Contents

Bush’s Foreign Policy

China and Taiwan: The First Challenge

Missile Defense: A New Arms Race?

Tougher Stand on North Korea

Japan: Rallying Behind Allies

South Asia: Defusing a Standoff

Southeast Asia: Crisis in Indonesia

Trade and Fear of a U.S. Economic Slowdown

Specialists

Further Reading

The election of Republican George W. Bush as U.S. president isn’t expected to produce many abrupt changes in American policies toward Asia. For starters, Bush’s views aren’t radically different from those of his Democratic predecessor, Bill Clinton. Both are internationalists, free traders, and representatives of the moderate center of their political parties. Most foreign policy analysts say the differences will be ones of degree, not kind, and that Asia should expect more continuity than discontinuity.

Unlike most other recent presidents, Bush hasn’t demonstrated much interest in foreign policy. Apart from his visits to neighboring Mexico as governor of Texas, Bush is known to have traveled abroad only three times as an adult. His only trip to Asia was to China in 1975, when his father was the U.S. envoy to Beijing. At least so far, Bush hasn’t indicated that he’ll be as active as his predecessor on the world circuit.

Still, some general themes have emerged in the pronouncements of Bush and his advisors that suggest some subtle foreign policy shifts. "The things his aides have said suggest a more minimalist policy," says Andrew Bennett, a professor of government at Georgetown University. "I expect Bush will be more unilateralist and somewhat less internationalist with regard to the use of force."

Although Bush has little foreign policy experience, he has surrounded himself with a coterie of foreign policy and security veterans from the earlier Republican administrations of George Bush, Sr., Ronald Reagan, and Gerald Ford. Vice President Dick Cheney was a former defense secretary; Secretary of State Colin Powell was a former chairman of the Joint Chiefs of Staff; Secretary of Defense Donald Rumsfeld is returning to a post he held 25 years ago; and National Security Council chief Condeleeza Rice previously covered Russia in the NSC. This group of senior advisors is heavy on defense experience and doesn’t have much practical knowledge of Asia or know much about the economy. They also don’t seem to be as focused on human rights and democratization as outgoing Secretary of State Madeleine Albright.

But Bush’s second tier of advisors is expected to have substantial Asia expertise. Paul Wolfowitz, a possible head of the Central Intelligence Agency or deputy secretary of defense, was formerly one of Cheney’s top Pentagon aides and served as assistant secretary of state for Asia. Wolfowitz has also served as ambassador to Indonesia. Richard Armitage, who is expected to be nominated for a top-level post, did several tours of duty during the war in Vietnam and filled senior Pentagon and State Department posts in previous Republican administrations. Armitage also negotiated the agreement terminating the U.S. bases in the Philippines. Robert Zoellick, considered a leading candidate for the number two post at the Treasury Department served in the Treasury Department and as White House deputy chief of staff. Zoellick played an active role in helping set up the Asia-Pacific Economic Cooperation grouping. James Kelly, a Navy veteran who worked in Reagan’s NSC and now serves as chairman of the Center for Strategic and International Studies Pacific Forum in Hawaii, is in the running for the State Department’s assistant secretary for Asia. The NSC’s top Asia post is expected to go to Torkel Patterson, a veteran of the Navy who worked in the Pentagon and NSC under Bush’s father. In recent years, Patterson has run a consulting firm that focuses heavily on Japan.

Bush’s management style of making foreign policy by committee could leave considerable room for his cabinet secretaries and senior advisors to set policy. But Bennett says that Bush’s appointment of aides from different factions of the Republican Party could lead to a "bickering dance of advisors."

Judging by previous administrations, it could take months for the new administration to impose its imprint on foreign policy. First, hundreds of appointees will need to be confirmed by a Senate split 50-50 between Republicans and Democrats. Once these officials are in place, they will need to review the outgoing administration’s policies and commitments, before they can start developing their own priorities. Based on the experience of Clinton’s transition, it could be August or September before Bush has his foreign policy team in place.

Foreign affairs played a very minor role in Bush’s campaign against his Democratic challenger, Al Gore. Bush made one general foreign policy speech, another on trade relations with China, a third on missile defense, and two on defense issues during the election campaign. Campaign statements are often poor indicators of what a president will do once he’s in office, but they are all that foreign policy wonks have to rely on in the early months of an administration.

During the campaign, Bush walked a careful middle path between the internationalists of the Republican Party, who advocate engagement with great powers such as China, and the isolationists, who are wary of the United Nations, the World Trade Organization, and the International Monetary Fund. When he nominated Rumsfeld as defense chief in late December, Bush reiterated that he would charge ahead with building a missile-defense umbrella, a program that China, Russia, and many U.S. allies have warned could spark a new global arms race. During the campaign, Bush and his advisors pledged that American policy in Asia would concentrate on Japan and other allies that share democratic values and a commitment to the free market.

In his second debate with Gore, Bush outlined his philosophy for projecting American power abroad. "If we are an arrogant nation, they will resent us. If we’re a humble nation, but strong, they’ll welcome us," he said, trying to assure foreign nations that his administration would tread lightly. "I’m not sure the role of the United States is to go around the world and say, "This is the way it’s got to be." Bush stressed that he would be cautious about committing U.S. troops overseas and ruled out frequently using them for nation-building. "There are some moments when we use our troops as peacekeepers, but not often," he said in the final debate. Bush never defined what type of mission he would consider to be in the United States’ vital interest.

