Excerpt from my article “Middle Power alignment in the Indo-Pacific: Securing agency through Neo-middle Power Diplomacy”

When examining the changing nature of middle power diplomacy in the Indo-Pacific that is occurring in backdrop of the deepening strategic completion between the US and China, it is useful to peer into three areas of burgeoning cooperation: 1) maritime security; 2) the digital economy; and 3) economic cooperation. These are not meant to be representative of the kind of cooperation that is occurring, rather they are meant to highlight the breath of cooperation.

Maritime security

China’s rejection of the July 2016 Permanent Court of Arbitration’s decision and its building and militarizing of islands in the South China Sea (SCS) has raised serious concern among middle powers (Dinh, 2016). They question the future of an international rules-based order when the rising state flagrantly disregards existing institutions and breaks tête-a-tête promises at the leadership level (JIIA, 2019).

Under the defacto-leadership of Japan, a rules-based maritime order is being promoted through the Free and Open Indo-Pacific (FOIP) Vision (MOFA, 2018). Focusing on a rules-based maritime order, middle powers are working to create a critical mass that will be appealing to stakeholders in the region. Part of that has been an evolution of FOIP to include two main pillars, a rules-based maritime order based on inclusivity and ASEAN centrality (Hosoya, 2019).

Initial momentum suggests that a version of FOIP is garnering buy-in from many middle powers. Importantly, the US’ Department of Defense Indo-Pacific Strategy Report (DOD, 2019) fortifies the middle power efforts. Notwithstanding, ASEAN states are reticent to securitize Indo-Pacific maritime cooperation. India is also cautious in “not committing themselves to any initiative that is construed as a distinct ‘anti-China’ posturing” (Palit and Sano, 2018).

Prime Minister Lee of Singapore exemplified this concern by stressing in his speech at the 2019 Shangri-La Dialogue, that ASEAN countries do not want to choose between the US and China when it comes to the Indo-Pacific’s maritime challenges (Prime Minister’s Office, 2019).

This sentiment was further echoed in The State of Southeast 2019 Asia Survey Report, which questions the “US’ reliability as a strategic partner and provider of regional security support the general trend of the region’s downcast view of the US” (Tang et al. 2019, p. 17) and has “the majority view that China will be a revisionist power” (Tang et al. 2019, p. 18). Both are stressing ASEAN states.

While maintaining open Sea Lanes of Communication remains paramount, middle powers apart from ASEAN states, have been buttressing rules-based behavior in other ways in the Indo-Pacific through monitoring and surveillance activities since 2018. A Japanese example is using aircraft based in Kadena Air Base against illicit maritime activities, including ship-to-ship transfers with North Korean-flagged vessels as prohibited by United Nations Security Council Resolution (MOFA, 2019b). Formulizing and expanding the number of middle power states involved in these types of activities may stem weapons proliferation in the Indo-Pacific region.

Getting ASEAN states, India and other middle powers such as Canada, South Korea and the United Kingdom to participate in maritime security cooperation and supporting a rules-based maritime order will require middle powers that are driving the Indo-Pacific vision such as Australia and Japan to continue to place ASEAN centrality and inclusivity as the center of their policies. The former refers to any FOIP-based maritime security and support for rules-based maritime order as being supporting of ASEAN as an institution, but also to stakeholders within ASEAN. This will necessarily require all activities to be not tangentially directed at China.

This kind of maritime security cooperation and support for the rules-based maritime order would also be acceptable to India who priorities cordial economic relations with China and shuns security related organizations such as the QUAD evolving towards a more substantive and elevated institution with secretarial representation.

With these conditionalities in mind, maritime security cooperation and support for the rules-based maritime order may still transpire, but it will likely develop into areas that are seen as regional public goods that may have dual purpose such as search and rescue activities, humanitarian assistance and disaster relief, and other areas that fall under the rubric of non-traditional security cooperation.

Digital economy

Current trends suggest that competition between the two great powers is leading towards a bifurcation of digital systems, a closed system led by China and an open system led by the US (Nagy, 2019a). The impact of this divergence of digital economies would require businesses to duplicate and then localize their business platforms for each digital economy (Eurasia Group, 2020). This would have the effect of increasing costs for businesses by shortening supply chains.

Thus, digital connectivity is another area where aligned middle powers are working synergistically to promote shared standards, rules and good governance. It is an example of normative middle power diplomacy in that it focuses on rule making. Working closely with Japan and other middle powers to realize the Free Trade and Data Free Flow with Trust (DFFT) (Kantei, 2019) will be crucial in keeping the global production network and existing supply chains intact.

