rest of Europe to the defense of the Baltics. However, that only works if NATO can prevent Russia from achieving a quick victory, since the prospect of a costly counteroffensive could still render NATO’s tripwire ineffective.

Conclusion

To reliably avoid Russia’s existential threat, NATO must ensure that Russia is unable to score a quick victory in the Baltics. That requires NATO members to pledge more than words of resolve. That requires more resources for more troops, better equipment, and, above all, higher combat readiness.

Most exposed to the Russian threat, NATO’s Eastern European members are leading the way. Poland created a new Territorial Defense Force of reservists who will number 53,000 in two years. It also ordered 128 upgraded Leopard 2PL main battle tanks.[1] All three Baltic countries have acquired new light armored vehicles. Better yet, they are beginning to acquire the firepower needed to slow a Russian advance. Lithuania recently bought PzH2000 self-propelled howitzers, and Estonia is in discussions to purchase K9 long-range artillery.[2]

The rest of NATO needs to do the same. After all, one of the key reasons why NATO was so important in the most successful unfought war of the last century, the Cold War, was because its member countries were conscious to brook no ambiguity about the Alliance’s combat readiness to take on its main adversary.


[1] Remigiusz Wilk, “Polish Territorial Defence Force expanded to 53,000 personnel,” Jane’s Defence Weekly, Nov. 17, 2016; Remigiusz Wilk, “Poland orders 128 upgraded Leopard 2PL main battle tanks,” Jane’s Defence Weekly, Jan. 4, 2016.

[2] Nicholas de Larrinaga, “Estonia begins K9 artillery negotiations with South Korea,” Jane’s Defence Weekly, Feb. 7, 2017; Nicholas de Larrinaga, “Lithuania receives first PzH 2000 howitzers,” Jane’s Defence Weekly, Jun. 28, 2016.

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NATO’s Baltic Defense Challenge

As NATO expanded eastwards after the Cold War, the geography that the Alliance needed to defend changed significantly (See map). Rather than a relatively narrow front in Central Europe (dashed line), NATO now had to contend with a far wider front across Eastern Europe (solid line) stretching its defense capabilities. When the Baltic countries of Estonia, Latvia, and Lithuania joined the Alliance in 2004, they created an even greater operational challenge for NATO.

Lay of the Land

Sitting on the Alliance’s eastern edge, all three Baltic countries border Russia, NATO’s most likely adversary. But only one, Lithuania, is connected to any other NATO country. Lithuania’s border with Poland, just 100 km wide and with a single highway running through it, forms a bottleneck that NATO planners call the Suwalki Gap (named after a nearby Polish town). Worse still, on one side of the gap is Kaliningrad, a large Russian military enclave, and on the other side is Belarus, a close Russian ally.

Figuring out how to overcome that problematic geography became more pressing for NATO after 2007, when Russia suspended its participation in the Conventional Armed Forces in Europe treaty, which had limited the number of troops and equipment that NATO and Russia could station in continental Europe. Since then, Russia has steadily strengthened its military forces across its western regions, including Kaliningrad. One recent study estimates that if Russia were to invade the Baltics today it could mobilize 25 battalions of armor, airborne, and mechanized infantry (supported by ten battalions of artillery, six of attack helicopters, and five of short-range ballistic missiles). By contrast, the Baltic countries could field only 11 battalions of light infantry, most of which are reserve units.[1] Plus, without any fighter aircraft of their own, Baltic forces would be completely exposed to Russian air power.

Clearly, without NATO support, the Baltics could offer little serious resistance to a Russian invasion. From St. Petersburg, a Russian column could advance into Estonia to seize Tallinn. From Pskov, another column could advance into Latvia to take Riga and pivot south into Lithuania.[2] Simultaneously, Russian forces in Kaliningrad could seal off likely avenues for NATO reinforcements. A Russian thrust toward Marijampolė would close the Suwalki Gap and another toward Klaipėda would close NATO’s most accessible Baltic port. To ensure battlefield success, Russia could use its strategic reserve of airborne and Spetsnaz forces.

