Southeast Asia Challenges for the Incoming Administration

December 15, 2016

President-elect Donald Trump’s foreign policy team is taking shape, with the choice of ExxonMobil chief executive Rex Tillerson for secretary of state and retired Gen. James Mattis for secretary of defense. The selection of Tillerson and Mattis—both well-respected individuals with a wealth of international experience—is a positive first signal about the seriousness and capability of Trump’s foreign policy team. Tillerson—an active board member of CSIS—is a pragmatic and centrist realist who has worked on projects in Asia for many years. Mattis, while predominantly a Middle East hand, has spoken publicly of the need to “counterbalance” China to deny it “veto power over territorial, security, and economic conditions in the Pacific.”

The U.S. relationship with China is the world’s most important bilateral relationship, and Southeast Asia is carefully watching what happens on this front. Trump’s questioning of the longstanding “One-China” policy unless Beijing makes concessions over its handling of currency, its military buildup in the South China Sea, and North Korea’s nuclear program created some heartburn in Southeast Asian capitals. The region fears that tensions between Washington and Beijing or U.S. trade sanctions against China could hurt Southeast Asian exporters and the regional production networks that run through China. For the United States to push China in some critical areas but not harm the region’s economy will be very tricky for the incoming administration.

Southeast Asia is also anxious about the United States’ commitment to the region and ensuring that the United States plays a leadership role, sustaining the investments, focus, and energy experienced under the outgoing administration. Regional leaders face doubts about the United States’ ongoing willingness and ability to sustain regional leadership at a time when China is seeking to replace the United States as the region’s leading economic and strategic partner. A big challenge for the Trump administration will be how to reassure the region during this time of transition.

Another big challenge will be figuring out how to proactively engage the region on economic issues without the 12-nation Trans-Pacific Partnership (TPP). The TPP—the flagship initiative for U.S. economic engagement in Asia for the past seven years—was of particular importance in Southeast Asia, where economic issues take precedence. Four Southeast Asian countries—Brunei, Malaysia, Singapore, and Vietnam—had signed the TPP. Many of the United States’ partners in the TPP are now considering whether to implement the TPP on their own, in addition to pivoting to the 16-nation Regional Comprehensive Economic Partnership (RCEP), a less ambitious trade arrangement that includes China but not the United States.

The TPP promised years of constructive economic engagement in Southeast Asia, as member states worked together on its implementation and non-members like the Philippines, Thailand, and Indonesia discussed whether they should also join. Trump’s shelving of the TPP will leave a massive hole in U.S. regional economic policy in Southeast Asia that will need to be filled with other initiatives if the United States hopes to engage Southeast Asian countries on the issues that matter most to them.

Security challenges will also need to be addressed, most notably ongoing tensions between China and Southeast Asian claimants—Malaysia, the Philippines, and Vietnam—in the South China Sea. Beijing’s behavior in the South China Sea has been relatively restrained since the ruling against it in July by an international tribunal, perhaps because new Philippine president Rodrigo Duterte has decided to shelve the ruling in the hope he can achieve some economic deals with Beijing. But it is likely only a matter of time before China pushes the envelope once more.

China’s ongoing construction of military facilities in the Spratly Islands is increasing China’s advantage over its smaller neighbors, who will continue to look to the United States for backing and assistance. The United States faces a difficult balancing act in the South China Sea as it attempts to avoid conflict, defend international rules and norms, uphold alliances and partnerships, and maintain a productive relationship with China. Beijing may well decide early on to test the new U.S. administration in the South China Sea, so the incoming team may not have long to figure out its strategy.

Philippine president Duterte has further complicated South China Sea dynamics. Duterte’s efforts to improve relations with China decrease the chances of an unwanted confrontation in the South China Sea between China and a U.S. ally. But the way Duterte has gone about bettering relations with China has not been helpful to allied efforts to safeguard Philippine rights in the South China Sea. In particular, his call to end both the alliance and access for U.S. forces to the Philippines, since walked back by his key cabinet officials, threatens the ability of the United States to credibly act as a security bulwark against Chinese adventurism in Southeast Asia.

Duterte’s ongoing drug war, which has killed nearly 6,000 people, could also remain a thorn in relations between the two allies. But so far little is known about how much Trump will focus on human rights in foreign relations. According to Duterte’s recounting of his phone call with Trump, it seems the Philippine leader thought there was a real possibility of a reset under the incoming administration.

Relations with Thailand, the other U.S. treaty ally in Southeast Asia, have been in the doldrums since a military coup toppled an elected civilian government in May 2014. Washington responded by cutting off some military assistance and holding the regime at arm’s length, which prompted the junta to flirt with moving closer to China. In August, a referendum on a draft constitution allowing for a tightly controlled democracy was passed by Thai voters, prompting the military rulers to promise elections in late 2017. That date may slip to early 2018 due to the year of mourning following the recent death of King Bhumibol Adulyadej. The incoming U.S. team will have to figure out if the move toward elections provides an opportunity to begin to reset relations with its oldest ally in Asia.

Myanmar once again poses a challenge for Washington. The United States celebrated when Aung San Suu Kyi and her National League for Democracy swept into power in a landslide election victory in late 2015. It was expected that the transition from five decades of military rule would be difficult and fraught with problems like tensions with the military, which still retains sizeable clout, and ongoing fighting with ethnic armed groups along the country’s frontier.

The biggest crisis to face the new Myanmar government is communal violence involving the Rohingya Muslim minority in western Rakhine State, which erupted on October 9 when nine police officers were killed in attacks on several border posts. The military responded with harsh counterinsurgency measures that have resulted in the deaths of over 80 people, the burning of villages, and the suspension of emergency assistance to the Rohingya from the international community. The incoming U.S. team will face the challenge of persuading Aung San Suu Kyi’s administration to allow the resumption of humanitarian aid and to move quickly to tackle Rakhine’s communal violence and dire poverty.

(This Commentary originally appeared in the December 15, 2016, issue of Southeast Asia from Scott Circle.)

Murray Hiebert is senior adviser and deputy director of the Southeast Asia Program at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Geoffrey Hartman is a fellow with the CSIS Southeast Asia Program.

Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

© 2016 by the Center for Strategic and International Studies. All rights reserved.