Bloomberg News

Obama Heads to Asia as Clinton Touts Region’s Importance

November 17, 2012

President Barack Obama arrives in Asia later today on his first foreign trip since re-election, underscoring the region’s importance to U.S. growth as his administration seeks to harness economic opportunities abroad.

Secretary of State Hillary Clinton reached out to China and touted Asia’s growth prospects in a speech yesterday that mapped out a foreign policy focused more on economic strength than military might. Obama’s trip signals the U.S.’s increased focus on Asia with the conflict in Iraq over and the war in Afghanistan winding down, Clinton said in Singapore.

“Why is the American president spending all this time in Asia so soon after winning re-election?” Clinton said, according to the transcript of a speech she gave as part of her third visit to the region since July. “Because so much of the history of the 21st century is being written here. America’s expanded engagement in the region represents our commitment to help shape that shared future.”

SLIDESHOW: Obama in Myanmar

The trip comes in the middle of negotiations with Congress to avoid automatic spending cuts that would shock the economy and reduce defense outlays. Clinton sought to reassure leaders in Asia that U.S. lawmakers would reach a deal to “once again prove the resilience of our economic system and reaffirm America’s leadership in the world.”

Thailand, Myanmar

Obama arrives in Thailand today and meets with Prime Minister Yingluck Shinawatra, whose government announced this week it would consider becoming the 12th country to join the Trans-Pacific Partnership, Obama’s top trade priority and one that includes four other members of the Association of Southeast Asian Nations. The next day he becomes the first sitting U.S. president to visit Myanmar before joining a series of Asean- organized meetings in Phnom Penh, Cambodia.

“We felt it was very important to begin this trip by visiting a U.S. ally,” Ben Rhodes, deputy U.S. national security adviser, told reporters traveling to Asia with Obama on Air Force One, referring to Thailand. “Allies are the cornerstone of our rebalancing effort in Asia.”

Clinton encouraged China and other Asian countries to join the TPP, which she said the U.S. would combine with other regional trade agreements to reshape global commerce.

“We continue to consult with Japan, and we are offering to assist with capacity building so that every country in Asean can eventually join,” Clinton said. “We welcome the interest of any nation willing to meet the 21st century standards of the TPP -- including China.”

Chevron, Boeing

The trade agreement is part of a U.S. strategy to focus more on using its global resources to benefit its economic interests. The U.S. will use its diplomats at more than 270 embassies and consulates to advocate for firms such as Chevron Corp. (CVX:US), Boeing Co. (BA:US) and General Motors Co. (GM:US), Clinton said.

“For the first time in modern history, nations are becoming major global powers without also becoming global military powers,” Clinton said. “So to maintain our strategic leadership in the region, the United States is strengthening our economic leadership as well. And we know that America’s economic strength at home and our leadership around the world are a package deal.”

Asean is set to start talks on Nov. 20 on a trade area rivaling the TPP that combines the bloc’s separate agreements already signed with China, Japan, India, South Korea, and Australia and New Zealand.

Indonesia, Southeast Asia’s biggest economy, will be putting all its “energy and resources” on the Asean-led deal, Trade Minister Gita Wirjawan told reporters in Phnom Penh yesterday. Indonesia’s government is unsure the TPP would benefit the country, he said.

Island Disputes

China’s disputes with Japan, the Philippines and Vietnam over contested islands may thwart talks on the Asean-led trade deal, which includes an area with more than 3 billion people accounting for about a quarter of the world’s gross domestic product. The territorial spats are likely to surface at the East Asia Summit, where Obama will meet with Chinese Premier Wen Jiabao, Japanese Prime Minister Yoshihiko Noda and other leaders.

China has demanded that Japan withdraw from its September purchase of the islands, known as Senkaku in Japan and Diaoyu in China. Anti-Japan protests have reduced China sales at Toyota Motor Corp. (7203), Nissan Motor Co. and Honda Motor Co.

“China has huge stakes in the South China Sea,” the official Xinhua News Agency cited Vice-Foreign Minister Fu Ying as saying yesterday. “While having some outstanding issues, the Asian region has maintained peace and stability in general,” she said, according to the report.

Hotline

Indonesia proposed establishing a hotline between China and other claimant states to prevent disputes from escalating. Chinese and Philippine vessels squared off earlier this year over the Scarborough Shoal, a land feature in the South China Sea claimed by both countries.

“It’s just a commitment to communicate whenever the situation requires it,” Indonesian Foreign Minister Marty Natalegawa said in an interview yesterday. “I know it sounds very basic, but it is one quality that is often missing when an incident takes place or occurs. Instead of communicating, we tend to withdraw into our own shells.”

Asean is urging China to start negotiations on a code of conduct in the South China Sea, which the region’s biggest economy has resisted since July. The bloc has sought to mend differences over how to handle disputes in the waters that were exposed at a July meeting when countries failed to agree on a communique for the first time in Asean’s history.

“The challenges are getting much closer to home, affecting confidence, having some implications of foreign investment coming in,” Surin Pitsuwan, Asean’s secretary-general, told reporters yesterday. “All these things I think are putting a sense of urgency on all the Asean countries that we should move in the same direction.”

To contact the reporters on this story: Daniel Ten Kate in Phnom Penh at dtenkate@bloomberg.net; Shamim Adam in Phnom Penh at sadam2@bloomberg.net

To contact the editors responsible for this story: Paul Tighe at ptighe@bloomberg.net; Peter Hirschberg at phirschberg@bloomberg.net


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