Tue, Nov 18, 2014 page8

• Trade as a confidence-building tool

  • By Volker Stanzel
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  The world debate may be preoccupied with “hot” crises in the Middle East, the Islamic State group, eastern Ukraine and fighting Ebola. Yet tensions in East Asia have not subsided. Even though the region has seen quite a remarkable level of peace since China’s war against Vietnam in 1978 and 1979, there is a new uncertainty.

  The major causes of past progress are the security guarantee provided by the US, coupled with China’s intent to “rise” peacefully. Another key stabilizing factor has been the gradual economic integration among the nations of Southeast Asia and of East Asia. Together, this has brought slow, but continuous, accommodation of one another’s political interests and objectives across Asia.

  If there is talk now of rising tensions in East Asia and a growing apprehension, then usually it is China which is seen as responsible. More precisely put, the tensions are seen as a consequence of China’s rise.

  As things stand, it appears that whenever a neighbor of China acts in a way that might be interpreted in Beijing as an even minor provocation, China will assert itself robustly and change the overall situation to its advantage.

  To give one example, when the Philippine navy tried in May last year to expel Chinese fishermen from the Scarborough Shoal (Huangyan Island, 黃岩島), 240km from the Philippine coast (and 885km from the Chinese coast), the Chinese navy intervened. Today, the reef is de facto in Chinese hands. Taiwan also claims it.

  It seems that the way in which China’s leaders regard the future role of their country in the region and the world has changed. Both the “peaceful rise” rhetoric and statements made just 10 years ago to express the intention that China’s rise would remain compatible with the interests of its partners seem to have made room for a new way of thinking.

  This issue loomed again large in the background of last week’s APEC summit. For all the official focus on economic cooperation, geopolitical and strategic issues always lurk large, even though they are not on the “official” agenda.

  While this is no surprise to Asians, what might surprise them is how much this is a matter also of global interest. The reason for that is twofold: First, looking ahead, Asia might eventually become the most important part of the global economy.

  Second, China already has intense economic relationships all over the globe, including in Europe and the US.

  That is why other nations outside of Asia are greatly concerned if China’s relationship with the rest of the continent remains unsettled.

  One key question to ask at this juncture is what the other nations in Asia can do to keep their relationship with China on a constructive footing and to do their part in securing the future prosperity of Asia.

  It is here that the European example and the importance of relying on trade relations as a key confidence-building measure might be of use. For real progress to be made, nations have to be able and willing to jump over the shadows of the past. That is no easy feat.

  However, strengthened trade relations have the advantage of incentivizing nations in that critical regard. They offer up meaningful progress in people’s daily lives through greater economic integration across the entire region.

  When progress toward freer global trade at the multilateral level moves at a glacial pace — at best — bilateral and regional trade deals assume a bigger importance. Despite general concerns that this might lead to a fracturing of the global trade landscape, certainly with regard to Asia such agreements — whether bilateral, trilateral or multilateral — could turn into true progress.

  Far beyond the “China factor” in Asia, quite a lot of nations across the region have quite a loaded history when it comes to some of their neighbors. Trade agreements can be a very useful lever to overcome such shadows of the past.

  One particularly inspiring example in this regard — and one that ought to give courage to other Asian nations with similarly fraught relationships to take similar steps — concerns the change in relations between South Korea and Vietnam.

  Fifty years ago, South Korean troops fought in Vietnam alongside the US, all in the name of checking the Iron Curtain. Some of those troops have been accused of committing wartime atrocities against Vietnamese civilians.

  In spite of that painful past, South Korea and Vietnam are now set to ink a free-trade agreement by year’s end. Constructive steps like that show the way forward for all of Asia.

  Volker Stanzel is a former German ambassador to Japan and China, and former political director of the German Foreign Office.
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