From the Sea

Should Russia sever the land and air routes into the Baltics, NATO may be forced to send its reinforcements across the Baltic Sea. However, doing so would face serious hurdles. First, NATO lacks enough military sealift to transport the volume of troops and equipment necessary to stop a Russian assault. As a work-around for its sealift shortage, NATO could commandeer car ferries and other civilian shipping. But NATO could not as easily work around the threat of Russian long-range anti-ship cruise missiles. Launched from K-300P Bastion-P coastal defense batteries in Kaliningrad, such missiles could inflict heavy casualties on any NATO reinforcements.

Since the U.S. Navy would not likely want to expose an aircraft carrier battle group to such a threat in the confined waters of the Baltic Sea, the job of escorting NATO’s troop transports would then fall on smaller warships with less sophisticated anti-ship cruise missile defenses. That could put already scarce troop transports at higher risk.

Even worse, if Russian forces were to capture all the ports in the Baltics, NATO might have to mount an amphibious assault to reestablish itself on land. That would be difficult to pull off, despite the spectacle of NATO’s Baltic Operations (Baltops) exercises. Amphibious assaults have never been easy; but they are even more difficult today, given that modern precision-guided munitions could make short work of landing craft, helicopters, and even MV-22 aircraft.

Conflict Escalation

Given the potential for Russia to interdict their seaborne forces, NATO commanders would naturally want to suppress Russian coastal defense batteries. After all, a successful missile strike on a single transport could result in the loss of hundreds of troops and their equipment. Multiple missile strikes could swiftly sap the combat strength of any NATO relief force.

At first glance, the suppression of Russian coastal defense batteries (and the air defense systems protecting them) would appear to be a straightforward affair. NATO air forces based in Germany and Poland could easily reach and strike Russian positions in Kaliningrad. However, were NATO air forces to do so, they would be hitting targets on Russian soil. That, in turn, could prompt Russia to expand the conflict beyond the Baltics. NATO could expect retaliatory Russian strikes on its German and Polish air bases.

In addition, one could reasonably expect NATO commanders to want to stem the flow of Russian forces and supplies into the Baltics, either to slow a Russian invasion or as a prelude to a NATO counteroffensive. To be most effective, that would require NATO strikes on Russian logistical facilities near St. Petersburg and Pskov. Such strikes would hit targets deep into Russian territory. That could also prompt Russia to escalate. It could launch retaliatory strikes against NATO logistical facilities in Antwerp, Hamburg, and Rotterdam. Russia could even use submarine-launched land-attack cruise missiles to hit targets in the United States, like Naval Station Norfolk or Pope Air Force Base, which normally support U.S. operations abroad.

Ultimately, Russia could threaten to use nuclear weapons. Indeed, in 2016, Russia moved Iskander 9K720 intermediate-range nuclear-capable missiles into Kaliningrad.[3] It may have done so, in part, to ensure that NATO leaders think twice before attacking targets there, since a strike on Russian nuclear forces could quickly escalate into a nuclear confrontation. In any case, even if armed with conventional warheads, those missiles could hit and devastate targets as far away as Germany.

Conclusion

The best way for NATO to overcome its operational challenge in the Baltics is to make sure it never manifests itself. To do that, NATO must convince Russia that it could not achieve a quick victory in the region. Already NATO has rotated small air and ground detachments through the Baltic countries to stiffen their defenses as well as to create a tripwire to guarantee a forceful NATO response in case of a Russian attack.

But more needs to be done before Russia is really convinced. Forward-deployed NATO battle groups need to be stronger—strong enough to hold open avenues for NATO reinforcements. Moreover, NATO countries need to revive their conventional war-fighting capabilities and maintain them at a higher state of combat readiness than they do now. Finally, NATO forces need to be able to react more quickly to Russian actions. That means Western governments need to give NATO’s commander the authority to not only put their national military forces on alert, but also order them into the field for limited periods. In short, NATO should, once again, adhere to the old aphorism that “if you want peace, prepare for war.”


