Trading Places: America, Japan and Regional Trade on the Chessboard
Andrew Schwartz: Welcome to The Asia Chessboard, the podcast that examines geopolitical dynamics in Asia and takes an inside look at the making of grand strategy. I'm Andrew Schwartz at the Center for Strategic and International Studies.
Hannah Fodale: This week, Mike is joined by Mireya Solis of the Brookings Institution to discuss the regional trade architecture of the Asia Pacific. The two start off by analyzing the geopolitical significance of RCEP and CPTPP, and what the lack of US participation in both trade agreements means for US trade strategy under the Biden administration. Mireya also dives deeper into Japan's economic strategy in Asia, and argues that Japanese leadership in the region is likely to continue.
Mike Green: Welcome back to The Asia Chessboard. I'm Mike Green, I'm joined by friend and colleague Mireya Solis, who is at the Brookings Institution. She runs their center for East Asian Policy Studies and is the Philip Knight Chair in Japan studies, a scholar of political economy of Japan, and especially of the regional trade and architecture, building process in Asia.
Mike Green: And this is a critical piece of strategy. It's one that has seen the US step back in recent years, after a decade or more of leading on institution building in Asia. And one that the incoming or new Biden administration will not be able to avoid. There's no doubt that when Joe Biden starts having extensive summits with the prime ministers of Japan and Australia, Canada, and other leaders in the region, they will ask him for a trade strategy as they did President Obama in 2009.
Mike Green: And it's not a good topic in American politics. But it's an unavoidable topic in the statecraft of Asia. So we don't know yet what the Biden administration will do, precisely on trade and on regional architecture as it relates to economics, but we have the best person to help us guess what that might be based on the history and the realities in the region. So, Mireya, thank you for joining us.
Mireya Solis: Thank you very much, Mike. It's such a pleasure to be here with you.
Mike Green: So, we always start by asking how you got here. And it's a fascinating question for people who want to grow up to be you. So, tell us, how did you end up at Brookings? How'd you end up focusing on Japan, political economy, Asia?
Mireya Solis: Sure, Mike. Well, quite frankly, I started early, but I was not as strategic about it. And what I mean by this is that, as you probably know, I grew up in Mexico City. And by coincidence, my mother decided to enroll me and my sister in a Japanese school. We had no prior background or knowledge of Japan or Asia, but I was exposed to the language and the culture and I was hooked.
Mireya Solis: And then I decided that most Mexican students of international relations were focused on the United States, were looking at Latin America, but not Asia. And that actually became a focus of mine early on. And when I came to the United States for grad school, I was trying to soak in as much as I could Japanese studies on all areas, and I became a professor.
Mireya Solis: I was a tenured professor at American University but I wanted to do applied work. I was very interested in policy. And Brookings had an opening and I thought that probably will do it. And I'm very lucky to have been at Brookings now for eight years, straddling research and policy engagement.
Mike Green: So we should spend a little time maybe later in our conversation about Mexico and Japan and Mexico in the Pacific Rim. I don't think many Americans think about this very much, particularly in Washington. I know on the West Coast, there's a bit more attention to it. But well, let's do it now.
Mike Green: Mexico has had a quite extensive trade relationship with Japan. Some of the early bilateral trade negotiations Japan tested and experimented with were with Mexico and then because of NAFTA, Japanese FDI, it's not in the United States, it's in North America, especially Mexico. Tell us a little bit, because I don't think people think about Mexico in the context of Asia, strategy in Asia policy about some of the Mexican connections with Japan and with the region.
Mireya Solis: Sure. It's a very long and deep relationship. And as you say, it's probably not that well known outside of Mexico and Japan. Mexico actually was one of the first countries, if not the first, to negotiate an agreement with Japan on equal terms at a time when for Japan's diplomacy there was an essential priority to set aside the unequal treaties. So that tells you how far and how important this relationship is.