Candidate Bush also didn’t spell out how he would respond to a financial crisis such as the one that wracked Asia in 1997, but economic advisors such as Lawrence Lindsay of the American Enterprise Institute have been frequent critics of the IMF. "I think a lot of times we just spend aid and say we feel better about it and it ends being spent the wrong way," Bush said in his second debate with Gore. The president-elect added that the IMF often sends signals to international bankers that "if you make a bad loan, we’ll bail you out." But Bush was unequivocal in his support for a new global trade round and rejected attempts to include the labor and environmental standards supported by Gore.

Bush won’t have much time to get up to speed on foreign affairs before confronting his first challenges in Asia, home to over half the world’s population and a quarter of the global economy. Asia generates nearly $600 billion annually in two-way trade with the United States. Three of the world’s most dangerous political flash points are located on the continent. One of Bush’s first tests will come in North Korea, which in the final days of the Clinton administration signaled that Pyongyang wanted to negotiate terms under which it would end its missile program. A second challenge will arrive in the spring, when Taiwan makes its annual request for U.S. weapons. Bush could land smack in the middle of a dispute within the Republican Party over whether the U.S. should play a more active military role in backing Taiwan. Bush will have to make a decision about arms for Taipei while his advisors are still trying to figure out how to reduce tension in the Taiwan Strait and cobble together stable relations with Beijing.

In South Asia, the new administration will face a dangerous standoff over Kashmir between two nuclear-armed neighbors, India and Pakistan. And in Southeast Asia, democracy is facing some painful tests. Indonesia is threatened with disintegration, while the leadership in the Philippines, Thailand, and Malaysia is coming under fire. Japan continues struggling to overcome political and economic malaise. On top of that, the roaring U.S. economy has begun to slow down. Asians fear that a decline in American buying power could derail the region’s tentative recovery from the 1997 financial crisis.

China and Taiwan: The First Challenge

Taiwan could present the new administration with its first crisis. The first big test will come in April when Taiwan is expected to present its weapons-sales wish list. A key question to watch is how far the new administration goes in fulfilling Taiwan’s requests. Analysts predict that the Bush administration will set off a diplomatic row with Beijing if the U.S. agrees to sell Taiwan destroyers equipped with advanced Aegis radar and antimissile defenses. Clinton deferred a decision on these destroyers last year.

Analysts say Bush’s decision on arms sales to Taiwan will depend largely on the outcome of a debate over China within the Republican Party and among Bush’s advisors. On one side is the moderate foreign policy elite, including Rice and Powell. They believe in strategic management of U.S. relations with great powers and don’t feel ideologically driven. On the other side is the more radical activist wing, which sees an opportunity to push its ideological views and move closer to Taiwan. "A lot of bomb-throwing congressional staffers who sought to alter China policy [during the Clinton administration] may show up with foreign policy jobs" in Bush’s White House or State Department, says James Mulvenon, a China expert at the Rand Corporation.

A spat over U.S. policy toward China already erupted during the platform-drafting meetings before the Republican convention last August. Conservatives argued that their candidate should take a tougher stance toward Beijing, including efforts to halt China’s military modernization, and demonstrate more support for Taiwan. But others such as Bush national security advisor Rice recognize that China is a nuclear-armed power in Asia and argue that its threat must be defused through diplomacy.

Douglas Paal, who heads up the Asia Pacific Policy Center and served as NSC advisor on Asia in the administration of Bush’s father, says that Washington’s decision about arms sales to Taipei will depend on Chinese behavior over the next few months. In a report written after a visit to China and Taiwan in December, Paal said China’s continued buildup of missiles and other forces opposite Taiwan would affect the new administration’s policy. "It will be impossible for the new administration to ignore that reality in the interest of smooth relations with China–unless China modifies its deployments before April." Paal warned that there is "a risk of heightened political tensions" between the two capitals before the April talks. He said Beijing faces

Bush was an early champion of China’s membership in the WTO. But while supporting the need for the United States to engage China on trade, Bush regularly referred to Beijing as a "competitor" to differentiate his views from those of the Clinton administration, which has called China a "strategic partner." Like his recent Republican and Democratic predecessors, Bush supports the one-China policy, which recognizes Beijing’s claim that Taiwan is part of China, and insists on a peaceful settlement of the Taiwan issue. Bush differed from Clinton, however, in his support of the Taiwan Security Enhancement Act, which would pledge Washington to closer defense cooperation with Taiwan. Like other nonratified bills, the Taiwan legislation died with the outgoing Congress in December. Analysts don’t expect Bush and Republicans in Congress to resurrect the Taiwan bill unless tensions mount across the Taiwan Strait.

Neither Bush nor his advisors have said whether they might try to help jump start dialogue to reduce tension across the Taiwan Strait. Zoellick, an advisor to Bush during the campaign, told a gathering of Asia specialists in Washington in September that Bush recognizes that the United States must "do better liaison" with China, which is in the midst of a leadership "succession struggle." The advisor said he could foresee "a tense period" ahead in Beijing’s relations with Taipei, because China doesn’t trust Taiwan president Chen Shui-bian and is "playing to the opposition" in the legislature ahead of elections later this year. Zoellick said "it is very important for the next president right off the bat to make clear to Beijing that force will not succeed."

Bush advisors attribute part of their concern about Taiwan to its recent political evolution. "Taiwan has become a democracy," advisor Armitage says. "That’s inconvenient for some, but we happen to look at Taiwan not as a problem in U.S.-China relations but as an opportunity. It’s an opportunity for all of us to say that democracy counts."

