<html><body>American Enterprise Institute November 4, 2005 [Unedited transcript from audio tapes] <TABLE cellSpacing=1 cellPadding=1 width="100%" border=0> <TBODY> <TR> <TD> <DIV class=BodyText>9:45a.m.</DIV></TD> <TD> <DIV class=BodyText>Registration</DIV></TD> <TD> <DIV class=BodyText> </DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD></TR> <TR> <TD> <DIV class=BodyText>10:00</DIV></TD> <TD> <DIV class=BodyText>Panelists:</DIV></TD> <TD> <DIV class=BodyText>Evelyn Goh, Institute of Defence and Strategic Studies, Nanyang</DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText>Technological University, Singapore</DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText>Sheldon W. Simon, Center for Asian Studies and Program in Southeast Asian Studies, Arizona State University</DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText>Claude E. Barfield, AEI</DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText>Moderator:</DIV></TD> <TD> <DIV class=BodyText>Roy D. Kamphause, NBR</DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD></TR> <TR> <TD> <DIV class=BodyText>11:30</DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText>Adjournment</DIV></TD></TR></TBODY></TABLE> Proceedings: MR. KAMPHAUSE:  As you make your seats, we will do our welcome.  We are pleased you are here.  I am Roy Kamphause with the National Bureau of Asian Research. My institution had the great pleasure to partner with Dr. Evelyn Goh's Institute of Defence and Security Studies in Singapore this past summer, in August, to do a conference that was entitled "Contending Perspectives, Southeast Asian and American Views of a Rise in China." Whereas the title implies some contention, in fact, it was one of the most collegial and congenial groups I have ever been a part of, and I think you will get a sense of that today as we hear from both Dr. Evelyn Goh and Dr. Shel Simon. A quick word of introduction of each and then after their comments, Claude Barfield here, of AEI, will then provide some comment, and then we hope to save a good 30 minutes or so for your questions and responses from our panelists. What we will do, just so you can begin to think ahead, is we will bundle the questions, I think, in groups of three or maybe four, so we will sort of see what the first question is in sequence, and then if you have got something related, it might make a lot of sense to choose that point to add on your question. When we get to that point, there will be some mikes, and we will ask you to identify yourself, and ask that your question be as brief as possible, so we can hear the panelists. So, with that, let me introduce Shel and Evelyn, and I think Shel will go first and then Evelyn.  Dr. Shel Simon is Professor of Political Science and Faculty Associate of the Center for Asian Studies and Programs in Southeast Asian Studies at Arizona State University.  He is a long-time friend and colleague of the National Bureau of Asian Research, and we are glad he could be here today. I mentioned Dr. Evelyn Goh is affiliated with the Institute of Defence and Strategic Studies at Nanyang Technological University in Singapore where she is an Assistant Professor, and I think you are going to be thrilled to hear her perspectives, as well, on these related issues. Of course, those who have been part of this ongoing series that AEI and NDU, INSS have been running this past year know Claude Barfield, who is a resident scholar and Director of Science and Technology Policy Studies here at AEI. Again, we at NBR and IDSS are very pleased to join this ongoing effort for this session with what AEI and NDU have been a part of this year. What that, we will turn to Shel for his comments. DR. SIMON:  Thanks very much, Roy, and good morning, everyone.  I want to thank AEI and NDU for the invitation to be with you. I would like to spend my time looking at two important regional security organizations in Asia, particularly Southeast Asia, ASEAN, and the ASEAN Regional Forum, and I would characterize my talk as that of a friendly skeptic, one who wishes them well, but is not quite sure that they are able to meet the task. Until the Asian financial crisis of 1997-1998, the Association of Southeast Asian Nations (ASEAN), consisting currently of 10 of the 11 regional states, was generally considered the most successful multinational political organization among developing countries in the world. ASEAN's international reputation was burnished in the 1980s by its ability to keep the UN focused on the necessity of repelling Vietnam's invasion and occupation of Cambodia. Hanoi's subsequent withdrawal, although achieved because of a change in geopolitics, that is, a Russia-China rapprochement, was seen as a major ASEAN victory.  ASEAN also arranged annual meetings between the association and the great powers, the United States, China, Japan, and the European Union, to discuss an agenda of political, economic, and security issues generated primarily by the Southeast Asian states. This was a remarkable record of Southeast Asian states playing well above their collective weights in global politics.  It apparently came to an end in the late 1990s because of a series of regional challenges to which ASEAN has been unable to respond effectively. These include the region's financial crisis, the Indonesian-generated forest fire haze that periodically blankets Singapore, Malaysia, and the southern Philippines, the upheaval in elections in East Timor leading to the latter's independence, and the 1997 Cambodian coup which overturned the results of a UN-sponsored and ASEAN-endorsed election. All of these created what the late Michael Leafer [ph] called "a clear failure of regional cooperation," and led to a crisis of regional identity incredibility within ASEAN. Nor has ASEAN been of help in resolving persistent sub-regional tensions including the Thai-Burmese confrontation over the latter's drug trafficking and allegations by Rangoon that Thailand provide sanctuary for Burma's Karen minority fighting to create a separate homeland. Thai concerns about the support from northern Malaysia to separatists in southern Thailand, some of whom seek to unite with their Malay brethren across the Malaysian border, discord between Kuala Lumpur and Djakarta, over hundreds of thousands of illegal Indonesian workers seeking jobs in Malaysia, and a similar problem with illegal Philippine laborers in Sabah. Finally, the ongoing saga over the future of the Spratly Islands where China, Taiwan, Vietnam, Malaysia, and the Philippines, and Brunei contest ownership and sometimes seized each other's fishing boats for alleged maritime territory violations. The 2005 exploration agreement around the Spratlys, among Vietnam, the Philippines, and China was achieved--and I want to emphasize this--outside the ASEAN framework. The primary reason for ASEAN's inability to deal effectively with these issues is its normative attachment to the principle of non-interference. If regionalism is to be more than a process of multilateral policy coordination and intersubjective and competing stakeholder interests, then, a sense of collective intersubjective identity is required. ASEAN has not achieved that sense, while both Indonesia and the Philippines are currently urging more institutionalization through the creation of an ASEAN security community, an ASEAN economic community, and a ASEAN sociocultural community. Paradoxically, the terrorist challenge that currently exists in Southeast Asia could provide ASEAN with an opportunity to restore cohesion and create a new security agenda comparable to Vietnam's occupation of Cambodia in the 1980s. Of course, the nature of the threat is different. Instead of a heavily armed state, today, the threat is from individuals or relatively small groups, operating transnationally that endanger an entire region, requiring governments to cooperate on a priority basis if the threat is to be suppressed. Whether ASEAN is up to this challenge remains to be seen.  