Mireya Solis: Mexico has received in the past a large amount of Japanese immigrants. Mexico has the third largest community of Japanese living abroad. People think about Brazil and Peru but actually there is a very large and vibrant community in Mexico. And Mexico and Japan's economic ties are also long and deep. In the beginning they were mostly about trading commodities like oil.
Mireya Solis: The school I mentioned that I attended, was a reflection of the booming relationship after Mexico became an oil exporter. But later on also became very important on the trade front. And again, talking about first experiences in negotiating agreements, the free trade agreement with Mexico was the first time really that Japan made concessions, limited, if you will, but some concessions on agriculture. And given that Mexico has a network of trade agreements, the team is very experienced.
Mireya Solis: One thing that my friends in the Mexico trade ministry would tell me is that they were constantly fielding questions from their Japanese counterparts about the nuts and bolts of preferential trade agreements. So that gives you, I think, an interesting sense of the relationship. And, of course, given the proximity between Mexico and the United States, they are deep economic ties in North America, that also is of great interest to Japanese companies.
Mireya Solis: And in many ways, it was NAFTA, which first alerted Japanese companies to this shift towards preferential trade agreements, and was a big motivating factor for Japan to undertake a new track in its economic diplomacy. So there's a lot of depth that is not appreciated here, I think.
Mike Green: And a lot of importance to the United States. And when you say one of the first countries to sign an equal treaty, you move beyond unequal treaties, you're talking well over a century ago.
Mireya Solis: Yes, that's what I'm referring to. Yes.
Mike Green: Yeah. And also Japan was quite open to expanding the original APEC very early on to include Mexico. I think it was particularly Mexico because of NAFTA and because of Japan's history that helped lock in the Pacific Rim, Trans Pacific aspects of APEC and architecture. That Mexico-Japan connection, I think, was probably the core of why that happened, in some ways.
Mireya Solis: Yes. And it's a very important part of Mexico's foreign policy, the Pacific Rim identity. And I think that one of the items that Mexico is now trying to accomplish is diversification of economic relations, and they look into Asia. And they think of Japan as a very important partner to accomplish that.
Mike Green: So, a lot of Americans don't think about US relations with Mexico. But the reality is, it is a dimension of our Indo-Pacific strategy. It really is. It's not just a North America policy issue. So, let's talk about trade agreements in the region and bring it up to the present. The Biden's administration comes into office as two major trade agreements have been completed in the region, CPTPP, which, of course, was the Trans Pacific Partnership, and did include the United States at the core before 2017. And RCEP, the Regional Comprehensive Economic Partnership, which is often, I think, mistakenly characterized as a China agreement. It's not. As you know it started within ASEAN and Japan. But what does it mean, just in terms of our strategic interests, that the two biggest agreements in this region don't have us at the table?
Mireya Solis: Well, it's big, and it's unfortunate. And part of it is our own goal, especially when it comes to the TPP. Let me start with talking a little bit about RCEP, because I think that the CPTPP is already better known. Just a word on that, there are 11 countries largely led by Japan were able to rescue that trade initiative after the huge blow of the US departure. And they maintain basically the same level of ambition when it comes to rules, a very surgical approach to spending just on rules. And then the same tariff liberalization, very ambitious set of goals.
Mireya Solis: But RCEP is the newest arrival, if you will. And I think that for a while Mike, there's been a little bit of a bad habit for a long time of being dismissive of RCEP's potential. One, because it's not CPTPP. And therefore, it did not have the same set of standards. But second, because people were assuming that it would never really come to fruition, the negotiations took a very long time. And the idea was that perhaps it was never going to come together.
Mireya Solis: Well, now we are here, where the agreement has been signed. And it is a big deal on a number of fronts. First of all, when it comes to economic heft, we're talking about the largest trade deal in the world. It basically comprises something like one third of world GDP. But also very importantly, this is an agreement that is very much geared to make the operation of global supply chains flow more smoothly.
Mireya Solis: There is this desire to make sure that companies can tap on the sources of comparative advantage across the 15 member countries. So, a lot of flexibility in how companies can transfer components and trade and invest across the region. And therefore, one way to think about RCEP, Mike, is that countries are stitching the region together.