[1] David A. Shlapak and Michael W. Johnson, Reinforcing Deterrence on NATO’s Eastern Flank: Wargaming the Defense of the Baltics (Santa Monica, CA: RAND, 2016), pp. 4-5.

[2] Should Belarus allow them to do so, Russian forces could also pass through Belarusian territory to advance on Vilnius from Minsk.

[3] Brooks Tigner, “Kaliningrad becoming a more dangerous military threat for NATO, say officials,” Jane’s Defence Weekly, Nov. 10, 2016.

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Effectiveness of Economic Sanctions on Russia’s Economy

In early 2015, Western leaders thought they had Russia cornered.  A year earlier they imposed on Russia economic sanctions, which ranged from restrictions on access to Western capital markets to bans on the export of oil-production technology, to punish it for its role in dismembering Ukraine.  Those sanctions and the Russian boycotts that followed threw Russia’s economy into turmoil.  With some justification, President Barack Obama declared that “Russia is isolated with its economy in tatters” in January 2015.  But two years later, Russia has stabilized its economy, annexed Crimea, and kept its “little green men” in eastern Ukraine.  What went awry?

Peak Pain

In financial terms, Russia felt the most damaging impact of the West’s economic sanctions within the first year of their imposition.  Suddenly, Russian companies, holding dollar and euro-denominated debt, had to repay their loans without the ability to refinance them.  Russian banks targeted by Western sanctions saw their overseas assets frozen.  That created a cash crunch.  Many companies were forced to suspend operations and slash jobs; some even required government capital injections to survive.  But they did survive.

Commodity Price Stabilization

Unfortunately for Russia, the West’s economic sanctions coincided with a steep drop in global oil prices.  That, more than anything else, exacerbated Russia’s economic woes, since much of the country’s economy depends on the production of commodities, primarily oil.  Oil prices plummeted from over $100 per barrel to under $35 per barrel in late 2015.  But then they began to recover the following year.  So too did the prices of other major commodities that Russia produces, including iron, aluminum, and copper.  No doubt global economic growth, which boosted commodity prices, helped Russia to better ride out Western sanctions.

Floating Currency

But the stabilization of commodities prices did not save Russia’s economy.  With economic sanctions darkening the country’s outlook, the value of the Russian ruble was cut in half.  At first, Russia’s central bank tried to defend it, consuming $200 billion in foreign exchange reserves in the effort.  But ultimately, Russia’s central bank took a leaf from the International Monetary Fund’s market-based playbook and allowed the Russian ruble to float.  That freed Russia’s central bank from having to defend the ruble and prevented an even greater outflow of hard currency that would have further undermined Russia’s economy.

Moreover, since commodities are generally priced in dollars, the sharply devalued ruble meant that though Russian companies faced falling prices for their goods, the dollars they did receive could be converted into more rubles.  That softened the economic blow—enough so that Russian energy companies could continue to reinvest in their businesses.  As a result, despite the sanctions on oil-production technology, Russia is able to produce more oil today than it did before the sanctions were imposed.

Inflation Control

With shortages of imported goods and more rubles in circulation, inflation became a real threat.  Rising prices ate away at the purchasing power of ordinary Russians.  But rather than reflexively enact price controls, Russia’s central bank used another market-inspired lever.  It raised interest rates, up to 17 percent by December 2014.  Credit naturally dried up, further depressing the Russian economy.  But fortunately for Russia, inflation was quickly brought under control.  That allowed Russia’s central bank to gradually lower interest rates to 10 percent, giving Russian companies much-needed breathing room to recover.

Fiscal Discipline

In the depths of its economic recession, Moscow could have increased government spending to boost economic activity.  But with falling revenues from Russian oil production, a surge in spending would have pushed Russia’s government budget deep into the red and fueled a potential economic crisis.  Instead, Moscow exercised fiscal discipline.  It held its spending in check and ran a budget deficit of only 3 percent of Russia’s GDP last year.  When more funds were needed, Moscow raised taxes and dug into its two sovereign wealth funds, draining a third of their assets before oil prices stabilized.