Clearly, the non-interference norm must be revisited, for the terrorist challenge necessitates regional collaboration in suppressing domestic terrorist cells that operate transnationally. Question:  Has ASEAN's expansion led to the Peter Principle?  If the five original members of ASEAN collaborating since the association's inception in the mid-1960s remain suspicious in each other, and wary of multilateral collaboration, how has expansion to 10 Southeast Asian states affected the organization's cohesion? Unsurprisingly, in a negative direction.  In economic affairs, there is now a two-tier system whereby progress toward an ASEAN-free trade area among the advanced economies possesses one set of deadlines that presumably have already been reached, and an indefinite delay for the most recent members of the association - Vietnam, Laos, Cambodia, and Burma.  2010 is the current target date, but in all probability, that will be extended. With respect to security, when law enforcement investigations revealed that terrorists moved readily among several ASEAN states because of visa-free travel, porous borders, and corrupt immigration officials, ASEAN, nonetheless, has done little to remedy the situation. For example, there still is no ASEAN-wide extradition treaty.  The peaceful settlement of international disputes is a core ASEAN norm, however, ASEAN expansion imposes new security burdens arising from unsettled maritime boundaries, overlapping maritime-exclusive economic zones. Thai-Vietnamese, Vietnamese-Cambodian, and Thai-Burmese territorial disputes challenge the ASEAN nonuse of force norm embodied in the 1976 Treaty of Amity and Cooperation. For example, Thai and Burmese forces clashed sporadically over ethnic minority insurgents along their common border, as well as Burma-based drug trafficking, and this year, there were even brief naval clashes between Malaysia and Indonesia over maritime boundaries. Equally problematic is the viability of the nonuse of force norm.  While no ASEAN member contemplates outright war with its neighbors, nevertheless, regional arms buildups are actually conducted with an eye toward maintaining a balance with ASEAN partners. Intra-military cooperation among the ASEAN states, while it occurs, is at best tentative.  Even Malaysia's and Indonesia's suggestion for establishing an ASEAN peacekeeping force, based on the experience of several ASEAN states armed forces in Cambodia, East Timor, and the Balkans, were shelved, partly because it might be seen as an attempt to turn ASEAN into a military alliance and partly because it would be impolitic to insert such a force into an intra-ASEAN conflict. Practical considerations also stymie ASEAN military cooperation since weapon systems are purchased from so many different national suppliers that interoperability would be problematic. There are some interesting hopeful signs, however. ASEAN state peace monitors are now in the southern Philippines, they were active in East Timor, and they are also deployed in Orcha. An important ASEAN principle with respect to the war on terror is that no member will provide sanctuary or support to groups bent on undermining the government of an ASEAN state. While no ASEAN government support subversion against a neighbor, there are cases of sanctuary in locations which governments have been unwilling, or more probably unable, to suppress. Muslim Thai separatists, for example, flee to northern Malaysia.  Large numbers of Karen are located inside the Thai northern border.  Philippine Moros are found in Malaysian Borneo, and Jamaat Islamia cells, which target several ASEAN states, are well entrenched in parts of Indonesia despite Djakarta's efforts at disruption. Moreover, Jamaat Islamia recruits continue to train in camps allegedly run by rogue elements of the Moro Islamic Liberation Front in the southern Philippines. In the few remaining minutes I have left, let me turn to the ASEAN Regional Forum.  My question for the ASEAN Regional Forum is:  Is the tail wagging the dog? Just as ASEAN faces security problems, the challenge non-intervention and sovereignty norms, the ASEAN Regional Forum now confronts regionwide issues that make consensus difficult to achieve. The ARF emerged from ASEAN in the mid-1990s.  The end of the cold war left the Asia-Pacific searching for a new organizing principle for security. While traditional alliances remain, including bilateral treaties with the United States and the five power defense arrangement among UK, Australia, New Zealand, Malaysia, and Singapore, these seemed inadequate to deal with nontraditional security matters, such as transnational crime, environmental hazards, illegal population movements. Moreover, traditional security issues persisted in the form of the kind of disputes among the countries that I mentioned earlier, as well as nuclear weapons proliferation and conflicting maritime jurisdictions. Some kind of cooperative security enterprise linking the region to its major partners in Northeast Asia and North America was needed to fill the gap.  Through the Treaty of Amity and Cooperation, initially broached in 1976, ASEAN members had already pledged among themselves to resolve intra-ASEAN disputes peacefully. Underlying this vision of a larger security order was the hope that the treaty's peaceful resolution commitment could be extended to other states.  This practice would constitute a kind of minimal diffuse reciprocity.  That is, while ASEAN would not expect outsiders automatically to come to members' aids in times of crisis, at the very least, outsiders could be asked to renounce the use of force in settling any conflicts they might have with association members. The unstated object of these concerns, of course, is China, this only "extraregional state," quote, unquote, with territorial claims in Southeast Asia, maritime claims. This is essentially a realist vision of the ARF.  If successful, it would encourage the PRC to explain and clarify its security policy in planning. China's neighbors, through the ARF, could then respond with their concerns about the PRC's policy in hopes of modifying it and thus enhancing regional stability. In 2003 and through 2004, China, Japan, and India all acceded to the Treaty of Amity and Cooperation.  In 2005, so did Australia and New Zealand.  The only great power at this point that has not acceded to the Treaty of Amity and Cooperation is the country in which we are all currently sitting. In sum, the ARF would be a transparency and reassurance mechanism for the Asia-Pacific, providing the whole region with opportunities for ASEAN style dialogue. The association also desired to create a body that would acknowledge ASEAN's institutional status as primus inter pares. The ARF achieved this goal by ensuring that ASEAN states would be the venue for the ARF's annual meetings, that ASEAN would dominate the agenda, that intercession study groups, each composed of two states, would always include an ASEAN member, and that the ASEAN consensus principle would prevail in ARF decisions. By its second meeting, the ARF also agreed on a three-stage progression for comprehensive security for Asia, which would move from confidence-building where the current focus is, to preventive diplomacy where some efforts have been made and finally, on to the development of mechanisms for conflict resolution, although because of China's objection to the term "conflict resolution," that third stage was modified to be called "elaboration of approaches to conflict."  