Mireya Solis: Then there's another important, I think dimension and that we should keep in mind that RCEP in many ways is important because it introduces, for the first time, preferential trading amongst the three largest Northeast Asian economies, China, South Korea, and Japan. And we know that some of those political relationships are complicated. And therefore, it's very significant that they're going to be integrating further, they're going to be trading and investing more.
Mireya Solis: And as you mentioned, this is a big win for China. It does not mean that China was the driver of the negotiations, it does not mean that it was originally a Chinese initiative. But China has played its cards well. And at a moment where, there's a lot of discussion as to whether there'll be reshoring of supply chains, whether it be decoupling in some sectors, and so forth.
Mireya Solis: What RCEP does, in many ways is it blunts that narrative of decoupling because China is now part of the largest ticket in town. And China accomplished this without having to surrender what it cares the most about. And that is its tools of industrial policy of intervention in the economy. So they did not have to abide by disciplines of state owned enterprises or curb its industrial subsidies or give up its digital protectionism. And nevertheless, there it is, as a very important pillar of RCEP and regional integration.
Mike Green: One of the reason trade policy experts poo pooed RCEP a bit was because in comparison to TPP, it didn't have those behind the border, state owned enterprise disciplines and other things. But, of course, TPP exists as CPTPP. We're not in it. But can Japan and Canada and Mexico and other countries use that as leverage with China because those standard enterprise disciplines are largely still in TPP, even though we're not. Or is it just going to be too hard to discipline China and use that leverage without the US in the mix?
Mireya Solis: Well, it's an interesting question because, right after RCEP came together, China began to signal more strongly than in the past its interest in joining CPTPP. And the question there, of course, has always been readiness and political will. Because indeed, if China were to join CPTPP, it would have to be incorporating a far more intrusive set of disciplines and bigger reform commitments on its part.
Mireya Solis: And nothing that I've seen lately, frankly, makes me think that China is indeed willing to undertake these disciplines. There is some discussion as to whether China could try to join CPTPP to lower down the standards by signing a number of side letters and trying to not be subject to the same level of discipline. But I think that Japan and other countries have put an end to that speculation. And they have basically said that countries that want to come in should not be lowering standards.
Mireya Solis: So, it is, of course, a very important question, how can we encourage China to reform again, and I think that there is merit in disseminating the disciplines that get to some of these state trading practices. There is merit in incorporating them, as the EU, Japan, and the United States have tried to do in the WTO. And there is merit in suggesting that if China wants to enjoy deeper benefits from economic integration it might consider down the road, abiding by this, but I'm not holding my breath that China is ready to give up on any of this.
Mike Green: So, the other reasons that people didn't hyperventilate about RCEP were because India was in it. India guaranteed nothing happened. But then when India got out, it was consolidated pretty quickly. And I'm sure you looked very carefully at the Peterson Institute report some years ago, which said, "Actually, the best of all worlds would be to combine RCEP and TPP." In what the US supported when I was in the Bush administration, an FTA, a free trade area of the Asia Pacific in 2007, and Sydney and APEC, the US and others agreed that these should all lead towards this, in what theorists call competitive trade liberalization. We would batter down each other's barriers to trade in economic interdependence and interaction. And that's all gone now.
Mike Green: So it does seem like RCEP is creating these synergies and Northeast Asia gives China a pass that it wouldn't have otherwise had. On the other hand, Japan. Japan in 2011, I remember this from a talk I gave at the time, 16% of Japan's trade was covered by EPAs or trade agreements, only 16%. Today, it's well over 80%.
Mike Green: So Japan has really become from a follower, a reluctant screaming and kicking follower to a real leader on these multilateral trade agreements. So, that's something we didn't use to have, an active Japan. So I'd ask you, were you surprised as a Japan student and scholar to see how under Abe, Japan really stepped up on these EPAs and FTAs and do you think it'll continue? Is it going to help us out of this problem while we in the US figure out what we're going to do about all of this?
