The Mood in Washington, DC Matched the Snow Covered Roads

Dear Colleagues,

The mood in Washington, DC this week was as dire as the condition of the still snow covered roads. As pundits tried to gauge whether the White House is about to pivot and turn toward a more centrist policy platform, members of Congress continued to decide not to run or give up their seats for other reasons. The big surprise this week was Indiana Democrat Senator Evan Bayh's announcement that he would retire. The word is that the President is unhappy having his initiatives such as health care and jobs stimulus bogged down in Congress and may be contemplating making some changes in his team.

These developments impact Southeast Asia because it seems clear that the White House has been trying to nail down the health care bill and other domestic big ticket items before turning fully to trade. The President is heading to Indonesia, Australia and Guam in March and will be back out in Asia for the US ASEAN Summit (likely in Hanoi), G-20 Summit in Korea and APEC Leaders Summit in Japan in November.

In Asia, the region got back to work after Year of the Tiger celebrations last week. Several ASEAN leaders including President Yudhuyono of Indonesia, Prime Minister Najib of Malaysia, President Arroyo of the Philippines, Prime Minister Lee of Singapore and Prime Minister Abhisit of Thailand are planning to visit Washington, DC in April for President Obama's Nuclear Security Summit. Prime Minister Rudd of Australia and Key of New Zealand are also attending. CSIS will be hosting many of the leaders while they are in the US. Stay tuned for details and updates.

G-2 Friction

The headlines of the week were dominated by continued US China friction as the President met the Dalai Lama in the Map Room of the White House. China, already expressing its dismay of the Administration's decision to go forward with a significant arms sales package to Taiwan, stepped it up a notch. See my colleague Charles Freeman's views on the President's meeting with the Dalai Lama and its implications http://csis.org/publication/president-obama-meet-dalai-lama .

CSIS' paper on China's Role in ASEAN and implications for US policy can be found here http://csis.org/testimony/chinas-activities-southeast-asia-and-implications-us-interests

ASEAN Secretary General Surin Pitsuwan

CSIS Southeast Asia and a small group of experts met privately with Dr. Surin while he was in Washington, DC last week to help inaugurate the new ASEAN Studies Center at American University. The off the record discussion focused on key pillars of US ASEAN engagement including trade and investment, security and political, socio-cultural ties and cooperation on transnational issues such as nuclear non-proliferation, climate change, humanitarian assistance and disaster relief, human trafficking and other issues. Dr. Surin shared ASEAN's views on regional architecture from both trade and security standpoints. He said that he is pleased to understand that US policy makers understand the "centrality of ASEAN".

The Week Ahead in the Region & at CSIS

Thailand is Tense. Looking at the week ahead, the headline stories include rising tension in Thailand as the February 26 date for a decision on the fate of former Prime Minister Thaksin's assets (over US$2 billion) will be decided in Thai courts. Rumors of protests and some violence are rife and there has been evidence in the build up to the decision.

CSIS will host US Ambassador to Thailand The Hon. Eric John for consultations in early March here in Washington, DC. The format for the meeting is likely to be a private discussion with CSIS members and experts, but interested parties should contact Mary Beth Whyel at mwhyel@csis.org.

Malaysian Politics & Relations with the US. While PM Najib and KL have decided it is time to warm relations with the US after years of diplomatic dissonance, domestic political pressure is making that process more difficult. Kuala Lumpur has decided that certain levels of support are in Malaysia's national interest and seems to be pursuing several areas such as exploring a new posture on export controls, possible support for NATO efforts in Afghanistan, taking steps to address trafficking in persons questions and indicating interest in the Trans Pacific Partnership.

However, the Anwar trial continues to be a major focus. The trial of former Deputy Prime Minister and Finance Minister is a low point for the country. Here is my commentary on the start of the trial http://csis.org/publication/low-note-malaysia-start-anwar-trial-today. Other recent developments are also controversial such as the high profile application of Islamic law to several women and the "Allah" ruling prohibiting non-Muslim religions from using the world "Allah" to refer to God.

In an effort to shed light on the current issues in Malaysia, CSIS will has invited a range of experts, politicians and experts to share their views, including members of the Government, the opposition including Datuk Seri Anwar and others.