The Bush administration will inherit from its predecessor continuing concerns about China’s proliferation of nuclear technology and sale of missile components to Pakistan and Iran. Shortly before the end of the Clinton presidency, China pledged to introduce more rigorous export controls in exchange for the United States waving sanctions it could have imposed for earlier arms exports. The incoming Bush team will no doubt monitor whether Beijing lives up to its commitment.

Washington is also concerned about violations of human rights, particularly the stepped-up persecution of the Falung Gong sect and repression in Tibet. When Congress approved legislation last September granting China Permanent Normal Trade Relations with the United States, the legislators also included an amendment setting up a bilateral commission to monitor and promote human rights in China.

Tensions over trade could surface once China is admitted to the WTO upon completion of its negotiations in Geneva sometime in the next few months. "China’s membership could open the floodgates to nasty trade disputes," Mulvenon says. "These will be fought tooth and nail in Geneva. You could see elements of the China relationship resemble relations with Japan in the mid-1980s."

In a January article in Foreign Affairs magazine, David Shambaugh, a China specialist at George Washington University and the Brookings Institution, urged Bush to involve China more actively in maintaining regional security. He argued that China will "remain fundamentally unstable" if it is excluded from or targeted by the regional security architecture. Shambaugh also challenged the Bush team’s view of U.S.-China relations, arguing that it was a "false" dichotomy to view China either as a strategic ally or as a competitor. Instead, the China scholar argued, U.S.-China relations are a mixture of both. Despite differences between the two sides, there are numerous areas in which the two governments have "complementary or convergent interests and can enjoy positive ties." As examples, Shambaugh listed efforts to stem the development of weapons of mass destruction, promote peace on the Korean peninsula, and reduce tensions in South Asia between India and Pakistan.

Bush advisors note that the new president will have his first opportunity to meet Chinese leaders when he travels to Shanghai for the Asia-Pacific Economic Cooperation forum in October. This meeting will likely set the tone of Sino-American relations for the next few years.

In the end, many analysts aren’t convinced that Bush’s China policy will differ that much from that of his predecessors once he moves into the White House on January 20. They point out that Reagan backed off from his campaign pledge to recognize Taipei, and that Clinton abandoned his shrill critique of Beijing’s human rights violations soon after taking office. "China policy won’t be markedly different," says Robert Manning, director of Asian studies at the Council on Foreign Relations who served as foreign policy advisor in the earlier Bush administration. "It will be a difference in style and tone." On top of that, China will find "some upsides" in dealing with Bush, says David Lampton, a China specialist at the Nixon Center and Johns Hopkins School of Advanced International Studies. As examples, Lampton says China will "hear less about the environment and workers rights" than it would have if Democratic challenger Gore had been elected.

Missile Defense: A New Arms Race?

Missile defense, a cornerstone of Bush’s national security policy, could be another source of friction with Beijing, as well as with Russia and U.S. allies in Europe. Bush pledged speedy deployment of the politically and diplomatically divisive shield as one of his top priorities when he nominated Rumsfeld as secretary of defense in December. The new president praised a 1998 bipartisan commission report, headed by Rumsfeld, that challenged U.S. intelligence reports claiming that it would be 15 years before any rogue state had the ability to launch a ballistic-missile attack on the continental United States. The Rumsfeld report claimed that either North Korea or Iran could have such weapons in less than five years. These conclusions, along with pressure from the congressional Republicans, prompted Clinton to step up efforts to deploy a missile umbrella estimated to cost about $60 billion. But after two test failures last year, Clinton concluded that the technology wasn’t ready for an effective missile defense and passed the decision about moving ahead to his successor.

Bush hasn’t spelled out in detail his proposed system’s architecture or size, or the cost or time frame for building it. In a speech last May he said, "Our missile defense must be designed to protect all 50 states and our friends and allies and deployed forces overseas from missile attacks by rogue nations or accidental launches." During the campaign, Bush implied that he would expand the system of 100 ground-based rockets proposed by Clinton and add sea-, air-, and space-based interceptors. The president-elect also suggested that he would include Japan and Taiwan under a regional umbrella. Bush said that he would not be restrained by prohibitions of the 1972 Anti-Ballistic Missile Treaty with Russia in pursuing a missile umbrella.

But Bush admitted that "there’s a selling job to do" to gain congressional support for missile defense. Congress is very evenly divided between Democrats and Republicans, and Democrats angered by Bush’s contested election victory in Florida or smelling victory in the 2002 midterm congressional elections haven’t said publicly whether they will feel emboldened to vote against appropriations measures to fund missile defense.

Some opponents of the program have expressed concern that the appointment of Rumsfeld, a forceful early advocate of the defense plan, could prompt the Bush administration to launch the program before the necessary research has been completed. "No proven technology yet exists for achieving this ambitious and expensive goal," the New York Times said in an editorial.

Mr. Rumsfeld owes the country a rigorous research and testing program to establish whether any of the proposed approaches can reliably evade decoys and destroy incoming warheads. Rushing forward with the construction before testing is complete will not make America any safer and could provoke needless dissension with key allies and a risky breakdown of international arms control agreements.

Secretary of State-designate Powell, who had expressed some reservations about missile defense prior to his appointment, admitted after his nomination that one of his first tasks would be to gain support for the missile umbrella abroad. Powell said the new administration would have to engage in more talks with U.S. allies and other countries that "don’t yet understand our thinking with respect to missile defense." Admitting foreign opposition to Washington’s plan for national missile defense (NMD) and theater missile defense (TMD), Armitage joked at a briefing for Asia hands in September that Washington could bolster its cause by changing the name to "AMD–allied missile defense."

