East Asian Summit: Issues for Congress

East Asian Summit: Issues for Congress

Order Code RS22346
December 9, 2005
CRS Report for Congress
Received through the CRS Web
East Asian Summit: Issues for Congress
Bruce Vaughn
Analyst in Southeast and South Asian Affairs
Foreign Affairs, Defense, and Trade Division
Summary
Fundamental shifts underway in Asia could constrain the U.S. role in the
multilateral affairs of Asia. The centrality of the United States is now being challenged
by renewed regionalism in Asia and by China’s rising influence. While the United States
traditionally has played a central role in setting the agenda and shaping the goals for
multilateral cooperation in the region, including the Asia Pacific Economic Cooperation
(APEC) group, there is the potential that the upcoming East Asian Summit, to which the
United States has not been invited, could lead to a new regional forum led by China that
would exclude the United States and increasingly displace APEC, and other more
inclusive fora, as the leading multilateral grouping of Asia. Although there are a number
of obstacles to the realization of an East Asian bloc that would limit American influence
in the region, some observers are of the opinion that the United States should take
further steps to reinforce its own regional role and revitalize ties with allies, friendly
countries, and others to deter that possibility.
The East Asian Summit: Background and Context
The new East Asian Summit (EAS) scheduled to meet on December 14, 2005 in
Kuala Lumpur, Malaysia will bring together the ten Association of Southeast Asian
Nations (ASEAN), [Brunei, Burma, Cambodia, Indonesia, Laos, Malaysia, Philippines,
Singapore, Thailand, and Vietnam] as well as the “plus three” states [China, South Korea,
and Japan] and Australia, New Zealand, and India, to discuss issues of common concern.
Japanese officials have described the EAS as an “historic summit meeting to be held with
a view to establishing a future East Asia Community.”1 Such a group could potentially
replace APEC as the main multilateral forum in Asia on trade and investment
liberalization and economic integration. It has been reported that Russia has been invited
to attend the EAS as a special guest.2 The EAS will follow shortly after a number of other
ASEAN summits being held in Kuala Lumpur including the December 12-13, 2005
ASEAN summit, the first ASEAN-Russia Summit, the ASEAN-Japan Summit, the
1 Embassy of Japan, “General Information on the East Asia Summit,” December 7, 2005.
2 “ASEAN to Invite Russia as “Special Guest” to EAS,” Jiji Press, November 29, 2005.
Congressional Research Service ˜ The Library of Congress

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ASEAN-South Korea Summit, and the ASEAN-India Summit.3 The EAS will also
immediately precede the Hong Kong gathering of the 149-member World Trade
Organization (WTO) which will address the next steps in the Doha Round negotiations
to liberalize global trade.
Kishore Mahbubani, formerly a senior official in Singapore’s Ministry of Foreign
Affairs and Trade, has stated that history will view the EAS as the real beginning of the
Pacific century.4 The EAS is viewed as important not only because of its implications for
regional trade but more importantly for its potential importance as an indicator of China’s
rising geopolitical importance. It is also of importance because the positions of regional
states relative to China and the United States are brought into perspective as the
diplomacy surrounding the summit unfolds. The EAS is viewed as potentially of strategic
importance because many believe that it could form the basis of a future East Asian
Community, which might make collective agreements on trade or even security affairs
without U.S. input. As such, regional states have sought to be included in the summit so
that they will not be excluded from any future East Asian Community.
The United States has not played a role in the China-led EAS process nor has it been
invited to attend. What is of concern to some analysts is that this appears to be a potential
challenge to American involvement in what could become the dominant regional order.
Some fear that by shifting emphasis from APEC, an organization in which the United
States has played a leading role and which encompasses the broader Pacific Rim, to an
East Asian Summit, in which the United States appears likely to play no direct role,
America’s overall position could become relatively less influential and the United States
could potentially be excluded from preferential trade agreements. Though President Bush
attended the APEC gathering in Busan, South Korea in November 2005, that gathering
is being viewed as “trumped” by the December 2005 EAS meeting.5 APEC, however, is
primarily a trade and economic organization. A major strategic consideration is that
APEC includes Taiwan whereas the EAS does not.6
Membership Issues. Some view the inclusion of India, Australia, and New
Zealand as a partial balancer to the geopolitical weight of China within the grouping.7
This is thought to be the perspective of countries such as Singapore, Japan, Vietnam, and
Indonesia though other states are thought to be relatively comfortable with China’s role
and an ASEAN Plus Three format.8 Some observers believe that despite its acceptance
of the current membership of the EAS, China actually favors a future East Asian
Community based on the more restricted membership of the ASEAN Plus Three states.
3 B. Moses, “Ushering in a New Era of Regional Cooperation,” New Straits Times, Nov. 20, 2005.
4 “Rising Unity in East Test for Global Trade,” New Zealand Herald, Nov. 19, 2005.
5 Jeffery Garten, “Battle of the Summits; Asian States Want to Hedge Against Protectionism in
the U.S. and EU with Stronger Regional Trade Strategies,” Newsweek, Nov. 21, 2005.
6 See CRS Report RL31038, Asia Pacific Economic Cooperation, Free Trade, and the 2005
Summit in Busan, Korea, by Emma Chanlett-Avery.
7 Clarissa Oon, “West is Welcome in ASEAN plus 3,” Straits Times, Nov. 1, 2005.
8 “China’s Power Play,” Asian Wall Street Journal, Aug. 1, 2005, and “US Tries to Unravel East
Asia Summit Puzzle,” Agence France Presse, Oct. 23, 2005.