This week, CSIS will host a seminar on Rule of Law and Governance in Malaysia this Wednesday, February 24 including The Hon. Nazri Abdul Aziz, Minister in the Prime Minister's Department and in charge of legislative affairs, The Hon. Abdul Gani Patail, Attorney General of Malaysia, and The Hon. Abdul Hamid Mohamed, Former Chief Justice of Malaysia & Chairman of the Malaysian Anti Corruption Commission. Interested parties should contact Mary Beth Whyel at SoutheastAsiaProgram@csis.org.

Indonesia Wrestles with Domestic Politics as President Obama Visit Nears. In Indonesia, President Yudhuyono and leaders of his team continue to fight allegations around the Bank Century case. Opposition politicians appear to be dug in and committed to targeting Vice President Boediono and Finance Minister Sri Mulyani Indrawati over allegations linked to the bank scandal. Meanwhile, US and Indonesia officials are exchanging visits to prepare for the trip.

CSIS Southeast Asia continues its work to provide insight and input on the Comprehensive Partnership that will be a focal point for President Obama's trip. We will meet with the His Excellency Gita Wirjawan this week to discuss the visit and key policy benchmarks.

In addition, US Pacific Command (PACOM) Commander Admiral Willard visited Jakarta for consultations about Indonesia's strategic needs for military modernization. Janes Defense predicts ASEAN defense budgets will increase 7-8 percent in 2010-2011. http://www.thejakartapost.com/news/2010/02/17/wither-ri-defense-strategic-partnership.html

Singapore Visit. Singapore's Deputy Prime Minister and Minister of Defence Admiral Teo Chee Hean will visit the US in March. CSIS will host the Minister for a private discussion with CSIS Experts, Board Member, officials and related experts on March 15.

Trade & the TPP

On trade, we are gearing up for the inaugural negotiations of the Trans Pacific Partnership to be held in Melbourne, Australia on March 15-19 just ahead of President Obama's visit. The President will be consulting with Prime Minister Kevin Rudd who may be facing a real challenge in the polls later this year. The Obama visit may give him a timely boost in national polls. Top American economists "strongly support" the US going forward with the Trans Pacific Partnership (TPP) trade negotiations. See the new paper from Fred Bergsten and IIE. http://www.iie.com/publications/papers/paper.cfm?ResearchID=1482.

Meanwhile, US Commerce Secretary Gary Locke announced National Export Initiative with goals to double American exports over the next five years and support two million US jobs. Part of the Obama Administration's push to convince Americans that trade is a key element of economic recovery and growth. He references targeting Asian... markets in the TPP countries and beyond. http://www.commerce.gov/NewsRoom/SecretarySpeeches/PROD01_008893

The Democratic Leadership Committee is developing thoughts on a trade policy for the US. "As the Obama administration works to pull the nation out of its economic crisis, trade policy should accordingly work to spur growth by promoting innovative new industries and clean technologies at home, and by supporting the globe's poorest citizens... and reconciliation with the Muslim world" http://www.dlc.org/ndol_ci.cfm?kaid=108&subid=900010&contentid=255039

Defense & Security

Pentagon's Quadrennial Defense Review. "In Southeast Asia, we are working to enhance our long-standing alliances with Thailand and the Philippines, deepen our partnership with Singapore, and develop new strategic relationships with Indonesia, Malaysia, and Vietnam, to address issues such as counterterrorism, counternarcotics, and support to humanitarian assistance operations in the region. The United States is also encouraging the continued development of multilateral institutions and other integrated approaches to regional security affairs."
http://www.defense.gov/QDR/QDR%20as%20of%2029JAN10%201600.pdf

US Australia Treaty of Defense Trade Cooperation. One key question for President Obama's Australia visit will be whether the Senate could ratify the long overdue Treaty on Defense Cooperation that was completed in 2007 and sent to the Hill for approval. The Treaty allows the US and Australia to share military equipment, services and personnel more easily. The agreement is being held up due to Senate staffers' concerns over export control regime issues. For details on the Treaty, please see this comprehensive Congressional Research Service report http://www.fas.org/sgp/crs/natsec/RS22772.pdf

Burma-Australia. The Australian military has decided to move to the next level with engagement in Burma. In doing so, it has raised questions in Australia regarding to engage or not to engage, and to what extent and with what objectives? Read in http://www.theaustralian.com.au/news/nation/war-games-with-burma-row/story-e6frg6nf-1225828964092

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Thank you for your interest in US policy in Southeast Asia and CSIS Southeast Asia. Join the conversation!

Ernie