Powell’s biggest challenge in Asia will come from China, which views a missile umbrella as destabilizing and has warned that it will link its own weapons development and nonproliferation policies to U.S. construction of a missile shield. Beijing says it is opposed to the plan because it will undermine the deterrent effect of its own nuclear missiles. If the United States builds a missile defense "space will become a new weapons base and battlefield," Sha Zukang, head of the disarmament department of China’s Foreign Ministry told the Washington Post last June. "Since other big powers will not sit and look on unconcerned, this will inevitably mean the extension of the arms race into space."

Shambaugh, in his Foreign Affairs article, points out that Beijing has warned that it will boost its nuclear arsenal at least tenfold, to 200-250 intercontinental ballistic missiles. The professor argued that a decision to move ahead with missile defense may undermine security rather than enhance it. Shambaugh said that moves to include Japan and Taiwan under the missile shield could turn into a "hot-button issue" that could "provoke a crisis or stimulate regional missile proliferation." China has threatened that a decision to include Taiwan under a missile shield would be grounds for Beijing’s use of force to retake the island.

In reality, Beijing started modernizing its weapons long before the United States began considering missile defense. "We’re not driving strategic modernization," says Bates Gill, a China specialist at the Brookings Institution. "That’s already happening." But Gill and other China specialists say the defense umbrella could influence Beijing’s decisions about how many weapons to build, how much time and money to invest in developing decoys to fool the system, and whether it should transfer this technology to countries like North Korea and Iran.

Security analysts warn that, if Beijing responds by boosting its current relatively small nuclear arsenal of about 20 intercontinental missiles, its regional competitor, India, and India’s rival, Pakistan, could follow suit. Joseph Cirincoine, who heads up the Carnegie Endowment for International Peace’s nonproliferation research project, believes that a U.S. decision to deploy a missile-defense system would "trigger a response from China that will reverberate in India." Pakistan, then, would respond to India, launching a regional arms race.

Cirincoine adds that for some U.S. conservatives, missile defense is meant to be a target against China, which besides Russia is the only country currently capable of striking the United States with long-range missiles. "When they talk about projecting power, it’s not North Korea they’re worried about," Cirincoine says. "It’s China. Conservative analysts think conflict with China is inevitable and the U.S. has to prepare for that."

Most analysts believe that Washington will build some form of missile defense. To reduce the risk of conflict with China, Gill and Mulvenon argue that it’s important for the United States to find ways to allay Beijing’s concerns. In an article in the Washington Post last year, the two China scholars called on Washington to continue discussions with Beijing and pursue issues China finds important. As examples, they cited U.S. ratification of the test-ban treaty and calls for India to restrain nuclear-weapons development.

Tougher Stand on North Korea

Bush’s other big challenge in Asia is North Korea, which offered a buzz of diplomatic overtures in the final days of the Clinton administration. The outgoing president flirted with the idea of visiting Pyongyang, but in late December he concluded that there wasn’t enough time to reach an agreement to rein in North Korea’s missile program before he left office. Clinton’s decision could mark the beginning of a long break in negotiations with Pyongyang. Bush advisors said almost nothing in public about Clinton’s efforts to engage Pyongyang, and analysts predict that it could take the new administration as long as a year to review U.S. relations with North Korea.

In 1994, the United States and North Korea negotiated an Agreed Framework under which Pyongyang agreed to stop producing nuclear weapons in exchange for fuel oil and several nuclear reactors. More recently, Washington shifted its focus to North Korea’s export of missile technology to Pakistan and Iran. Clinton sent former Defense Secretary William Perry to North Korea with a proposal to increase foreign aid in exchange for steps by Pyongyang to reduce its threatening military posture. In late 1998, Pyongyang agreed to a moratorium on further missile testing, pending the outcome of talks with Washington. During Secretary Albright’s visit to Pyongyang last October, North Korean leader Kim Jong Il offered to curb missile development. In exchange, Kim wanted foreign aid (as much as $1 billion, according to some sources) as compensation for lost income from missile exports and an agreement that the United States would launch three North Korean civilian satellites a year free of charge.

In the end, discussions bogged down when officials could not reach an agreement on how to verify that North Korea had stopped producing missiles. They also could not agree on how much of North Korea’s missile stockpile (estimated at around 100 missiles, although not all of them are deployed) would be destroyed and how much money Pyongyang would get to make up for lost missile exports. U.S. intelligence analysts differ on whether Kim is serious or merely trying to convince the West to cough up more foreign aid for a country suffering from a decade of economic decline, food shortages, and diplomatic isolation.

Most analysts believe that a Bush administration will be cooler toward North Korea than its predecessor. Armitage, one of those who had urged Clinton to launch what became known as the "Perry process," told a group of Asia watchers in September that the world so far has seen little more than heartwarming atmospherics from North Korea. He said Washington has to be "very wary" until it sees some concrete "military gestures" that lower hostilities on the Korean peninsula.

"Bush won’t do food for meetings," Manning of the Council on Foreign Relations says, alluding to the international aid to Pyongyang. "The Bush approach will be ‘If you want to deal, let’s talk. If you don’t, here’s our phone number.’" Manning, who was an advisor in the first Bush administration, said the new team would be "more prepared" to stop discussions if they weren’t making any progress and predicted that Bush would "revisit" the Agreed Framework.