Mireya Solis: It is true that there's been a significant transformation in Japan's trade diplomacy. Japan used to be passive, defensive, punching below its weight. And I think that this transformation was particularly clear around 2013, when Prime Minister Abe came to Washington, and reached that understanding with President Obama on what would be the package of agricultural liberalization that would enable Japan to join the TPP.
Mireya Solis: So, this did not come out of thin air. I think it reflects longer term changes in Japan, first of all, a weakening of the agricultural lobby. Second, a process of centralization of power in the executive, in the candidate to be able to become this legendary bureaucratic infighting but again, prevented Japan from being as strategic.
Mireya Solis: And therefore, you had for the first time, Japan, setting up a TPP headquarters to really take on this negotiation with a level of ambition that had not been possible before. And the third long term transformation was the globalization of Japanese business. And therefore, they need to have these deeper disciplines in trade agreements.
Mireya Solis: I think Prime Minister Abe was the right person at the right time to make all of these elements come together. And a lot of people were more surprised when Japan rescued the TPP after the American exit. And I actually remember, Mike, that the day after the presidential election when President Trump won that election, and given that he had said that he would withdraw the United States, people were writing the obituary for the TPP.
Mireya Solis: And I remember probably as therapy, I wrote an op-ed that said, thanks to the TPP, long live the TPP, making the case that Japan actually was now placed well to rescue the TPP, taking into account this trajectory. So, a lot of people told me no, that will never happen. And there was a moment where it looked really iffy, I have to say. I don't think that Prime Minister Abe immediately seized on this, they wanted to check with the Americans, would this create friction or not. But they had the convening power.
Mireya Solis: And a country that, as I mentioned at the beginning of our conversation, did not negotiate a preferential trade agreement before the 2000s was now ready to do what looked like a very impossible thing. And that is to rescue an agreement with the largest economy that has just walked out the door.
Mireya Solis: So, that's why, I think that depends. Leadership is likely to continue because the foundations are there. Quite frankly, because there is a vacuum to be filled. And because Japan, I think has found its stride with rulemaking. It is the third largest economy. It still has competitiveness in many high tech sectors. But it has found that it is that niche of rulemaking that gives Japan most traction. So, I think that when it comes to economic statecraft, Japan has done more with less, if you will.
Mike Green: Yeah, I agree with that. I think it's particularly important... Saori Katada’s new book does this very well. But it's particularly important to look at the changes in the domestic political economy and the way that stakeholder interests shift so dramatically, so that you almost have to put together a political coalition for external rulemaking and trade liberalization. But I had one more coming from the national security side. I've been involved in decision making on US-Korea (KORUS), US Australia and US Singapore. So I was in the White House at the time and in the small group that had to decide whether or not to do this. The economic arguments and the interest group politics are necessary, but not sufficient.
Mike Green: What always pushes the White House over the line to do these trade agreements, which are incredibly hard, is national security. It's not the only reason but there's always a geopolitical dimension. And I think you cannot distinguish everything you said, which was critical from the geopolitical competition with China, just quite apart from economic interests.
Mireya Solis: Yes. No, I agree with that. And I also think that for Japan, it was about anchoring the United States to the region, and responding to a far more assertive China. So there was a lot at stake with the original TPP and with the rescue of the CPTPP. And what comes next for Japan’s economic statecraft that is guided by geopolitical considerations.
Mike Green: And look very, very fortunate for the United States. Can you imagine if Japan had not played that role where we'd be right now?
Mireya Solis: Yes.
Mike Green: In a much worse position. At least we have a plate at the table, the food's getting very cold. And it might not be appetizing but we can still get in. So the original vision when the Bush administration endorsed TPP, which was originally Chile, Brunei, Singapore and New Zealand. But when the US got in and made it a big, big regional agreement, the original vision was you'd have TPP, RCEP would eventually align with TPP down the road, you would use TPP for leverage for a bilateral investment treaty negotiation with China because there'd be constituents within China that needed that external pressure from trade being diverted away from China investment diverted away by TPP. And then you'd build momentum with the transatlantic TTIP Agreement, you just create this snowballing effect.