What's in a word, so to speak. The ARF has conducted extensive security dialogues over the past several years.  They encompass a range of topics from human rights in Burma, problems on the Korean Peninsula, the South China Sea Islands, WMD proliferation, and the implications of ballistic missile defense deployments. The Forum has called for support for the Nuclear Nonproliferation Treaty, for the ratification of a comprehensive test ban.  It also addresses nontraditional security issues - piracy, illegal migration, narcotics trafficking, small arms trafficking. These discussions have led to some practical results.  For example, there are now annual defense policy statements and increased publication of defense white papers which contribute to transparency.  There are military exchanges going on among ARF members at the staff college level. There is a growing involvement and participation of defense officials in ARF deliberations, and there is also the creation of an ARF register of experts and eminent persons who can be called upon by ARF members in conflict situations. Let me conclude by looking at China with respect to these issues, because I know your concern in this series of seminars deals with China. ASEAN's original formation and its most recent 1990's expansion were designed to balance China's growing political and economic capabilities.  Rather than confront the PRC, however, the Southeast Asian states have chosen the neoliberal path of institutional engagement, making China a dialogue partner for ASEAN and involving Beijing in the ARF and the new ASEAN + 3, the + 3 being China, Japan, and the ROK. Whether these regional webs have socialized China into a long-term cooperative relationship with Southeast Asia, or are merely instruments used by the PRC to pursue its independent interests in the region remains to be seen. Of course, the two explanations are not incompatible. China is also increasing its security ties with Southeast Asia, holding individual discussions with each ASEAN member, the ASEAN + 3 is increasingly dominated by China, and in many ways it has replaced APEC in importance for Southeast Asia. Malaysia's Mahathir, the former prime minister, has particularly promoted ASEAN + 3, which benefits China, but leaves the United States on the sidelines.  China has invited the ASEAN states, beginning in November 2004, to its annual security conference in Beijing, while eschewing attendance at the annual Singapore Shangri-La Dialogue, because that dialogue, according to the PRC, is dominated by the United States. Beijing has asked Indonesia to chair the Beijing-based security forum, playing to Djakarta's hopes of reasserting a leadership role in Southeast Asia. China has made other conciliatory gestures to ASEAN in recent years.  I mentioned the signing of the Treaty of Amity and Cooperation.  It has also been the only non-ASEAN state to offer to sign ASEAN's Southeast Asia's Nuclear Weapons Free Zone Treaty, an offer that so far the Southeast Asian states have politely declined with a certain embarrassment, quite frankly. Okay.  Where does this end up?  Essentially, the ASEAN states are representative of a structural predicament of lesser powers in a system dominated by larger ones. The predicament they attempt to avoid is dependence leading to a loss of autonomy.  In the post-cold war ASEAN members questioned the stability and longevity of a U.S. commitment to Southeast Asian security.  This necessitated an ASEAN decision to engage China on their own. ASEAN has chosen to draw China into the processes and norms of regional security discussions, dominated by ASEAN rules, that is, the ASEAN ministerial conferences and the ARF. The hope was that multilateral engagement would create a constraining web of interdependence.  The goal of this complex engagement with China is to socialize China into a culture of restraint vis-a-vis its activities in Southeast Asia. There have been some positive outcomes.  China has abandoned its previous insistence on bilateral discussions exclusively on its claims in the South China Sea.  The PRC has agreed to general rules of conduct in maritime Southeast Asia, although I hasten to add that there is still no code of conduct per se, something that is frequently misinterpreted in the press. China has offered to sign on, as I said, to the Southeast Asia Nuclear Weapons Free Zone Treaty, and China has negotiated an ASEAN free trade area that began in 2002. For ASEAN, the underlying understanding is that China is already a great power.  Southeast Asian states want to shape the kind of power it will be. Nevertheless, my view is that U.S. hard and soft power in Asia will continue to exceed China's efforts for some time, and if the U.S. gives greater attention to regional multilateral organizations, as currently seems to be its plan, the U.S. image, which has been tarnished, quite frankly, since the invasion of Iraq, can still be polished as time goes on, and I will stop there. MR. KAMPHAUSE:  Thank you, Shel.  We will turn immediately to Dr. Evelyn Goh. DR. GOH:  Shel is always such a hard act to follow, I think I should have gone first. My task really was to give a much more explicit Southeast Asian view of more or less the same themes as Shel has addressed so far, so my presentation is made with two key aims in mind, I think. The first really is to share with you the findings from two projects that have been conducted earlier this year, one of which was to systematically compare intra-Southeast Asian views of the U.S. and China, and the second was this project that was jointly undertaken by IDSS and NBR comparing Southeast Asian and American views of the rise of China. Here, I think I will focus specifically on discussing the similarities, differences, and some of the unresolved questions in Southeast Asian views of, and approaches to, China.  That is the first part of the presentation. The second aim of the presentation is to present some brief observations about the nature of, and the challenges inherent in, the development of Asian regionalism in the context of China's rise. So, the second part of the presentation will speak very much to what Shel has just talked about.  I would like to end by suggesting the key issues that U.S. policymakers ought to bear in mind while considering their responses to this process of regionalization. Let's take first Southeast Asian perceptions and reactions to a rising China.  The first point to note, of course, is there is a great deal of similarity amongst the views of these 10 nations.  I can think of 6. First of all, none of these Southeast Asian countries identifies China as a threat.  They prefer to discuss the challenges that a rising China poses. They all ascribe to a strategy of vigorous engagement and attempted socialization of China, and they uniformly see China as an engine for economic growth in the region even though they differ slightly on how much individual opportunities they expect to gain from Chinese development. Secondly, Southeast Asian policymakers commonly emphasize that Southeast Asia has no choice but to engage with China.  