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This would exclude Australia and New Zealand, which are more closely aligned with the
United States, as well as India, China’s traditional rival in Asia which is in the process of
developing closer ties with the United States. This issue came to light as China reportedly
favored a draft joint declaration for the summit which would portray ASEAN Plus Three
states as having a dialogue with India, Australia and New Zealand at the summit. Japan
reportedly has opposed such a definition of the grouping. India reportedly opposes any
joint declaration that does not imply that the EAS will form the basis of a future East
Asian Community.9
To some, the EAS is a extension of the East Asian Economic Caucus (EAEC)
concept put forward by former Prime Minister Mahathir Mohammed of Malaysia. The
EAEC was a revised version of Mahathir’s 1990 East Asian Economic Group (EAEG)
concept.10 The EAEC was to exclude non-Asian states, such as the United States,
Australia, New Zealand, and Canada. The United States was opposed to such an exclusive
East Asian grouping, and Japan reportedly worked to thwart it while Australia promoted
the APEC grouping which includes all states concerned.11 The evolution of the East Asian
Community concept, of which the EAS is the latest manifestation, evolved further when
ASEAN joined with China, Japan, and Korea in 1997/1998 to form the ASEAN plus three
grouping.12
United States Position. Singaporean Foreign Minister George Yeo stated after
a meeting with Secretary of State Rice in February 2005 that the United States “has some
concerns that the East Asian Summit will be inward looking and exclusive.”13 The United
States has been criticized by regional states for not paying enough attention to Southeast
Asia. This was highlighted by Secretary of State Condoleezza Rice’s decision to break
with tradition and not to attend the July 24-29, 2005 ASEAN Ministerial meeting in
Vientiane, Laos. Some interpreted this move as “a sign that the United States was ceding
the region to China.”14 The Administration has indicated that the EAS agenda is not clear
and that it continues to support APEC as “by far the most robust, multilateral grouping
in Asia.”15 Despite the perceived lack of attention by the U.S., the United States and
ASEAN announced a Joint Vision Statement on the ASEAN-U.S. Enhanced Partnership
just prior to President Bush’s meeting with ASEAN leaders on the sidelines of the
November 2005 APEC meeting in South Korea.16 A Singaporean Foreign Affairs
spokesman greeted the Joint Vision Statement by stating that “The enhanced partnership
9 “Japan, China Clash Over East Asian Summit,” The Yomiuri Shimbun, Nov. 25, 2005.
10 M. Leifer, Dictionary of the Modern Politics of Southeast Asia, (New York: Routledge, 1995).
11 F. Fukayama, “All Quiet on the Eastern Front?” Wall Street Journal, Mar. 1, 2005, F.
Fukayama, “America’s Challenge in Asia,” Asian Wall Street Journal, Mar. 2, 2005, and “US
Concerned Over ‘Exclusive’ Nature of Upcoming EAS,” Agence France Presse, Feb. 25, 2005.
12 “Ushering in a New Era of Regional Cooperation,” New Straits Times, Nov. 20, 2005.
13 “US Concerned Over Exclusive Nature of EAS,” Agence France Presse, Feb. 25, 2005.
14 G. Kessler, “Rice is Criticized for Plan to Skip Summit,” The Washington Post, July 12, 2005.
15 Senior Administration Official, Foreign Press Center, Department of State, Nov. 10, 2005.
16 “US, ASEAN Agree on Enhanced Partnership,” Dow Jones News, Nov. 17, 2005.