Mike Green: In an ideal world, you do all this and the World Trade Organization. WTO, it does its function. That was the idea. And it would give us leverage on China when people say the US didn't see Xi Jinping’s China coming, I don't think that's quite right. I think there was a plan to get purchase and leverage to shape Chinese decision making. And we've lost it, except for the parts that Japan sustained. So I think it's interesting, the incoming Biden administration, you and I have worked with a lot of these people. And it won't get them in trouble for me to say, privately, they all support CPTPP. But politically, I just don't see it being a priority for this administration. What do you think? What do we do? We can't beat something with nothing? And right now, there's nothing.
Mireya Solis: I agree that, to me, the most concerning part is that there is still no messaging as to what is our economic gain in the region. I think that the first actions, of course, the consequential for domestic politics “made in America buy American,” but it's not going to rebuild our credibility. I think that, as you said, the politics of trade are very difficult. And I don't think that there's yet consensus as to what these templates of trade agreements for the Biden administration is going to be. But we know that the region is not waiting. And if we're going to say that we're going to focus on government procurement, and buy only from American companies, and if we say that we have so many domestic challenges, and do not immediately send out a number of initiatives that have legs, I think that that's going to hurt us.
Mireya Solis: And I think that there are a number of things that could be done sooner rather than later. Sectoral negotiations, I think that a digital agreement would be something that could pass muster in[inaudible 00:22:23] fractious US politics. I think that we could also work together on boosting the resilience of supply chains. And by that, I don't actually mean thinking that everything is better if we just make it at home, but actually making sure that there is redundancies, that there is diversification, that there is transparency when it comes to critical stockpiles, that they are cooperative mechanisms with our allies and partners in case we need to tap on them for a specific need, for a specific commodity. All those things could happen right away. But we need a vision. And we need to make a positive case for US leadership when it comes to economic diplomacy. We don't have that yet.
Mireya Solis: And I think that we also should be thinking about how we make our way back to these mega trade agreements, and in particular, the CPTPP. Because just looking from the outside in is not going to serve our interests and it's not going to prove our clout in the region.
Mike Green: Yeah, I had Bruce Stokes on this podcast, you may have heard it, and he went over the polling on American international engagement, and especially trade and as you know rank-and-file Republicans now are the most protectionist, which is of course, what Republicans were 100 years ago. But the leadership of the Republican Party is the Chamber of Commerce, traditional Republicans, whereas the Democrats are the opposite. The rank-and-file are young, more urban, more pro-trade, but the leadership is much more dependent on labor union organizing, so the trade politics are just all I would love to see, at a minimum, the President or his new Trade Representative say something like, the US will lead on rulemaking in Asia and the Indo Pacific, and we're going to consult closely with our allies and partners.
Mike Green: And initially, we're going to work on digital trade. I'd love to see that but I haven't yet some indication, any indication. When you say, the sectoral agreements like a digital trade agreement. Are you envisioning a treaty that would have to pass in the Congress? Or are you thinking more of an executive agreement that has effects, regulatory issues? How much of a lift are you talking about politically?
Mireya Solis: Well, I'm thinking something like what Japan and the United States did, which is an executive agreement, what they did under digital sector, but I do think that down the road, we do need something that has bipartisan support, and different branches of government sign on to this because one of the difficulties is, the handicaps that we have, Mike, is that it seems that lately, when you have one administration come in, they want to undo everything that other administration did. So this zigzag of policy does not help our interest either. We also know that even though we had in President Trump, a true skeptic of trade, NAFTA survived. And it survived because it was ratified, there was an implementing bill that was ratified by Congress.