Analysts say that the inauguration of the new administration will be the "moment of truth" in U.S. relations with Pyongyang. Nicholas Eberstadt, a North Korea specialist at the American Enterprise Institute, expects that questions about what is happening with North Korean missiles, nuclear weapons, and relations with South Korea are going to "come to a head very soon." One of the first things the Bush team will have to think about is how it will handle Pyongyang if it reacts with hostility to the changed priorities of the new administration, Eberstadt says. The Korea analyst believes the Bush administration will be less likely to provide large amounts of aid to help bail out the North Korean economy. "I expect to see more friction unless Pyongyang makes a historically unprecedented change," Eberstadt says. The regime is trying "to keep afloat without having to give up anything," he says, "without foreswearing weapons of mass destruction."

But Joel Wit, a former diplomat and Korea specialist at the Brookings Institution, believes that, in the end, Bush will take almost the same approach to Pyongyang as Clinton has taken. Wit says the complexities of North Korea will make it a difficult country for the new administration to review. "But after six months, they’ll do what Clinton did," Wit argues. He says the Republicans will come to the realization that "if you want to achieve your objectives you have to give something in return." The Brookings analyst believes that Washington has already made considerable progress in its dealings with North Korea. "We ended a big nuclear program. On missiles, we have a moratorium. Now we’re talking a bigger missile deal, but it will require something in return."

Others are convinced that the American alliance with South Korea will prompt the Bush team to continue engaging North Korea. Michael Green, a Japan and Korea expert at the Council on Foreign Relations, believes that Bush’s emphasis on cooperating closely with allies will keep the United States engaged with Pyongyang. "If we’re faithful to the alliance we have to let the South take the lead," Green says, alluding to President Kim Dae Jung’s "sunshine" policy of engagement with North Korea.

What about American troops in Asia? According to Armitage, it was "real mistake" by the Clinton administration to focus on the figure of 100,000: "We need to concentrate on what capabilities we need to effect security cooperation, rather than on an arbitrary number. The Bush administration will move away from an arbitrary number."

Japan: Rallying Behind Allies

During the campaign, Bush tried to differentiate his policy by stressing that America’s most important strategic partnership in Asia is with Japan. "Alliances are not just for crises," Bush declared repeatedly, mocking Clinton for not stopping in Tokyo or Seoul after his nine-day visit to China in 1998.

In October, a high-powered bipartisan group headed by Armitage and Joseph Nye, a former Democratic assistant secretary of defense, urged the next administration to reinvigorate the U.S.-Japan security alliance and make Tokyo a more active player in Asian security. The panel of former administration officials, think tank analysts, and congressional aides concluded that the development of U.S.-Japan relations has "wandered, losing its focus and coherence." The analysts said the time had come for American officials to pay more attention to "reinvigorating and refocusing" the U.S.-Japan alliance. Washington, they said, should make it clear that it would welcome Japan’s role as "a more equal alliance partner."

Citing the U.S. special relationship with Great Britain as a model, the 16 East Asia experts called for increased military cooperation and intelligence-sharing between Washington and Tokyo. They said the time had come for "burden-sharing to evolve into power-sharing." The group urged Japan to drop its self-imposed prohibitions against defense ties with South Korea and other Asian countries. "It is past time for the United States to drop the image of Japanese cooperation in foreign policy as checkbook diplomacy," they said.

Observers saw the report as an effort to redirect U.S. focus away from China, which Republicans say has preoccupied Washington under Clinton, and return to the traditional importance of the U.S.-Japan alliance. Green, of the Council on Foreign Relations who was a member of the panel, says "the Bush team will give Japan more room to show leadership in the region." He says the new administration wants to see Japan playing a bigger role in peacekeeping and cooperating with Washington on theater missile defense.

Neither Japan nor China has commented publicly on the group’s proposals, but Bush advisors have made it clear that they won’t be diverted from their goals by protests from Beijing about closer U.S.-Japan security ties. "If a Chinese general storms out of the room because we have an alliance with Japan, fine," advisor Zoellick says. "When he’s ready to talk, we’ll be there to talk."

Although Bush’s advisors agree with the Democrats that Japan’s return to economic health is essential for a thriving bilateral relationship, they roundly criticize the Clinton administration for how it has treated Tokyo. Bush economic advisor Lindsay told a December conference at the American Enterprise Institute that over the past eight years U.S.-Japan relations have been reduced to "a single concept: gaiatsu, or foreign pressure on Japan." The challenge for the next administration will be to "cut the volume of the rhetoric," Lindsay said. "In place of gaiatsu, we must substitute a policy of mutual cooperation and respect."

Japan isn’t the only Asian country that can expect to get more attention from a Bush administration. Armitage says that other allies including South Korea and "especially" Australia should be made more equal partners by receiving increased access to cutting-edge U.S. military technology.

South Asia: Defusing a Standoff

Bush and his advisors have said little about the third regional hot spot: South Asia. In 1998 nuclear tests by India and Pakistan ratcheted up the potential for war between these neighbors in their bitter, 50-year standoff over disputed Kashmir. The former British colonies have already fought three wars over the contested region and a fourth one is frequently threatened as India and Pakistan seek a military solution to the conflict.

The Bush campaign Web site made only one brief reference to South Asia, saying that the administration would work with India to increase trade and investment and ensure that India is a force for stability and security in Asia. One indication of Bush interest in the region is that Wolfowitz, one of his senior foreign policy advisors, recently visited India. Analysts say the Republican interest in India is both strategic and economic. Steven Cohen, a South Asia expert at Brookings, points out that some Bush aides see India as a counterbalance to China; others see it as a market.