This is Shel's point about dependency and about small states operating in a system dominated by large powers. Vis-a-vis China, though, for Southeast Asia, it is a question of geography and of history.  China is seen very much as an intrinsic part of the region, in a way that the U.S. isn't regarded, and as a true regional power in this part of the world. As a result, all these countries unhesitatingly claim a rise in Chinese influence in the region, now mainly in terms of trade, but also in the realm of regional political institutions, particularly as you have heard Shel discuss, they all agree that Beijing's record in the ASEAN Regional Forum, in the ASEAN + 3 process, and other sino-ASEAN institutions has been encouraging and improving over the last decade. The third similarity, Southeast Asian countries, though, still appear to reserve judgment on whether China is ultimately a benign or threatening rising power.  Almost every country has reservations and concerns about territorial disputes in the South China Sea and about potential conflict in the Taiwan Straits. So, while China's impressive diplomatic and economic engagement in this part of the world in recent years is readily acknowledged, it is really less clear whether Southeast Asian countries really buy this diplomatic success. To some extent I think this is a conceptual problem.  The success or failure of engagement strategies really cannot be determined until they are fortified, in other words, we can't tell whether an engagement is successful, you know, unless it fails basically. The fourth similarity is that all South Asian countries acknowledge the critical role played by the United States in regional security--this is not contestable--both in terms of security guarantees and in terms of economic ties, and importantly, all Southeast Asian countries want the United States to continue providing a security umbrella in this part of the world, although they differ on the specific arrangements that should go into this. Fifthly, policymakers in this region nearly all worry about the Bush Administration's policies and its foreign policy stance after 9/11 and after the Iraq war, and they all hope that Washington will adopt a more considered partnership approach to this part of the world, encompassing greater consultation, a greater sensitivity to domestic political constraints faced particularly by majority Muslim countries. As a result then, finally, of both reservations about long-term Chinese intentions and short-term reservations about current U.S. foreign policy, what we see is a common strategy of hedging in Southeast Asia. Hedging simply refers to taking action to insure against undesirable outcomes by neither choosing the U.S., nor the Chinese side, and by pursuing options to develop relationships, close relationships with both sides. So, we find Southeast Asia cultivating a middle position between the U.S. and China. Within this general hedging approach, and here we come to differences amongst Southeast Asian countries, we see some significant variations in policies towards China and towards the U.S. I think in Southeast Asia, amongst the 10 countries, we can identify three groups broadly.  The first, the group of countries that engage with China, but fundamentally, place much greater emphasis and confidence in the U.S. security relationship for the long term, two countries in the category, Singapore and the Philippines. A second group is a group that is pursuing a much more conscious middle line between these two countries, Malaysia and Indonesia, second group, countries which engage with China, but fundamentally, have serious concerns about pursuing closer relations with the U.S. particularly in the current climate. The third group is one which is much more constrained by China in its policymaking processes, and this is the group of countries on continental Southeast Asia, Thailand and the Indochinese states.  For these countries, of course, proximately to China, there is a serious concern and historical relationships and lack of options vis-a-vis the U.S., for countries like Vietnam also means that China looms larger in the strategic landscape. Now, these three subgroups suggest that there is potential for differences in Southeast Asian countries' perceptions of these two major powers, and taken as a whole, we see generally what Robert Ross has a long time ago identified as a continental versus maritime divide in Southeast Asia, again, a divide that is very clear in U.S. policy towards the region, which traditionally has been much more focused on the maritime section of Southeast Asia. Having said all that, I think the problems with looking at Southeast Asia vis-a-vis China and the U.S. today lies in a series of unresolved questions, which cloud scholarly and other analysis of the question. I think the two projects that we pursued this year highlight some of these interesting dilemmas which continue to be worked out in the region. First of all, of course, at the conceptual level, it is quite clear that the picture is gray, shades of gray, not black or white.  These countries are neither obviously balancing against, nor are they bandwagoning with either China nor the U.S.  They are hedging. Hedging doesn't mean you don't lean, it simply means you don't lean too much, so you have a series of countries leaning towards one side, but still pursuing options with the other side.  It is important to know that some countries hedge because they have to, because they have limited options vis-a-vis the other side, Vietnam, for example. Some countries hedge because they can, Thailand and Singapore, which diplomatically, economically, politically feel they have options they can pursue with both sides, which maximizes their perceived autonomy when it comes to great power relationships. At the same time, though, there is often the charge that there is a lack of strategic thinking in Southeast Asia, and while I wouldn't go that far, I think there is certainly a lack of strategic thought about the end game in this process. While most regional policymakers will tell you that they prefer good sino-American relations and cooperation, they have no idea how these two great powers are supposed to coexist in this part of the world, is it going to be some kind of a concert or will it be spheres of influence, or is it going to be some kind of cold war part two balancing.  No one has actually thought about this. A good indication of this conceptual lacuna, if you like, is the loose and, you know, much abused use of terms like balancing, balance of power in this part of the world. The U.S. is conceived of as balancing China in a range of ways, you know, from acting as the last resort deterrence to acting as a first resort counterweight to, you know, from using its military presence to providing alternative economic markets as an alternative investment source, and at the same time, China is also suggested now as a potential balancer against U.S. influence in the region. So, a loose use of terms, and not very clear ideas of how and what the end game is. I think there is elastic use of terms when you look at the discourse to do Southeast Asian relations with great powers has to do with a disconnect between power and influence in this part of the world.  