Mireya Solis: So if you really want to send a signal that you're committed to the region, and that this is not going to be reverted by the next administration, we need to think about that kind of instrument. So I would say, right now, we're in firefighting mode with a pandemic, we have tons of domestic challenges, we have a credibility deficit. So we're going to come to the region and say, let's start thinking about a large scale, trade agreement, is not going to fly, because that's going to take more than four years. So let's start small building blocks, and then start with a digital agreement and supply chain initiative and so forth. And a commitment to reintegrate the United States to the original architecture. I think that, as you pointed out, the politics are difficult. But let's not forget that, in the recent past, there has been a major bipartisan vote for a large scale trade agreement.
Mireya Solis: And that's the model I think we follow for potential accessioning to the CPTPP. That is the US-Mexico-Canada trade agreement. And if you look at it, follow the best parts of that agreement are the TPP chapters that were brought in and refined. And also, there were now new labor and environmental provisions that addressed many of the concerns that the Democrats have had, and has made them more reluctant to sign on to trade agreements. So there's a fair amount of convergence on the CPTPP. And the USMCA when it comes to digital, when it comes to intellectual property, and so forth. And what you could do is what the CPTPP countries did, and show pragmatism.
Mireya Solis: And I think that the United States could approach the 11 countries and say, “we want back. But to make it work for us, we would like to see some improvement on labor and environment.” And targeted negotiations will have more traction. And also keep in mind that for the CPTPP countries, they're not risking the entire venture, again, they're not going to be left to hang dry because if the US does not get its act together, and cannot really bring that vote to ratify a bid to the CPTPP, the CPTPP lives on. So I think that that might actually be a more pragmatic way for the US to make it to a mega trade agreement.
Mike Green: So the digital trade chapter in USMCA and in US-Japan was good, because it wasn't in NAFTA, and it wasn't in TPP. And it's the new frontier. So it's really critical. But a lot of economists and a lot of business leaders criticize the new USMCA. They call it NAFTA, 1.5, or 0.7 rather, because it's less, because there was so much managed trade built into it, that it actually doesn't get you the benefits of trade liberalization. Do you think that can be avoided as we go down this stepping stone approach you're describing?
Mireya Solis: I hope so. And I agree that there were some elements. Trade agreements are huge, and there are parts that you like, and parts that you don't like, and there are political compromises, and they're about building the right coalition to get the votes. And there are some parts of NAFTA that, very stringent rules of origin. Talk about some export restraints and automobiles, there are parts that I think were a real transgression, they were not positive developments. Keep in mind that the US, if it were to pursue this path, it's an accession negotiation. And Mexico, 80% of its exports come to the United States, there was less ability to say no to those provisions. So, I'm hoping that, the US can bring some of these targeted renegotiations, and I actually do not see appetite among the 11 countries for any managed trade approach making its way to the CPTPP and I think that's a good thing for our own good.
Mike Green: Yeah. And I'm hopeful in part because of history. Bill Clinton came into office, beating up Japan, of course, but then he used that political capital to do NAFTA. And I was on the McCain campaign, I debated my good friends, Kurt Campbell and Michael Schiffer and Frank Jannuzi and others in these proxy debates, where McCain was a pure free trade guy and we just clobbered the Obama side because they were opposed to everything. Of course, they said they were opposed to NAFTA. They were silent on the new TPP idea, but they moved quickly because it was in the national interest because there were key constituencies and increasingly those constituencies are Democrats. So I'm not sort of despondent about trade in the medium to long run. I just think we need a way to signal leadership and engagement early and I'm very attracted to the idea of sectoral agreements, the digital environment.
Mike Green: In APEC in the past they’ve talked about facilitation for green goods, you could reduce tariffs. Reducing tariffs on green goods could be very popular in the Democratic Party. So I think there are ways to get there. It is a little discouraging, and it's early, but it is a bit strange we haven't heard any of those ideas out of the administration yet. But look, Katherine Tai has to be confirmed. The Commerce Secretary, I think still has to be confirmed, depending on when we broadcast this. So I can understand the hesitancy. But let's get in a little... Mireya, what's the worst case scenario? What happens if we don't move on this 10, 15 years down the road?