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... will substantially broaden the US’ engagement with ASEAN ... and will better position
both sides to meet the challenges ahead.”17
China’s Posture. China’s approach to multilateral institutions which involve
ASEAN has undergone a transformation as have Southeast Asian states’ perceptions of
China. China has evolved from viewing multilateral institutions in Southeast Asia as
potentially constraining to viewing them as useful for promoting China’s foreign policy
objectives.18 Southeast Asian states’ views of China have evolved as China has abandoned
its support of communist insurgencies in the region, been less assertive in the South China
Sea, and has embarked on diplomatic and trade initiatives. Since taking office in March
of 2003, President Hu Jintao has traveled extensively in the region.19 Some view the
current drive for the creation of an East Asian Community as having roots in the
perceived failure of the United States to effectively respond to the 1997/98 Asian financial
crisis.20 At that time, China gained much favor by not devaluing its currency and by
providing a reported $US 4 billion in aid to affected countries at a time when the United
States’ response was not viewed positively by regional states. China is also developing
defense cooperation with Indonesia, Malaysia, and the Philippines. China views the
region as key for its energy security both as a region through which its energy flows (some
80% of China’s oil imports flow through the straits of Malacca) as well as a region from
which China can derive energy resources.21
China-ASEAN trade exceeded $100 billion in 2004, a 30% increase over 2003
levels.22 The rapid growth in trade between China and regional states provides the
economic ballast for a broader relationship that may increasingly encompass political and
security linkages as well. China and ASEAN have signed a Free Trade Agreement and are
negotiating to reduce tariffs to between zero and 5% on certain goods by 2010 and by
2015 for poorer members of ASEAN.23 The combined gross domestic product (GDP) of
Asian countries is approximately 22% of the world total while the United States and
Europe account for approximately 28% and 30% respectively.24 Asia has experienced
17 Ministry of Foreign Affairs, Singapore, “Press Statement, Joint Vision Statement on the
ASEAN-US Enhanced Partnership,” November 17, 2005.
18 Kuik Cheng-Chwee, “Multilateralism in China’s ASEAN Policy: Its Evolution, Characteristics,
and Aspirations,” Contemporary Southeast Asia, April 2005.
19 “Here’s Hu,” The Economist, Nov. 5, 2005.
20 Daniel Sneider, “Asian Powers Outgrowing American Leadership,” San Jose Mercury, Nov.
11, 2005.
21 “China Makes its Presence Felt,” Oxford Analytica, Sept. 16, 2005. For further information see
CRS Report RL32882, The Rise of China and Its Effect on Taiwan, Japan, and South Korea: U.S.
Policy Choices, by Dick Nanto and Emma Chanlett-Avery, and CRS Report RL32688, China --
Southeast Asia Relations: Trends, Issues, and Implications for the United States, by Bruce
Vaughn.
22 Lindsay Beck, “China Looks to Extend Reach South,” Reuters, July 25, 2005.
23 “ASEAN Trade Talks with Region Hit Snag,” Agence France Presse, Dec. 8, 2005.
24 “As the Year Ends so too does a Season of East Asian Diplomacy,”Asahi Shimbun, Nov. 15,
2005.

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much higher rates of growth than the U.S. and Europe in recent years and this trend is
widely expected to continue.
Southeast Asian Perspectives. There are a range of perspectives within
ASEAN on the EAS and China’s evolving role in a potential East Asian Community.
While all invitees to the EAS see value in developing diplomatic and trade relations with
China, some are more concerned than others that China’s potentially preponderant
influence should be balanced. Singapore has taken a leading role in articulating the
benefits of an open regional framework for Southeast Asia. Prime Minister Lee Hsien
Loong has stated “ASEAN does not want to be exclusively dependent on China, and does
not want to be forced to choose sides between China and the United States or China and
Japan.” He also reportedly stated “if the world is split up into closed blocs or exclusive
spheres of influence, rivalry, antagonism and conflict are inevitable.”25 Singapore has
supported India’s inclusion in both the East Asian Summit and India’s bid for a permanent
seat on the United Nations Security Council.26 Singapore also seeks continued U.S.
engagement in the region. Burma and Laos are viewed as already significantly under
China’s sphere of influence in Southeast Asia.27
Other Perspectives. It is not only Southeast Asian states that are feeling the pull
of China’s diplomatic initiatives; “loyal allies of the United States such as Japan, South
Korea, and Australia already feel the magnetic force of a new geopolitical pole.”28
Australia reversed its previous policy on the ASEAN Treaty of Amity and Cooperation
and signed the treaty which enabled it to attend the meeting. It is unclear to what extent
current tensions between Japan and China will hinder the EAS. China has reportedly
postponed discussions involving Japan which were to take place on the sidelines of the
EAS.29 This, and Japan’s perceived declining regional influence, may have contributed
to enthusiasm among others to include India, Australia, and New Zealand in the group.
Some view recent developments in America’s bilateral relationship with India as in part
inspired by a desire to build ties with another regional state which may not be comfortable
with a rapidly expanded Chinese position.30 China was recently able to gain observer
status to the South Asian Association of Regional Cooperation, the main multilateral
grouping in South Asia.31
Implications for U.S. Policy
Some have asked why the United States should be concerned with an EAS that has
yet to demonstrate that it will be a threat to American influence in Asia. Others argue that
25 Tor Ching Li, “China Can Transform Asian Landscape: PM,” Today (Singapore), Oct 26, 2005.
26 P.S. Suryanarayana, “Singapore Sees India, China as Pace Setters for Economic Growth of
Other Asian Countries,” The Hindu, Oct. 26, 2005.
27 Ross Terrill, “What Does China Want?” Wilson Quarterly, Autumn, 2005.
28 “Meeting the Superpower: George Bush Should Treat Meeting China as an Opportunity, Not
Just a Threat,” The Economist, Nov. 19, 2005.
29 “China Postpones Summit with Japan, South Korea,” Press Trust of India, Dec. 4, 2005.
30 “Bush Adopts New Strategy on China,” Oxford Analytica, Nov. 18, 2005.
31 “Summit or Trough?” The Economist, Nov. 19, 2005.