The Bush campaign isn’t known to have said anything publicly about Pakistan, although Cohen speculates that the new administration might be less likely to use economic sanctions as an instrument of foreign policy. (Vice President-elect Cheney frequently criticized the use of economic sanctions as a foreign policy tool when he served as an oil company executive.)

Clinton’s groundbreaking visit to India in March 2000 marked a broadening of U.S. interest in India beyond the regional nuclear arms race. As India’s eight-years of reform have begun to take hold, the country’s economy has surged more than 6 percent a year, and its annual exports now top $30 billion. The United States, thanks to its interest in India’s world-class software-development skills, has become the country’s largest foreign investor. Although India remains reluctant to negotiate a nuclear arms control agreement, New Delhi has begun cooperating with the United States in a wide swath of activities ranging from information technology to energy security and regional stability to UN peacekeeping.

In the fall 2000 issue of the Brookings Review, Cohen urged the new administration to take advantage of India’s "new economic and strategic opportunities," while remaining "vigilant" about its problems, including its tug of war with Pakistan over Kashmir, the regional nuclear arms race, and serious human rights abuses. Cohen recommended that the new administration try to negotiate a free-trade zone with India to spur economic development and give American firms greater access to India’s billion-person market.

Cohen pointed out that increased U.S. security ties with New Delhi will be impossible as long as U.S. military sanctions, imposed on India and Pakistan after they carried out their 1998 nuclear-weapons tests, remain in force. The Brookings analyst is convinced that neither country will reduce its "small nuclear stockpiles," because each considers them "vital to security and important to prestige." As a result, Cohen suggests replacing the "present punitive sanctions-led policy" with "a grand bargain that emphasizes political security and mutual security." As part of an agreement, Cohen says India and Pakistan might limit the numbers of nuclear weapons they build and work more closely with Washington and international agencies to prevent their nuclear and missile technologies from proliferating to other countries.

The Brookings scholar also recommends that Washington should find a role for itself in the Kashmir dispute "somewhere between doing nothing and being an unwelcome intruder." Because India rejects an outside mediator, Cohen suggests that the United States limit its role to "persuasion and encouragement" and try to involve other countries like Japan that have aid and investment projects in both countries. As the new administration prepared to take power in Washington, a month-long cease-fire seemed to be holding in what Clinton had called "the most dangerous place on earth." Some analysts cautiously hoped that the Indian cease-fire accompanied by Pakistan’s announcement that it was pulling back troops from the front lines could lead to talks between India and Pakistan about the future of Kashmir. Of course, many things can still go wrong before substantive talks even get started.

Pakistan, an American ally during the war to oust the Soviets from Afghanistan, poses a daunting challenge for the new administration. The world’s sixth-most populous nation suffers from a declining economy and a growing number of radical Islamic groups. On top of that, its government has been run by the military since a 1999 coup. During a brief stopover in Islamabad in March 2000, Clinton called on Pakistan’s military leaders to restore democracy, seek a peaceful resolution to the conflict in Kashmir, and press the Taliban rulers in Afghanistan to stop sponsoring terrorist groups. Recognizing that "Pakistan’s fate is in the hands of its own citizens," Cohen recommends that the new president consider aid to "help shore up Pakistan’s civic institutions"–the courts, universities, administrative services, political parties, and trade unions–"to make this ‘last chance’ for Pakistan a success."

In the closing days of the Clinton administration, the United States and Russia pushed a resolution through the UN Security Council that imposed new sanctions on Afghanistan’s ruling Taliban. The measure tightened financial, diplomatic, and travel sanctions on the Taliban rulers for harboring alleged terrorists, particularly exiled Saudi millionaire Osama bin Laden, who is charged with masterminding the explosions at two U.S. embassies in Africa in 1998. In Sri Lanka, renewed fighting between government forces and the separatist Tamil Tigers has claimed scores of lives and displaced tens of thousands of people. The United States supports efforts by Norway and India to promote a negotiated settlement.

Southeast Asia: Crisis in Indonesia

Indonesia-the fourth-most populous country in the world, home to the largest economy in Southeast Asia, and an archipelago astride some of the world’s busiest shipping lanes-poses increasing security and economic concerns to the United States. Analysts acknowledge the difficulties foreign governments have in responding to the crisis in Indonesia. The United States and other countries are pressing President Abdurrahman Wahid’s government to root out military leaders responsible for past abuses in East Timor and Aceh. But Paal, the Republican foreign policy analyst, notes that Wahid’s political weakness and "administrative incoherence" make it unlikely that he can respond effectively to foreign pressure.

Paal adds that the deteriorating situation in secessionist Aceh Province leaves foreign creditors and donors with a "difficult choice." The dilemma is whether they should "punish the rest of impoverished and struggling Indonesia by withholding funds for what the army does in Aceh" or continue providing funds "while holding their noses, in the hopes of nurturing influence and better behavior over the long term," Paal says. "Do they risk disorder in the streets of Jakarta and other cities by harming the economy in an effort to stop actions in Aceh that Indonesia’s leaders believe are necessary?"

At a briefing for Asia hands in September, Armitage accused the Clinton administration of too much reproval and not enough encouragement in Indonesia. The Bush advisor said it was time for Washington and Tokyo to coordinate efforts to try to relieve "a further disintegration" of the Indonesian government. Instead of pursuing a policy of "sticks," Armitage suggested including "some carrots" that would offer "some hope" for the people of Indonesia and East and West Timor.