Mireya Solis: Well, I think that increasingly, the region moves on. And we watch them move in a very different direction. It's not just the ability for them to take on big initiatives, and we're not part of it. It is that they're moving a very different direction, right? Look at what we've done recently. I mean, of course, the USMCA was important, but that one survived because we already had NAFTA, we already had 20 plus years of integration there and there were a lot of inertias. But the other newer trade negotiations in Asia that we are pursuing in the past administration are bilateral phase one agreements with China and with Japan. In the meantime, the region is taking off with the mega trade agreements that believe in the value chain, and that are open for others to join. And that creates, I think, a real disconnect.
Mireya Solis: If we're going to make a case that we don't want China to be the all important economic and geopolitical influence in the region, and we're not centrally attached to the region, and if we're not part of those critical decisions when it comes to setting standards and rules, we're putting our companies at a disadvantage, and we're putting our diplomats at a disadvantage. And we're just becoming more aloof from the region because the region is not going to stay still and wait for us to figure out if we're going to sign on to these large scale trade agreements.
Mike Green: Let’s turn a minute to the Southeast, the ASEAN and Southeast Asia. One of the conundrums for the US in its trade strategy in Asia is how to engage ASEAN on economic issues. RCEP does that of course, because RCEP has all 10 ASEAN countries. US isn't in RCEP, it'd be very hard for us, as you can imagine, to do a trade agreement with Cambodia or Laos, because of human rights issues, let alone Myanmar, right? Bob Zoellick, when he was US Trade Rep and Deputy Secretary of State, had to patch together initiatives, where we'd have a framework for economic engagement with all of ASEAN, but then it was like a food court, some of them will do FTA, some of them would do PNTR and old trading relations.
Mike Green: It's tricky because it's a much easier sell for Japan or Korea in the US Congress, but a trade agreement that includes Myanmar, Laos, or Cambodia, that's tough. And yet, I think that's really the core of geopolitical competition. Japan and Korea are not going to join Team China, but ASEAN is in play it seems. People debate that, but it's much more in play than Northeast Asia, or India, for example. So have you given much thought to an economic strategy to help us with ASEAN, which of course is what is now our largest trading partner in Asia, after China and Japan, ahead of Korea, I think as a whole. Do you have any thoughts for us on the Southeast Asia piece of the economic architecture?
Mireya Solis: A few general comments. And I agree that ASEAN is critical, and the US should have a way to more effectively engage with them. And it's not just trade, it has to be part of a more comprehensive set of strategies and policies. One, as we repeatedly say, but it bears repeating; showing up, regional summitry matters. And the fact is that in the past four years, that was not the case. So I'm feeling more confident that the Biden administration understands this well. And we're not going to be the no show, because that really hurts our interest. Second, like not all of it has to be what we can negotiate. I think that it would be very beneficial if the United States were to curb its own unilateralism, when it comes to trade measures and policy predictability.
Mireya Solis: So a lot of what is also disconcerting for us and in other countries is the fact that the United States has resorted to tariffs very freely , but also in the past administration, there was a very inconsistent approach on messaging and the inter-agency process was not working. So again, we're thinking about how we rebuild in our approach to ASEAN, I think that curbing unilateralism and policy predictability are important ingredients. Third, again, we're talking about ASEAN countries, we're talking about trade dependent, smaller economies, many of them. And I think that that type of economy actually does well when the multilateral trading system does well. So one way we can help ourselves in the region, is if we're not seen as a destructive force in the WTO, boycotting the appointment of the next Director General or not moving forward with how we resolve disputes among countries by blocking nominees to the appellate body.
Mireya Solis: So again, I think that it might be a little bit removed. But I do think that it's important for the US to be a responsible leader in trade. And that's the things that mattered for these countries. Then, I think also, because trade is hard, I think that the US could also step up its efforts on infrastructure finance. And we have some collaborations with Japan and Australia, that have remained small. And I think it would be time to step up, and to think about what we can do for building up the region. And finally, I think that maybe some ASEAN countries are a little bit reluctant, because they might see a US approach immediately being seen in the light of great power competition and how they're going to navigate this. And I think that it's important to send the message that trade agreements are not security alliances. They have overlapping memberships. And therefore, I think that by not presenting this as an either or you trade with us, or you trade with China approach to specific trade negotiations, I think this already would assuage some concerns that countries have in the region.