Wavering Western Resolve

Meanwhile, European companies, particularly German ones, gave Moscow hope.  They were never keen on the economic sanctions against Russia.  From the start, they lobbied German Chancellor Angela Merkel to water them down.  After they were imposed in 2014, German direct investment into Russia evaporated.  But only a year later, German companies returned, investing $1.8 billion into Russia.  Last year, they invested another $2.1 billion, more than they had in the year before economic sanctions were imposed.  Such continued investments have encouraged Moscow to question the strength of Western resolve.

Conclusion

The West’s economic sanctions have bent but did not break the Russian economy, despite its structural vulnerabilities.  What steadied it was a combination of several factors, the most important of which were the stabilization of global commodity prices and the market-oriented policies implemented by Russian authorities.  They made Russia’s economy more resilient and prevented an even deeper recession.

Ultimately, economic sanctions can make countries more vulnerable to global economic forces.  But rarely do they deliver a knockout blow themselves.  Western economic sanctions against Russia have proven the rule, rather than the exception.  Ironically, the West’s success in spreading open-market ideas at Russia’s central bank may have inadvertently weakened the effectiveness of its own economic sanctions.  If so, the further spread of such ideas could make economic sanctions even less effective in the future.

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Japan’s Precarious Position in the Asia

Japanese destroyers in column formation

Over the last few years, Japan’s foreign policy gained a coherence rarely seen in decades.  No doubt pressure from Japan’s natural rivals in Asia—a rising China and a recalcitrant Russia—have helped to focus the minds of Japanese policymakers.  Certainly those closest to Japanese Prime Minister Shinzō Abe seemed convinced that Japan needed to improve its security situation.  By the beginning of 2016, it seemed as though Japan had done just that.

A Firmer Footing

While President Barack Obama’s “pivot to Asia” proved disappointing, Japanese policymakers saw value in Obama’s support for a “rules-based international order.”  In practical terms, what that meant was that Japan could at least count on the United States to remain engaged in Asia and underpin its security.  For much of 2016, that seemed likely to continue.  After all, Obama’s nominal successor, Hillary Clinton, led in the U.S. presidential election polls.  Though Clinton had renounced her earlier support for the Trans-Pacific Partnership (TPP), a free-trade agreement that Japan hoped would be the basis of Asia’s future economic architecture, most observers expected her to reverse herself again if she became president.

Hence, Abe had every reason to believe that his efforts to improve Japan’s security would be built on a reasonably solid foundation.  He tirelessly traveled throughout Asia cultivating new friendships, especially with the countries in Southeast Asia.  He encouraged Japanese companies to invest in them; he forged security relationships with them; and he even gave some of them Japanese-built patrol boats to monitor their maritime borders.  He also stepped in when Washington stumbled.  After relations between the United States and its long-time allies, Thailand and the Philippines, soured over their internal affairs, Abe quickly moved to strengthen Japan’s bilateral ties with both countries.

Japan also took more direct steps to strengthen its defense posture.  It modestly increased its defense budget.  It also laid the groundwork for new military installations in the Ryukyu Islands to watch over its East China Sea claims.  But possibly Japan’s biggest step was its new interpretation of its self-defense law.  Under the new guidelines, Japan’s Self-Defense Forces would be allowed to aid allies who come under attack.  While that may seem wholly non-controversial in most countries, it was anything but in pacifist Japan.  Some feared that Japan could be more easily drawn into future conflicts.  But the new guidelines would also enable Japan to form stronger security alliances that could prevent such conflicts from happening at all.

The string of good news for Japan’s security reached its zenith last July.  Under the auspices of the United Nations, the Permanent Court of Arbitration gave a boost to the “rules-based international order” when it judged that China’s “nine-dash line” claim in the South China Sea to be invalid.  With the judgment an international court at its back, a heartened Tokyo even considered filing its own case against China over their competing territorial claims in the East China Sea.