It is very fashionable now, when you talk to Southeast Asian policymakers, you know, to hear the term "balance of influence." Southeast Asia is a region that has traditionally held very comprehensive notions of security.  It is not just about, you know, being military, being counting.  It is as much about prostitution, drug trafficking, how you control nontraditional kinds of security, internal strife, et cetera, et cetera. But in the recent discourse about rising China, notions about actual and potential power get confused, and they are conflicted without qualification, and discussion of Chinese power sometimes treats strategic power and diplomatic influence as fungible. That is a mistake, of course.  It is one thing to say that China has rising diplomatic influence in the region and quite another to talk about what kinds of security it can concretely provide in the region.  They can't, so where does that leave us? So, while the overall preponderance of U.S. power is clear to all Southeast Asian countries, the task of measuring relative Chinese influence in the region is a much more difficult one, and this is something that we have not begun to do, which means that basically, anyone talking about rising Chinese power translated into influence in this part of the world has to be incredibly careful. On the second part of the presentation, some observations about Asian regionalism.  Since the early 1990s, I think ASEAN countries have particularly stressed the importance, as Shel has discussed, of incorporating China within regional institutions as a means of engaging with and socializing it. After 1995, with one key consequence of Beijing's conscious reformulation of its peaceful rise and peaceful development strategy has been the intensification of efforts at building East Asian regional institutions.  It became a two-way process from the 1990s onwards, and there has been an absolute proliferation in regional institutions. You know, some people say, you know, East Asia or Southeast Asia lacks institutions.  Well, on paper, that is not true. In the economic realm, we have APEC, the ASEAN + 3, the Chinese initiative of the Borow [ph] Forum, the ASEAN cooperation dialogue, which is a Thai initiative, which extends to the Middle East, in the political and security realm. There are the ASEAN-plus mechanisms, the ARF, the new East Asian Summit that is coming up, as well as the Shangri-La Dialogue and the six party talk specific to the Karen Peninsula. Some of these institutions have more recently had their raison d'etre expanded, APEC taking on the security dimension, for instance.  The fate of others are less certain, the ARF seems to have run into a bit of a pot hole, and new ones have been set up. So, the regional institutional landscape, I think is very much in flux.  To say that there are no institutions is very much misleading, I think. In general, there are four key challenges to the development of credible regional institutions in East Asia. Just briefly, first of all, these key institutions will have to deal with the key trouble spots in the region - the Karen Peninsula, Taiwan Straits, South China Sea, and so far none of these institutions actually deal with these issues. Secondly, certain institutions have to be able to mediate the inevitable suspicions that it is either a way of constraining Chinese expansion or a way to counter American hegemony. Thirdly, certain institutions must address some pressing longer term issues.  There must be a way to incorporate regional economic security and human security issues which fundamentally underpin the hard-core security issues and high political issues. Finally, there seems to be a very great need for the Asia-Pacific region or East Asia to evolve its own modes of hardening institution development.  There is often the charge that institutions in East Asia, talks don't lead to concrete agreements, there are no sort of conflict prevention measures, and so on, and so forth. Well, what needs to be done need not necessarily be based upon European or American models, but there are certain basic requirements that must be met including formalizing rules of conduct, forging transparency and accountability, creating coordinating bodies that can also monitor implementation of agreements.  All these things are lacking in existing regional institutions. Whether and how ASEAN countries can build on existing institutions is a very, very difficult question. The desire certainly exists although in different measures across the different countries, and China encouragingly is lending its support, drive, and resources to developing some of these institutions selectively. Within Southeast Asia, one problem is that a concerned prospectus of key ASEAN countries differ regarding which institutions they want to build and how.  The three-way divide that I talked about in the first part of the presentation is reflected in the regionalism debate. Countries more predisposed to Chinese leadership in the region are more likely to support Chinese preferences for the ASEAN + 3 and other exclusively East Asian processes. On the other hand, you have countries like Philippines and Singapore, key U.S. allies which are standing very firm at the moment, you know, to preserve open regionalism in this part of the world, what basically means not excluding the U.S. from regional institutions. They are often also joined by Indonesia, which has its own concerns about preserving its preeminent position in the Southeast Asian sub-region. There is also a measure of intra-ASEAN competitiveness when it comes to initiating and leading institutions, regional institutions.  One good example is Thailand under the partnership of [inaudible] Sunatra [ph], who has on his own initiative proliferated a number of trans-regional institutions in order to establish his and Thailand's regional leadership credentials. Chinese initiatives in regional institutions has thus far I think been characterized by a mixture of responding to shaping and directing regional initiatives. It has turned its comfort with the ASEAN way of doing things into very successful influence within the ASEAN context where it has initiated reams of bilateral and multilateral cooperative agreements on the economic, diplomatic, and cultural fronts. Most obviously, of course, is its recent signing of the TAC, the Treaty of Amity and Cooperation.  Beijing has also been much more forward about making clear its preferences for the ASEAN + 3 as the preeminent regional institutions, quite unabashedly promoting the idea that that ought to be an Asian-only kind of premier institution in the region. Of course, it remains to be seen how China will act in the new East Asian Summit, but if the debate and discussions in the run-up to the first summit are anything to go by, my reading is that they can in the next few years quite comfortably sit back and simply let the ASEAN states bicker amongst themselves without having very much to drive the initiative on its own simply because ASEAN cannot agree on these things anyway. On the military front, interestingly, Beijing has been pushing over the past two years quite hard for a meeting of defense ministers between China and ASEAN obviously as a direct competitor to the Shangri-La Dialogue process. So far this has been opposed particularly by Singapore and the Philippines. Finally, given that East Asian regionalism remains very much a work-in-progress and very much dogged by numerous challenges, it is probably tempting for an American audience to conclude that this prospect of slow and difficult regional integration matters very little for the United States. Certainly, it would seem that the U.S. has little to fear from a process that turns out very few concrete results apart from talk.  