But neither Armitage nor Paal spelled out how Bush’s policy toward Indonesia might be different. Outgoing Secretary of State Albright has identified Indonesia as one of the four priority emerging democracies in American policy. The Clinton administration publicly supports Wahid despite his frequent erratic behavior, but it also condemns the military for failing to rein in militia forces in West Timor and resolve the East Timor refugee crisis. In August, the president lifted a yearlong ban on commercial military sales to Indonesia, but congressional prohibitions on military training and direct military sales, imposed after the violence in East Timor in 1999, remain in place. The State Department spent $125 million last year in helping strengthen Indonesia’s nascent democratic institutions, judicial system, and national and local parliaments.

Holding the diverse Indonesian archipelago together will pose a challenge. The abrupt end in May 1998 of Suharto’s 32-year rule and the transition to democracy have prompted the eruption of a litany of grievances along ethnic, religious, and geographic fault lines. Jakarta now faces secession movements from Aceh in the West to Irian Jaya in the East, while the Moluccan Islands suffer from a tribal feud between Christians and Muslims. In December, Wahid traveled to Aceh and promised to implement a wide-ranging autonomy package that would give the province a greater share of oil and gas revenue. But Aceh’s rebel leaders refused to meet the president. Continuing communal violence has scared off the foreign investors needed to jump start Indonesia’s economic recovery. Analysts say Wahid’s handling of Aceh could determine whether Indonesia splinters apart. The disintegration of Indonesia would create serious security problems for its Southeast Asian neighbors.

The other American concern in Southeast Asia is Burma’s stifled democracy. Armitage says that Clinton’s sanctions against the military government haven’t worked, but neither has the engagement strategy of the Association of Southeast Asian Nations. But the Bush advisor said he didn’t expect that there would be a dramatic change in U.S. policy toward Burma. "Aung Sang Suu Kyi was elected. She ought to have a right to govern."

Armitage blasted the Clinton administration for not coming to the rescue of Thailand, America’s second-oldest ally in the region, at the start of the 1997 Asian financial crisis: "That’s no way to treat an ally." Bush, Armitage said, wants to have "our allies with us when they are needed and to respect them if they aren’t needed." The advisor also lauded Singapore, the one major Asian country that Clinton never visited, for allowing U.S. naval carriers to make calls. "The gesture is unmistakable," he said.

The Bush team hasn’t said how it will respond to conflicting claims in the South China Sea, an area rich in natural resources and claimed in whole or in part by China, Taiwan, Vietnam, the Philippines, Malaysia, and Brunei. Nor has it commented on Cambodia, where the government and the United Nations have reached a tentative agreement to establish a tribunal with international participation to bring former Khmer Rouge leaders to justice for genocide during their rule in the late 1970s. Phnom Penh has been slow in submitting legislation to the National Assembly that would set up the tribunal.

Trade and Fear of a U.S. Economic Slowdown

Trade relations with Asia are a major concern both in the United States and across the Pacific. More than one third of U.S. global trade is with Asia. In trade in services, the United States is running a surplus of over $23 billion with Asia. And as China liberalizes its markets as a member of the WTO, U.S. trade opportunities should increase in Asia.

Bush and his advisors often said during the campaign that their administration would put trade at the center of America’s foreign policy agenda. Advisor Zoellick told a gathering of Asia watchers in September that the new president wouldn’t "talk free trade" and then abandon it like Clinton did after passage of the North American Free Trade Agreement. Zoellick said Bush wouldn’t pander to labor and environmentalists on labor and environmental standards, which the advisor believes derailed the 1999 trade talks in Seattle. He also said that one of the new president’s top priorities would be to request authority to negotiate new treaties and submit them to Congress for a vote of rejection or approval. Congress would not be able to amend these agreements.

In 1997, Clinton failed to get this authorization–known as "fast track" by trade specialists–because of conflict between the business community, which wanted more trade liberalization, and labor and environmental groups, which wanted labor and environmental standards included in trade treaties. For Bush to get fast track through Congress, he will need support from Democrats in the nearly evenly divided legislature. How they view the new president’s trade proposals will depend on his other, domestic agenda and the Democratic Party’s larger interests. Specifically, it will depend on whether the Democrats seek to block Bush’s initiatives out of revenge for his controversial election victory in Florida, or whether they are looking to regain control of Congress in the midterm elections of 2002.

On top of that, many Democrats agree with labor unions that free trade has cost the United States too many jobs. They insist that any new treaties mandate environmental and labor standards so that U.S. firms aren’t disadvantaged. These provisions are vigorously opposed by many American companies as well as by many foreign countries, including most of those in Asia. Still, trade experts believe that Bush will have a difficult time getting approval for any new trade agreements unless he cobbles together a compromise that addresses enough labor and environmental concerns to get support from moderate congressional Democrats.

Despite Bush’s emphasis on trade during the campaign, the president-elect during the transition process considered overhauling economic policymaking, prompting some of his advisors to recommend dropping the cabinet rank of the U.S. trade representative. Private trade analysts warned that this move risked taking clout away from the position in deliberations with other government departments in Washington, Congress, and foreign governments in Asia.

Bush will inherit a raft of unfinished trade business from the Clinton administration. For starters, the new president has to oversee China’s accession to the WTO and ensure that Beijing lives up to its commitments. Bush has to get congressional approval for a bilateral trade agreement signed last year with Vietnam, and complete negotiations on a bilateral trade agreement with Singapore. Washington and Tokyo also have to decide whether to renew their 1995 trade agreement on cars and parts. Bush advisors have sharply criticized the Clinton administration’s often prickly trade talks with Tokyo, convincing Japanese officials that negotiations will be less contentious under the new president.