Shifting Sands

However, just then the ground beneath Japan’s feet shifted.  Rodrigo Duterte’s election as the president of the Philippines abruptly ended what some saw as Southeast Asia’s growing willingness to back an international order based on rules (or at least on ASEAN’s norms).  Having a personal animosity towards Obama and a general suspicion of American meddling, Duterte steadily moved the Philippines away from the United States.  Instead, he leaned toward China.  Abe’s meeting with Duterte in Tokyo failed to arrest that tilt.  Soon after, Malaysian Prime Minister Najib Razak, for his own reasons, began to lean the same way.  He even agreed to buy Chinese ships for the Malaysian navy.  On the other hand, Japan missed a golden opportunity to solidify its security relationship with Australia when a Japanese consortium lost a bid to build Australia’s next generation of submarines.

To top it all off, Donald Trump won the U.S. presidential election.  Throughout his campaign, he bashed not only the TPP, but also Japan for what he viewed as its inadequate support for the U.S. security presence in Asia.  Soon after his election, Trump confirmed that he would shelve the TPP when he became president.  Doubtlessly concerned, Abe hastily flew to New York to impress upon Trump the importance of a strong alliance between Japan and the United States.  But Abe received no public assurances.  The best news that Abe received from Trump probably came a month later when he announced his aim to expand the U.S. Navy.  If fully realized, that would at least put more substance behind America’s commitments to Asia (and to Japan), however strong they may be.

Troublesome Neighbors

China quickly capitalized on Japan’s reverses.  Given the likely demise of the TPP, China pushed harder for a Chinese-led free-trade pact, the Regional Comprehensive Economic Partnership, at the APEC summit last November.  Many believe the pact, if successful, would draw Asia’s economies closer into China’s orbit.

Russia also sensed Japan’s weakened position.  When Russian President Vladimir Putin met with Abe a month later, he offered Abe nothing new when they discussed how to settle their dispute over the southern Kuril Islands (or Northern Territories in Japan).  Putin simply reiterated Russia’s historic positions and insisted that any joint economic development on the islands must take place under Russian rules, an implicit recognition of Russian sovereignty over the islands.  Unsurprisingly, the meeting yielded little progress.

The Going Remains Tough

To make matters worse, Japan has yet to break free from a quarter century of economic stagnation.  Unless that changes, Japan will be hard pressed to devote substantially more resources to its security.  Through the TPP, Abe probably hoped to not only give Japan an economic boost, but also bind the United States more closely to Asia.  Unfortunately for Abe, the TPP’s negotiations dragged on for too long.  By the time they ended, it was politically impossible for the U.S. Senate to ratify it.  Even so, Abe has vowed to push TPP legislation through the Japanese Diet.

None of this is to say that Japanese policymakers have lost their way.  Abe is still focused on improving Japan’s security situation.  But for the moment, how much more he can do about it is not altogether clear.

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Stopover Hysteria: Understanding Tsai’s Stopover in the United States

Photo credit: The Office of U.S. Senator Marco Rubio

On January 7, President Tsai Ing-wen of Taiwan will embark on a trip to the United States—not to visit President Barack Obama or President-elect Donald Trump, but to refuel her plane, rest, and conduct some meetings before moving on to Central America. This type of visit has become routine in U.S.-Taiwan relations and is nothing new or particularly special, so why is this trip so controversial?

Tsai is stopping in the U.S. en route to state visits to some of Taiwan’s diplomatic allies, specifically Honduras, Nicaragua, Guatemala, and El Salvador. News outlets have covered this trip not because these countries are four on a list of only twenty-one states with formal diplomatic relations with Taiwan or because Sao Tome and Pincipe recently switched its recognition from Taiwan to China (a long and growing list), but because Tsai will stop in Houston and San Francisco briefly during transit. Since 1994, every president of Taiwan has landed in the United States while en route to visit diplomatic allies. These visits have ranged from a few hours to a few days—depending upon the state of U.S.-Taiwan relations.