I would argue, however, that this may precisely be a critical time for the U.S. to reshape its involvement and its role in East Asia. East Asian countries are familiar with U.S. power and preponderance and by and large to have found U.S. preeminence to be beneficial from a very pragmatic point of view.  However, U.S. has tended to deal with this region using bilateral means and by pursuing almost patron-client relationships with key states in this region. As a result, therefore, the U.S., even though it is perceived as benign, it is perceived much more as a super power or benign hegemon than as a leader or as a partner in the region. So far this hasn't really been a problem, right? We have all pretty much got what we wanted.  But I think with the rise with China, and that very obvious contrast there is in style, this may be a time to reassess just as the option matrix for countries in the region is being changed. China, in its successful diplomacy in this part of the world over the last decade, has tried to cultivate relationships and influence rather than pursuing power and leverage over the smaller states in the region, a difference in style, perhaps not with as much substantive delivery thus far, but still a very clear difference in style. So, while it is undeniable that the U.S. remains substantively much more important in this part of the world, and Bob Sarta [ph] makes this argument convincingly, both for its security relationships and for its economic role in the region. The perception that it seeks dominance and acquiescence rather than partnership based on mutual interests is likely to influence regional policymakers' calculations of future scenarios. China is preparing the soft power ground while its hard power is still circumscribed.  By doing so, I think it is quite successfully co-opting an incoming generation of Southeast Asian policymakers and business people, and this prepares the ground, I think, for the next 10 to 20 years, and how the next coming generation of leaders in this part of the world will view China. What can the U.S. do?  I think rethinking U.S. strategy in East Asia will probably not involve considering how the U.S. can compete directly with Asian institution building.  Institution building has been a very important part of U.S. global policy since the end of the Second World War.  That is undeniable, but in this part of the world, in East Asia, institution building has never been the American way. I think probably the best thing to do would be for the U.S. to draw on its strengths.  It has been critical in forming and shaping some of the key global economic institutions particularly, which have a huge impact on this part of the world, and for it now to continue to work to draw newly emerging economies in this region into complying with international rules and norms, and to help them develop would be a very key task for the U.S. In doing so, the U.S. will continue to provide the critical common security goods that are crucial to this part of the world.  At the same time, of course, it would work on strengthening key bilateral relationships. Bilateralism has been, you know, the standard way of U.S. approach to this part of the world, but in doing that, I would caution that the U.S. should look, not just at its traditional friends, Singapore, the Philippines, but to look increasingly at the new front-line states in various security challenges. Here, I think Thailand and Indonesia are absolutely crucial, and those two relationships must be strengthened. Importantly, Washington should find ways to develop relationships, not just to develop relationships, but to coordinate and to talk about Southeast Asia and American approaches to China. Southeast Asia has very different sets of concerns and constraints vis-a-vis China than the U.S. does, and there is a need to talk about this, if not coordinate ways of meeting the Chinese challenge. From a Southeast Asian point of view, then, to sum up, it is very unlikely that the U.S. will be alienated from this region, mainly because Southeast Asia does not want that, and mainly because the United States itself sees a large measure of interest in the region. However, I think the most pertinent question is not whether or not the U.S. will be excluded.  The most pertinent question is about the quality of relationships that Washington can seek to maintain in this region, and about the quality, the efficacy, and the relative costs of the returns of its policies in this part of the world. If you are interested in relative costs, then, the question of style must be addressed. Thank you. MR. KAMPHAUSE:  Thank you, Evelyn. Now, Claude will provide some comments and perspectives, and then we will get into our questions. MR. BARFIELD:  As those of you who come to these meetings know, I spoke actually at the last one when we were talking more about the economic institutions, so I was kind of thrown in here at the last minute.  I was traveling and my name was put on the program while I was traveling. But this has been fascinating for me, and this is going to be disjointed, but particularly the last speaker really jogged me in some reactions. Let me first, though, before I get to the points I want to make about the United States and about the DRC, one striking contrast which came out of the assignments, at least your initial comments where you talked about you were skeptical of ASEAN being able to rise to the challenges, and most of these in your talk were related to politic, political and security, those kinds of arrangements and those kinds of challenges. I was struck by the fact that it is not just the last meeting, but if you just look at the literature and the reality of the situation, of that, of sort of the bumps there, the problems there with the--I wouldn't say seamless, but I would say since the recovery from the 1997 financial crisis, a kind of ever-growing economic integration and ever-growing economies, in other words, on the economic side, for all the problems that are related, and they are serious, there is another stream of things happening on economics and investments. That seems to go along, I mean we talked this morning all about the ASEAN countries, but the two countries that you really are going to find I think great--we talked about this last time--great, real challenges and how they react are Japan and Korea where this is a much bigger thing. But I just want to throw that in, whether it's the production networks, again, it's not seamless, but there is a kind of close--I would argue, and I have argued before--that I think the kind of connections you get with the production sharing, and you mentioned this, I think, kind of the chopping up of the value-added chain, are much stronger I think than just your normal trade relations where you are exporting and importing. This investment trade nexus is something we haven't really thought about.  