Mireya Solis: So again, I think it's helpful that the Biden administration is not defining competition with China as zero sum, as ideological. It’s not about containing China. And what we need to do is actually show them a number of initiatives where we can engage. And to me, this is the biggest question and we keep coming back to it Mike but, it is, can we offer that positive vision, that confidence that we believe that integration works for everybody, and that there are benefits to be shared? Or not? Are we going to be in a defensive crouch? And that's something I think the region is willing to see what happens next.
Mike Green: Yeah, and there are ways you've described with us today that they could send that signal very clearly. And especially in Southeast Asia, where... I worry, the signal for the past four years has been black and white. It's been John Foster Dulles in the 1950s. You're either with us, or you're with the communists, and that's not going to work in Southeast Asia. So helping with infrastructure, trade agreements, as you described, is a smart play. Hey, let's end with some really quick think tank gossip for everybody listening. So you're running Asia at Brookings, and I'm trying to herd the Asia cats at CSIS. Tell me if you can, how are you guys thinking about the role of Brookings, the role of think tanks on Asia policy with a Biden administration that's internationalist, so you don't have to tell them where the door is and where the windows are in the room.
Mike Green: But we're in a new chapter of strategic competition with China that's being defined. So how are you guys thinking about Brookings’ role in both helping but also challenging this new administration?
Mireya Solis: Well, mostly what I'm thinking, because I don't know that we have consensus. We'd like to have constructive disagreements and discussions. But, first of all, I think that just having an administration that values experts already creates an expertise in the region creates more windows of opportunity for us to be able to present our ideas in a way in which they might be entertained, not always adopted, but at least critically examined. So, that already is a big opening. I also again, think that at least the way I think of my own work, one thing that I've tried to convey is the importance of not thinking of Asia policy just through the China policy angle, that there's so much more to the region, and certainly Japan plays a very important role. And again, I don't think I have to preach to anybody in the new team. I think that there is that understanding, but again, that Japan can do quite a bit, and that we should be leaning on that partnership.
Mireya Solis: But for me, again, I have not yet seen the opening for these ideas about economic statecraft that are not just what we call as economic security, defensive measures. It's not the FDI controls. It's not just the export controls. But again, it's this whole other arena of trade, integration of investment, of digital, of supply chain. I'm hoping that when that moment comes, I'll be ready and very eager to have that conversation. And again, it's only February so I'm sure that these conversations are happening. But it would be very important because we know that everyone in the region is watching closely, to have those signals sent sooner rather than later.
Mike Green: And thanks for joining us today. And continuing to hit that bell, because we will not let them off the hook. It is an administration that listens to experts and it says and I think believes it will focus on allies. But if you don't have a trade strategy in Asia, you're not going to have a winning strategy. And I think they know that. So I think you're doing them a big favor by pointing these things out and starting to think about steps they can take within the political context that we obviously face in the US right now. So Mireya, thank you very much. Last quick question. What's the next big project for you?
Mireya Solis: Well, I'm writing a book on Japan's international role. It's a deep dive, it’s trying to explain why Japan actually... the expectation for many was that Japan would be eclipsed. And on the contrary, Japan actually has achieved political stability, adjusted to globalization and has a very robust economic statecraft. There are many issues that Japan is confronted with. But I think that those strengths and assets do not get sufficient recognition. So, that is what I'm working on.
Mike Green: Terrific. I hope you come back on this podcast to talk about it. And looking forward to it. Thank you very much.
Mireya Solis: Thank you. My pleasure.
Andrew Schwartz: Thanks for listening. For more on strategy and the Asia Programs Work, visit the CSIS website at csis.org and click on the Asia program page.