Asians are also anxiously watching to see how much the U.S. economy slows down this year and what Bush will do to avoid a hard landing. The IMF predicts that the U.S. economy will grow only 3.2 percent in 2001, down from 5.2 percent last year. This slowdown could have wide-ranging impact across the Pacific. Worries are particularly strong in Japan, the world’s second-largest economy, for which the Unites States is its largest export market. Recent indicators suggest that Japan could be facing its fourth slowdown in less than a decade.

American demand for Asian goods helped pull the region out of its 1997-1998 crisis. Developing countries of Asia in 1999 exported $110 billion worth of technical equipment to the United States. Information-technology products accounted for over three quarters of the total exports from Singapore and Malaysia in 1999, and more than 50 percent of the exports from South Korea and Taiwan. A slowdown in the United States could also push down portfolio investing and reduce foreign direct investment in Asia. Warns Joseph Quinlan, a Morgan Stanley Dean Witter analyst: "Today, with a likely slowdown in IT capital spending in the works, Asia’s export-led recovery–not quite finished by all accounts–could be derailed." This possibility will prompt Asians more than ever to look over their shoulders at what’s happening in the United States.

Marshall M. Bouton
Executive Vice President
Asia Society
502 Park Avenue
New York, NY 10022
Tel: 212-288-6400
Fax: 212-517-8315
E-mail: mbouton@asiasoc.org

Nicholas Eberstadt
Wendt Chair in Political Economy
American Enterprise Institute
1150 17th Street, NW
Washington, DC 20036
Tel: 202-862-5825
Fax: 202-862-7163
E-mail: eberstadt@aei.org

Michael J. Green
Senior Fellow for Asian Security Studies
Council on Foreign Relations
1779 Massachusetts Avenue, NW
Washington, DC 20036
Tel: 202-518-3400
E-mail: mgreen@cfr.org

Murray Hiebert
Far Eastern Economic Review
1025 Connecticut Avenue, NW
Washington, DC 20036
Tel: 202-862-9286
Fax: 202-728-0624
E-mail: Murray.Hiebert@feer.com

Sidney Jones
Executive Director
Human Rights Watch-Asia Division
350 Fifth Avenue, 34th Floor
New York, NY 10118-3299
Tel: 212-216-1228
Fax: 212-736-1300
E-mail: joness@hrw.org

David M. Lampton
Director, China Studies at the Nixon Center
The Paul H. Nitze School of Advanced International Studies
1619 Massachusetts Avenue, NW
Washington, DC 20036-1984
Tel: 202-663-7739
Fax: 202-663-5891
E-mail: dmlampton@mail.jhuwash.jhu.edu

Robert A. Manning
Senior Fellow and Director of Asian Studies
Council on Foreign Relations
1779 Massachusetts Avenue, NW
Washington, DC 20036
Tel: 202-518-3401
Fax: 201-986-2984
E-mail: rmanning@cfr.org

Douglas H. Paal
President
Asia Pacific Policy Center
601 Thirteenth Street, NW
Suite 1100 North
Washington, DC 20036
Tel: 202-223-7258
Fax: 202-223-7280
E-mail:dpaal@attglobal.net

Nicholas Platt
President
Asia Society
502 Park Avenue
New York, NY 10022
Tel: 212-288-6400
Fax: 212-517-8315
E-mail: nplatt@asiasoc.org

S. Frederick Starr
Chairman, Central Asia Institute
Johns Hopkins University
The Paul H. Nitze School of Advanced International Studies
1740 Massachusetts Avenue, NW
Washington, DC 20036-1984
Tel: (202) 663-7720

Carlyle Thayer
Professor, Southeast Asia Security Studies
2058 Maluhia Road
Honolulu, HI 96815
Tel: 808-971-8952
Fax: 808-971-8949
E-mail: thayerc@apcss.org

Joel Wit
Guest Scholar
The Brookings Institution
1775 Massachusetts Avenue, NW
Washington, DC 20036
Tel: 202-797-6041
Fax: 202-797-6004
E-mail: jwit@brook.edu

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Cohen, Stephen, "India: Old Issues and New Opportunities," Brookings Review 18, no. 4

(Fall 2000): 30-33.

Lampton, David, Same Bed, Different Dreams: Managing U.S.-China Relations, 1989-2000. Berkeley: University of California Press, 2001.

Mann, James, About Face: A History of America’s Curious Relationship with China from Nixon to Clinton. New York: Knopf, 1999.

Noland, Marcus, Avoiding the Apocalypse: The Future of the Two Koreas. Washington, D.C.: Institute for International Economics, 2000.

Rice, Condoleeza, "Campaign 2000: Promoting the National Interest," Foreign Affairs 79, no. 1 (January/February 2000): 45-62.

Schwarz, Adam, A Nation in Waiting: Indonesia’s Search for Stability. 2d ed. Boulder, Colo.:Westview, 1999.

Shambaugh, David, "Facing Reality in China Policy," Foreign Affairs 80, no. 1

(January/February 2001).

"The United States and Japan: Advancing Toward a Mature Partnership." Washington, D.C.: Institute for National Strategic Studies, National Defense University, 2000.

Zoellick, Robert, "Campaign 2000. A Republican Foreign Policy," Foreign Affairs 79, no. 1 (January/February 2000): 63-78.

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