Economists think about it, are just beginning to think about it, but the implications of that for political and other issues, it seems to me, are new. Now, let me move on to the questions that particularly Ms. Goh talked about in terms of the institutional challenges, I am really struck by the--I would be more critical actually and worried more than she was about the United States in the sense that I am not sure--and I will come back to this--one of the things that was thrown in all through this that has been driving me crazy with my own research out here, these political science terms that we are talking about, about bandwagoning and reacting with constructivism versus realism. But here, I am speaking as I suppose a liberal internationalist in terms of international relations theory, and that is, I worry about the political, the ability of the United States in terms of its political institutions and its politics, that is, the internal dynamics to be able to rise to the challenge, and I will come back to that. But I do think, coming out of particularly Ms. Goh's last points, and this goes again back to what we talked about the last time, the challenge of how the United States either somehow reinvigorates APEC versus the allowing or how it reacts to the growing, as both of you I think said, for all the problems, the growing influence and the extension of the activities of the ASEAN + 3 is the kind of key, a point that I would key on. I think also, and this goes beyond I talked about the internal dynamics and the problems that I think we face in terms of our internal institutions.  I had said at the end of my talk last time that I thought the United States ought to make it clear that anytime you go out in East Asia or Southeast Asia from the bilaterals to some sort of regional agreement, that we wanted to be at the table. But I am not sure that certainly President Bush or his successors can bring the United States to the table, so that bothers me.  That gets me, though, to I think in terms of the reaction, your points about style and about how we approach. One dissent I would say you suggested that we really pursue, continue to pursue the bilateral.  The problem with that is that we are always going to be the dominant, and we are always going to be dictating. I mean I was just out in Thailand, I think after the last time we met, and we were talking to the Thai Government and various officials, parliamentary leaders, NGOs about the U.S.-Thai FTA.  There was a great deal of concern.  There is not much understanding, by the way, because the government of Thailand is just going to put it through.  They don't have to go to the parliament. But there is a reaction in the sense that the United States is dominating this discussion, and at any point you have is bilaterals except maybe with Japan.  You are going to have this kind of imbalance of power, and so we are going to project it whether we want to or not, and so this drives me back to a couple of things. One, it would be I think, although I don't think there is much likelihood of this, the United States ought to think in terms of even changing its strategy a bit in terms of the bilaterals. We have really--and this is true particularly with the Bush Administration--but I think it would be true with a new administration, whether Democrat or Republican--we really see the bilaterals as a way of really driving home things that we want, and this sort of WTO-plus, intellectual property going beyond in services, and particularly the kind of high judicialization that we want. It seems to me for us to succeed in going beyond this, we have got to begin to mute that.  Now, I say that, that is, that we have got to begin to move in the direction of the Asian way as it were, of not really saying we want to dot every i and cross every t, and we want to take you to a panel if you do something incorrect. I know that for the U.S. corporations in this audience, this is causing you immediate heartburn, but I am just thinking in terms of the realities out there. Finally, as I say, this is going to be random, another point to throw out, this happened at least in my knowledge and my education, since we met a month or six weeks ago, is that at the time I said that it was unclear to me--this is in terms of trade and economics, not in terms of security, the ARF--whether the Chinese, really, the PRC had formulated or had begun to formulate policies about how it dealt with new sub-regional and bilateral arrangements. I think since then, this has become clearer, at least it was my own ignorance maybe, there were probably documents there, but it is very clear that the PRC has a very active program in terms of a bilateral and some regional arrangements in Africa, in South America, and documents coming out of the government make it clear that this is going to be quite active in the next couple of years. My colleague and friend, Gary Hufbauer and another colleague of his at the IAE have just published a paper on this, and they have listed some 16 or 17 new trade agreements that the Chinese are now pursuing. I think one of the problems there, and one of the things you have to be careful about, is that what they count as free trade agreements are often just commercial, I think more commercial treaties.  They don't go to FTAs, and so we have to be very careful about definition, but it is clear that the Chinese are going to be much more actively involved, that they have pivoted, as it were, I will use that term, from their sort of single fixation on getting into the WTO, which I think dominated Chinese international economic policy for the mid-to-late '90s and through 2001 to a much broader sense of participating in what they consider an inevitable trend of moving beyond just WTO rules or supplementing WTO rules with bilateral regional agreements. They approached this, I think, and this is true of many of the East Asian countries, they don't really think of this, and I offer this as a comment, somebody might react against it, but I don't think either the Chinese or other nations in East Asia really think about these in terms of economic treaties.  They think of it as political treaties. The United States has got to at least think about how do we react to that, because we think of it only in terms understandably of commercial goals, commercial goals that are often driven by our private sector. Now, I would defend the fact that since our private sector over the last 20 years has been in most sectors, automobiles deal aside, we could compete worldwide, our private sector was driving for trade liberalization generally. But in the situation now, I think we may be reaching an endpoint. I think with those random comments, I will just leave it there. MR. KAMPHAUSE:  Thank you, Claude. What I would like to do is take the prerogative of the chair, as is usually the case here at this forum, and to ask my own question, and then open it up to you all. We will, as I said, bundle questions, probably three I guess, and what I would ask our very nimble and flexible panel members to do is to incorporate responses to Claude's comments, as well where it fits in with what our audience asks today. My question is actually more in the security realm, and it arises from the conference that you two led and with the able leadership of Michael Wells, my colleague from NBR, who runs our Southeast Asia program in Singapore. When we talked about the security issue, and particularly China's military rise, I was struck by the fact that each of the Southeast Asian participants spoke of the dilemma or the challenge in the nearly exclusively bilateral basis. They talked about the security challenge they face with China in terms that dealt with their bilateral relationship with China, and did not, to my hearing, even begin to want to conceptualize how they might cooperate with any sub-organization of the ASEAN members. Now, that is my observation.  