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it will lead to a reduction in influence that would limit America’s ability to promote its
values or look after its interests whether they be economic or strategic. To some,
America’s preoccupation with Iraq has been a distraction that has led it to underestimate
the importance of evolving geopolitical dynamics in Asia including the EAS.32
The gathering momentum behind the EAS comes at a time when APEC is generally
perceived to have lost momentum. There is an increasing perception that APEC, which
has 21 members and was established in 1989, is disintegrating into regional and bilateral
blocs and that it does not have the leadership necessary to meet future challenges. Some
feel that a return to APEC core issues of trade liberalization and the reduction of trade
barriers is the best way for APEC to regain its momentum.33 Australia, which played a key
role in the development of APEC, will be the 2007 Chair of APEC. A question is whether
the United States should take additional measures to strengthen APEC. This would also
keep Taiwan from becoming increasingly isolated.
To some, the key question concerning the EAS is whether China’s leadership “will
be benign or will it be aimed — or be perceived by the U.S. as being aimed — at limiting
or replacing Washington’s (and Tokyo’s) influence in the region.”34 China’s actions
through the Shanghai Cooperation Organization, (SCO) which includes China, Russia,
Kazakstan, Tajikistan, and Uzbekistan, and Kyrgyzstan, are viewed by some as
challenging America’s regional presence.35 The SCO asked in July 2005 for a timetable
for the withdrawal of U.S. coalition forces in Central Asia.36 China’s potential opposition
to America presence in a region that it may increasingly see as within its sphere of
influence may portend future postures relative to American forces elsewhere in Asia.
Developing a constructive relationship with China is generally viewed as the most
significant foreign policy challenge for the United States in Asia, and possibly the world,
in the years ahead. How the United States reacts to China’s bid to more centrally position
itself in Asia, as demonstrated by the EAS, is an important component of this challenge.
A policy approach that seeks to continue to foster the peaceful rise of China appeals to
many.37 Some feel that it is important that American policy on the East Asian Summit, or
the potential future East Asian Community, not be interpreted by China as an effort to
contain China but rather as a policy initiative to demonstrate that America seeks to remain
an active and constructive actor in Asian multilateral affairs and that it supports the
constructive integration of China into regional and world affairs.
32 Hugh de Santis, “The Dragon and the Tigers: China and Asian Regionalism,” World Policy
Journal, Summer 2005.
33 “APEC Must Streamline and Focus to Survive: Lowey Institute,” Australian Associated Press,
October 17, 2005 and Geoffrey Barker, “Altogether Now, Asia Shapes its Future,” Australian
Financial Review, Oct. 1, 2005.
34 Ralph Cossa, Simon Tay, and Lee Chung-min, “The Emerging East Asian Community: Should
Washington Be Concerned?” Pacific Forum, (CSIS) August 2005.
35 “Aphorisms and Suspicions: Special Report on China’s World Order,” The Economist, Nov.
19, 2005.
36 Craig Simons and Dan Chapman, “Diplomacy Underlines U.S. Bid to Reel in China,” The
Atlanta Journal, Nov. 20, 2005.
37 “Climbing the Great Wall,“ The Wall Street Journal, Oct. 20, 2005.