Putting Asia on Sidelines Could Backfire

article top

WASHINGTON (UPI) — Opportunities for big profits are being lost in Asia as the Bush administration channels most of its external energy on dealing with Iraq and the Middle East, pushing other regions to the sidelines, according to some U.S. policymakers.

Understandably, fear of yet another terrorist strike on U.S. soil has continued to be of utmost concern to policymakers since Sept. 11, but while the politics of the Middle East and wariness of a surge in conservative Islam has dominated foreign policy, pushing Asia on the backburner, especially on trade issues, is a folly that could eventually backfire, said one Senator at a recent forum on Asian trade.


“This administration does not have any policy with Asia … on foreign policy, or trade policy,” said Max Baucus (D-MT). He pointed out that none of the “top folks” advising President George W. Bush had any expertise in Asian affairs, as they focused solely on European and Middle Eastern affairs.

From a strictly financial perspective, there are greater opportunities in Asia than there are in the Middle East or Europe, given the sheer size of the economies in the region. In the case of Japan, despite over a decade of little or no growth, the country remains the second-largest economy in the world, and roughly twice the size of Germany’s, which ranks in third. Meanwhile, China has easily become the single most important destination for foreign investment amongst U.S. businesses, as the potential for its vast market continues to allure investors across the board.

“The United States has vital interest in ensuring Asia’s prosperity,” said former U.S. trade representative Charlene Barshefsky, stressing the need for the United States to press for open markets globally, rather than simply trying to open up certain countries.

The problem is, however, that open trade worldwide cannot be taken for granted, even in countries that the United States has established solid relations over the decades. To be sure, gone are the days of the late 1980s when congressmen gathered on Capitol Hill, smashing up television sets and VCRs made in Japan as they protested against such companies as Sony and Toshiba dominating the U.S. market.

Such apparent friction no longer exists between the United States and Japan, but Baucus nonetheless stressed that Japanese markets were still highly regulated and as a result, U.S. companies were losing opportunities to making profits in the country. For example, the senator pointed out that Japan was trying to limit imports of U.S. beef based on fears of mad cow disease, even though no case of mad cow has been found in the United States, whilst there have been a number of outbreaks in Japan. Given the sheer size of the U.S. beef industry, it would seem obvious that the administration push for continued open meat markets in Japan, but that has apparently not been the case.

Meanwhile, the administration has failed to meet many of the World Trade Organization’s obligations in agriculture, and has too often been negligent on adhering to its promises to uphold intellectual property rights, particularly in software, the senator said.

That wasn’t always the case, however. In the early months of his presidency, George W. Bush made clear that Asia would be of considerable importance in his White House, particularly given his personal business background and the interest groups which supported him that sought the administration to stake out more economic opportunities in the region.

Since the terrorist strikes, however, rather that trying to push U.S. economic interests overseas in evidently lucrative markets, the Bush administration “has focused too much on smaller profits” in countries that have fewer business investment opportunities, the senator argued. He added that the government should not pursue trade policy with little economic value.

Moreover, he added that since the Sept. 11 attacks, the White House has been manipulating trade relations to punish or reward countries for political reasons.

“But trade is its own issue…and we need to get trade to take center stage … jobs are at stake,” Baucus said.

Certainly, accusations that the administration has rewarded its allies financially since the strikes nearly two years ago have been of concern to some analysts. Pakistan, for instance, was facing sanctions from the United States since 1998 for having resumed nuclear testing in competition with neighboring India. But as Pakistan became a key partner in fighting the Taliban in Afghanistan, not only has the United States lifted such economic restrictions, it has provided considerable financial aid to the Muslim nation as well.

Meanwhile, there was some concern earlier this year when the United States had simultaneously pursued bilateral free trade agreements with Singapore and Chile, but only Singapore was able to get approval quickly. Some argued that unlike Singapore, which quickly signed on as an ally against Iraq, Chile avoided being a member of the so-called coalition of the willing and was thus being punished.

Whether that had any bearing on the slight delay of the passage of the free trade agreement with Chile, it would seem that those countries that further U.S. foreign policy are rewarded economically.

As Baucus notes, the administration may stand to benefit from channeling more of its attention on trying to enhance trade relations with countries simply from an economic viewpoint, rather than a political one, as the United States continues to struggle with a shaky economy and an even shakier job market.

Copyright 2003 by United Press International. All rights reserved.