The president of Taiwan must receive special permission from the U.S. government to land or to stay in the country for any amount of time. This rule was established to ease the minds of the Chinese who are suspicious of any interactions between the U.S. and Taiwan that hints of any kind of diplomatic recognition. Since the U.S. severed ties with Taiwan in 1979, no president of Taiwan has participated in an official state visit in the U.S.—only brief stopovers and meetings with U.S. Congressmen and other people of note.

In a post-“Trump Call” world, China is on alert for any indications of a major change in U.S. policy toward Taiwan. As a result, the Chinese foreign ministry has been unusually quite vocal about the potential of a Tsai stopover in the U.S. When asked about Tsai’s visit, Hua Chunying, a Foreign Ministry spokesperson, said,

The one-China policy is a consensus shared by the international community, and also a principle of how we handle Taiwan’s engagement with foreign countries. We hope that relevant countries can carefully address Taiwan-related issues. As to the Taiwan leader’s transit in the US, I believe her real intention is clear to all. We hope that the US side can follow the one-China policy and the three joint communiques, disallow the Taiwan leader’s transit in the US, refrain from sending any wrong signal to the pro-independence force in Taiwan, and take concrete steps to uphold the overall interests of China-US relations and maintain peace and stability across the Taiwan Strait.

In early December 2016, another spokesman said that “the so-called transit diplomacy is only a petty trick played by the Taiwan leader, whose hidden political agenda should be clear to all.” Despite these protests, the U.S. granted Tsai approval, and she will be landing in Houston  on January 7 and departing for Honduras on January 8, and then she will land in San Francisco on January 13 and return to Taiwan on January 15. Previous presidents have stopped over in Los Angeles, New York, Austin, Miami, Honolulu, and Anchorage—with the final city being the unofficial stopover location when ties between the U.S. and Taiwan are less than stellar.

Tsai has a busy schedule for her visit to Central America: she is visiting Honduras after being invited by its president, Juan Orlando Hernandez; she will attend the inauguration of President Daniel Ortega of Nicaragua; and she will visit Antigua in Guatemala to promote tourism between Taiwan and Guatemala. All of these visits and events are important for the continuation of relations between these countries and Taiwan, but the only feature of the trip extensively covered in the news is her stopover in the U.S. and China’s outrage over what had become routine.

The American Institute in Taiwan (AIT) noted to Reuters the routine nature of these visits: “President Tsai’s transit through the United States is based on long-standing U.S. practice and is consistent with the unofficial nature of our relations with Taiwan.” No matter how much the media or China tries to play up the controversy of this stopover, it should not qualify as exceptionally newsworthy. China’s perception of possible changes in U.S. policy and U.S.-Taiwan relations has caused even the smallest bit of information to be blown out of proportion. Did China raise a stink when Secretary of State John Kerry met with James Soong, Taiwan’s representative to the Asia-Pacific Economic Cooperation (APEC) in November 2016? How about when U.S. Ambassador Matthew J. Matthews, Deputy Assistant Secretary and U.S. Senior Official for APEC, visited Taiwan in early December 2016? No—because these visits are routine, nothing special, just like Tsai’s impending “visit.”

The one thing to look out for is who Tsai meets in San Francisco and Houston. During her visit stopover in Miami in June 2016, Tsai met with Senator Marco Rubio. Will anyone tapped to be in the Trump administration meet with her? If so, how senior of an official and from which department? The answers to these questions are important and could give a glimpse into how a Trump administration will handle the “Taiwan question” beyond the infamous phone call. The genuine issues at stake here are not a routine stopover, but the seemingly deteriorating relations between the U.S. and China, the apparent risks to cross-strait relations, and apprehensions about what the impending Trump administration will do come January 20, 2017 in regards to cross-strait relations and China policy. 