Already middle powers are proactively working to avoid this bifurcation of technological systems. At one level, we see Japan proactively working with the US in the form of the US-Japan Policy Cooperation Dialogue on the Internet Economy. This discussion has resulted in the US-Japan Digital Trade Agreement which “establishing enforceable rules that will support digitally-enabled suppliers from every sector of their economies to innovate and prosper, and in setting standards for other economies to emulate (OUSTR, 2019).”

This agreement according to the Officer of the United States Trade Representative “parallels the United States-Mexico-Canada Agreement as the most comprehensive and high-standard trade agreement addressing digital trade barriers ever negotiated.” (OUSTR, 2019)

At a broader level, Japan and other middle powers such as Australia and Canada have joined the Comprehensive Progressive Transpacific Partnership (CPTPP/TPP 11) which further builds on the objective of creating a critical mass of states that share the same digital trade norms (as outlined in chapter 14 on Electronic commerce (e-commerce) in the TPP 11) (GoC, 2019). Middle powers have also engaged in digital cooperation with other middle powers.

For example, there is the Japan-India Digital Partnership (METI, 2018) and the Digital Economic Partnership Agreement (NZFAT, 2019) between New Zealand, Singapore and Chile. These bilateral and multilateral middle power digital arrangements both with and without the US are further buttress efforts led by the US for cooperation with middle power institutions such as the US-ASEAN Cyber Policy Dialogue, the US-ASEAN Connect: Digital Economy Series, and the US-ASEAN Smart City Partnership.

These partnerships are meant to be a comprehensive model of cooperation at the bilateral and trilateral level which is important in building the digital infrastructure and human capital for promoting a shared vision of the digital economy. This existing network of bilateral digital agreements between the US and middle powers and between middle powers themselves is evidence that a consensus between Indo-Pacific stakeholders is emerging in terms of norms on the digital economy.

Linking the digital agreements and then enlarging the stakeholders involved may create a critical mass of states with shared digital economy norms that can be utilized to either encourage China to adopt shared digital norms or at least negotiate shared digital norms with an existing group of states that share the same understandings and norms related to the digital economy.

Economic cooperation

Growing economic entanglement with China has led to many cases of economic coercion to change the behavior of states. The most recent cases of economic coercion by China include but are not exclusive to the nationalization of the Senkaku Islands in 2012 (Nagy 2013), the THAAD instalment in South Korea in 2017 (Juan 2017) and the arrest of Huawei executive Meng Wanzhou (Cardwell 2019).

In each case, China responded to decisions made in Tokyo, Seoul, and Ottawa respectively by deploying both formal and informal punitive economic measures to change the decisions taken in each capital (Heydarian 2020). The result of Chinese economic coercion included reduced tourists, increased inspections of each respective states’ businesses in China, a decrease in purchases of agricultural products (as well as other exports) with the associated negative economic consequences. As a response, middle powers are enmeshing themselves into multilateral trade agreements. This enables them to receive the benefits of free trade but also ensure that their respective trade portfolios are diverse enough to protect themselves against economic coercion by larger states.

The Comprehensive and Progressive Transpacific Partnership (CPTPP) serves middle powers well in this regard. Expanding the agreement to include South Korea, Thailand, and the post-Brexit UK would enhance middle powers ability to defend themselves against economic coercion, by Beijing or other powers including the US.

A serious case should be made to advocate for Taiwanese membership. Here, middle powers should make the case for Taiwan to be an associate member based on China’s own Belt Road Initiative’s (BRI) practice of having sub-state actors join the BRI without their national government joining. This is not a panacea for resisting coercive economic tactics. Notwithstanding, an expansion of CPTPP stakeholders could act as a middle power firewall against economic coercion, the weaponization of trade and tourism.

The Japan-European Union (EU) Economic Partnership also serves to partly insulate its participants from coercive economic tactics through the investment in multilateral trade (MOFA, 2019a). With its focus on trade in services, investment, e-commerce, rules that limit subsidies for state owned enterprises, protection of intellectual property rights, and regulatory cooperation, the Japan-EU Economic Partnership aids participating middle powers in insulating themselves from economic coercion through cooperation in the form of a high quality agreement.

Finally, Australia, Canada, the EU, Japan and South Korea now, to varying degrees, see themselves as casualties of US trade policy under President Trump and are actively seeking new strategies to buttress the multilateral trading system. Increasingly, this multilateralization of high-quality trade agreements is seen as a means to insulate middle powers from the America First trade policy (Terada, 2019).

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