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Standing Firm, Mostly: Militarization of the South China Sea

China's Presence in the South China Sea
China’s Presence in the South China Sea

 

Last week, a Chinese naval vessel which had been shadowing the USNS Bowditch, a U.S. Navy oceanographic ship, scooped up one of the ship’s unmanned underwater survey drones about 80 km off the Philippine coast.  Washington demanded the drone’s return.  Over the weekend, China’s Ministry of Defense said that it would transfer the drone back to the United States; and by Tuesday afternoon it was back in American hands.  Though the incident was quickly settled, it could have easily escalated.  Some initially feared a replay of the 2001 crisis in which China impounded a damaged U.S. EP-3 reconnaissance aircraft for three months after a Chinese J-8 fighter collided with it over the South China Sea.

 

Lest anyone think that the recent rapprochement between China and the Philippines would restore calm to the South China Sea, the drone incident demonstrated that tensions there remain high.  Even more worrisome in the longer run is the steady militarization of the region’s disputed islands.

 

Vietnam’s Response to China

Considering what Vietnam sees as China’s repeated provocations—from its use of the Hai Yang Shi You 981 offshore oil drilling rig in disputed waters to its construction of military-grade airfields on Chinese-occupied islands—Hanoi has felt justified to respond in kind.  Last year, it extended the runway on Vietnamese-held Spratly Island from under 760 meters to over 1,000 meters, long enough to accommodate maritime surveillance and transport aircraft.  Then in August, Reuters reported that Vietnam had discretely deployed mobile rocket launchers on some of the other islands that it holds.[1]  Once assembled and armed, Vietnam could easily target China’s nearby island airfields and military facilities.

 

China’s Response to Vietnam

Conscious of such dangers, China has taken precautions.  Satellite imagery recently revealed that China has installed large anti-aircraft guns and close-in weapons systems capable of shooting down cruise missiles on each of its islands.[2]  Earlier this year, China deployed HQ-9 surface-to-air missile systems on Woody Island in the Paracel archipelago.  Perhaps they will also appear on Chinese-occupied islands in the Spratly archipelago, if more foreign aircraft are seen overhead.  No doubt China is preparing itself for an armed challenge, whether from competing South China Sea claimants or the United States.  As China’s Ministry of Defense posted on its microblog last Friday, “Were someone to be threatening you with armed force outside your front door, would you not get ready with even a slingshot?”[3]

 

The Philippines’ Resignation

Meanwhile, the Philippines’ response to all this went in the opposite direction after the election of Rodrigo Duterte as its president in June.  Duterte’s foreign minister, Perfecto Yasay, signaled the Philippines’ resignation to China’s military construction.  “We cannot stop China at this point in time and say do not put that up,” he said.[4]  Instead, the Philippines would focus on furthering its economic ties with China.  That strategy has paid off so far.  In October, China promised Duterte that it would provide the Philippines with investment and financing worth $24 billion.  The following month, the Chinese coast guard allowed Filipino fishermen to return to the waters near Scarborough Shoal for the first time since the 2012 standoff there between Chinese and Philippine authorities.

 

That the Philippines has gone wobbly on standing up to China probably came as little surprise to Vietnamese leaders, who always doubted Philippine commitment.  For the moment, Vietnam is doing its best to match China’s actions.  And so the militarization of the South China Sea continues.  Hopefully future incidents in its waters will end as peacefully as the most recent one did.

 

[1] Greg Torode, “Exclusive: Vietnam moves new rocket launchers into disputed South China Sea – sources,” Reuters, Aug. 10, 2016.

[2] “China’s New Spratly Island Defenses,” Asia Maritime Transparency Initiative, Dec. 13, 2016, https://amti.csis.org.

[3] Li Xiaokun, “Island defenses ‘legitimate, legal’,” China Daily, Dec. 16, 2016.

[4] Jeannette I. Andrade, “PH helpless vs China–Yasay,” Philippine Daily Inquirer, Dec. 17, 2016.

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Revival of the Regional Comprehensive Economic Partnership

Countries Involved in the Regional Comprehensive Economic Partnership and the Trans-Pacific Partnership
Countries Involved in the Regional Comprehensive Economic Partnership and the Trans-Pacific Partnership

 

The Regional Comprehensive Economic Partnership (RCEP) and the Trans-Pacific Partnership (TPP) are both free-trade agreements in Asia that have been under negotiation for a number of years.  Often seen as competitors, however, the former is led by China and the latter by the United States.  By February 2016, the RCEP had fallen behind the TPP, whose negotiators had already signed an agreement and returned it to their twelve member countries for ratification.  Their RCEP counterparts were still mired in talks.

 

Even so, the TPP’s negotiations were by no means a cake walk.  Concerns in Japan over agricultural issues and in Southeast Asia over the TPP’s “deep” standards repeatedly delayed an agreement.  Indeed, there had been too many delays.  By the time a deal was reached, the United States, the pact’s biggest member, had begun what turned out to be a particularly bitter presidential election and one in which the TPP became a lightning-rod issue.  Even the pact’s early advocates, like former Secretary of State Hillary Clinton, who was one of the presidential candidates, strongly disavowed it.  In such a political climate there was little chance the U.S. Senate would ratify it.

 

The election of Donald Trump as the next American president sealed the fate of the TPP in the United States.  Soon after, President Barack Obama abandoned his efforts to ratify the pact.  Trump himself declared that the United States would withdraw from it after he is sworn in as president.  That threw the future of the TPP into turmoil.  It also breathed new life into the RCEP.  Capitalizing on the TPP’s disarray, Chinese President Xi Jinping reassured participants at the Asia Pacific Economic Cooperation summit in late November that China would renew its efforts to conclude the RCEP.

 

RCEP vs. TPP

Why does that matter?  What, apart from some of their member countries, is the difference between the two free-trade agreements?  Traditionally, countries conclude free-trade agreements to lower or eliminate tariffs, and thus encourage trade.  While that has generally spurred economic growth in developing countries, it has also tended to hollow out legacy industries in developed countries.

 

Consequently, developed countries, like the United States, have sought a new approach to free trade.  Embodied in the TPP (and its sister free-trade agreement, the Transatlantic Trade and Investment Partnership), that approach requires member countries to adopt domestic policies that would “raise labor and environmental standards, impose disciplines on government-owned corporations, strengthen intellectual property rights enforcement, [and] maintain a free and open internet.”[1]  In that way, developed countries argue, trade would be not only freer, but fairer too.  Indeed, some in the Obama administration even saw the TPP as part of a grander vision for a “rules-based international order.”

 

Naturally, developing countries feared what impact such policies would have on their protected companies and industries.  For example, the TPP would require them to end their preferential treatment of state-owned enterprises in government procurement, something they were reluctant to do.  Nevertheless, developing countries were ultimately persuaded to join the pact because of the added benefits they could gain from greater access to the markets of developed countries.

 

On the other hand, the RCEP is a far more traditional free-trade agreement.  It does not share the lofty ambitions of the TPP.  It does not concern itself with “behind the border issues,” like the preferential treatment in government procurement.  Rather, it simply focuses on reducing and eliminating tariffs.  Countries can limit competition wherever they see fit.  On the surface, that sort of pact would appear easier to negotiate.  But developing countries must carefully consider the terms of such a pact, because they can lock countries into being part of regional supply chains whose ultimate benefits accrue elsewhere.  Given that there are thousands of categories and subcategories of goods to consider (not mentioning the fact that many of those are shuttled between countries before they are assembled into a final product), negotiations are bound to be complex.

 

Impact of RCEP

Still, the RCEP is back on center stage.  If successfully concluded, it could change the structure of Asian trade in ways that would put China firmly at the center of commerce in the region.  That, some worry, would accrue even more political as well as economic power to China.  But given the prevailing sluggish global economy, what matters to most developing countries is reaping the immediate benefits from freer trade.  Unsurprisingly, a couple of countries at the APEC summit quickly seconded China’s interest in reviving the RCEP’s negotiations.  It is now up to China to make it happen.

 

[1] John Lyons, Mark Magnier, and William Mauldin, “China Steps In As U.S. Retreats on Trade,” Wall Street Journal, Nov. 23, 2016, pp. A1, A6.

 

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