My question is primarily to Evelyn, do you think that that is a sort of mirror of how the U.S. has acted in Asia?  You emphasized the bilateral security relationships that the United States emphasized.  Is that sort of mirroring back to us, or is there is a deeper dynamic there that is worth understanding? With that, I will open it up to questions.  I don't know if we have mikes.  We do.  Okay.  This gentleman right here up in the front, and then we will go directly to the gentleman right behind him, and then the gentleman next to you, so we will do all three at once.  Please identify yourself and ask your question in as brief a manner as you can. MR. SEFF:  Robert Seff [ph], [inaudible] Accuracy in the Media.  I guess I will try to put a category's future.  Since national security, I don't really it was talked about military-wise, China's budgets I think are like now in annual double-digit increases, and I was sort of curious, what do ASEAN states think that this enormous buildup is really targeted against, and how is it not seen as a threat? The second question is:  Since there is a growing urban-rural divide in terms of incomes, I am sort of curious, and the political instability that comes from that, does that collapsed potential of China, how do ASEAN states think of that as a future possibility and a future threat? MR. KAMPHAUSE:  Great.  Thank you. Right behind you, the gentleman in the blue coat. MR. ECKARD:  Paul Eckard [ph] of Reuters News Agency in Washington. Professor Simon talked about the ASEAN + 3 process seeming to eclipse APEC, and I was hoping both the Professor and Professor Goh would elaborate how they think the rest of the year will play out where we have an APEC in coming weeks, and then we have that first East Asian Summit that excludes the United States pointedly. Is that further sort of another nail in the coffin of APEC or of U.S. interests in the region? MR. KAMPHAUSE:  Great.  Thank you. Right next to you. MR. GOFFNER:  Hi.  Rob Goffner [ph]. My question or my theory is kind of reinforced by Mr. Barfield's statement about the politics or the government actually taking an active role in forming relationships in Southeast Asia and making things better. My question then:  Are there partnerships or should there be partnerships between the U.S. and China on the government level that are in parallelity with each other to help Southeast Asia form the institutions that Dr. Goh were talking about to meet their goals? In my opinion, it seems that if there were partnerships on the government level between the U.S. and China, it would be less of a tug of war from what I see between the two sides, and the more of a I guess you would a harmonizing role in developing the Southeast Asian region. MR. KAMPHAUSE:  Great.  Thank you. So, three questions on the table.  I would ask each of you to respond as you see fit.  The first alternative futures in how ASEAN members or Southeast Asian states would interpret alternate futures for China. The second, some assessment about whether ASEAN + 3 is eclipsing APEC, and then last, is there room for cooperation between the U.S. and Chinese Governments on Southeast Asian issues, so a wide range of things here.  The field is wide open. DR. GOH:  I am just trying to put all these questions together.  I think one of the first things to say is one mustn't forget, looking at the Southeast Asian region, and this relates to your question, Roy, that it is a region marked much more by differences than it is by similarities.  I mean there are 10 now very discrete countries. ASEAN, to a large extent, is a construct of regional imagination.  There is no such region.  This is not the European Union here.  So, as a result, it's not surprising that many countries now especially would talk about China and the U.S., but primarily China, from a very sort of national point of view, because they do perceive that constraints and the opportunities vis-a-vis China are quite different from those faced by their neighboring countries. So, in one way, the traditional U.S. approach to a region of bilateralism is very well justified simply because these countries are more different than they are similar, and partly because they have not generally managed to get their collective act together, not even with ASEAN. Here, Shel will probably disagree with me, but I think it is fair to say that today, with the expansion of ASEAN into 10 states rather than the original six, that that divide is even clearer than before.  There are now at least two different tiers of ASEAN, if not 10 different countries. So, you know, to find any kind of collective voice on any political and especially economic issue is simply out of the question. This brings me to that question of bilateralism versus non-selectualism [ph] and relating to U.S.  This is why I say I think bilateral relationships still for a long time have got to be the fundamental basis of any great past relations with this region. China knows that very well.  It looks good at a multilateral level, but all the hard core business is done at the bilateral level.  Simply because if you attend any of these multilateral meetings, you know what whatever gets presented on the ASEAN side is basically, anything reduced to the lowest common denominator.  You can't get anything done. The U.S. knows this very well, too, so I can't see that there is going to be an effective multilateral alternative to this. There is also the question that ASEAN countries themselves prefer to work bilaterally when it comes to hard core business. Shel and I were talking on the way here about many Southeast Asian countries' preferences for deepening military, to military relations with the U.S., and none of them want to, for instance, have joint exercises on the multilateral basis with the U.S. armed forces.  They all want to do this bilaterally. There is a lot of residual coordination problems, as well as suspicion among Southeast Asian countries. Quickly, then, to reactions, other reactions to the military rise of China.  I think on that front, as a whole, ASEAN is much more sanguine about that than the Americans. This came out very clearly in our project, I think, simply because--and that is my personal view is there is nothing to fight about in Southeast Asia itself, and this is reflected in our Southeast Asian papers to do with the military. First of all, the assessment of Chinese capabilities is much less alarmist than some American assessments, and crucially, the assessment of Chinese intentions vis-a-vis particular kinds of military operations against Southeast Asian interests and in the Southeast Asian region is fairly optimistic. Apart from the South China Sea, there is really nothing to fight about.  Land invasion is out of the question, and so on, and so forth, so much of it is perceived to be really not--the military threat directly is not perceived to be particularly strong from China. Besides, Southeast Asian countries are engaged in arms races against each other anyway.  That is the main point, and they are also developing their own militaries to deal with internal problems, not external ones. The scenario of domestic collapse in China as a potential threat, that is critical in Southeast Asia.  That is what mainly Southeast Asia worries about. Hence, you know, the extent to which Southeast Asia buys very much more the Chinese leadership's claims that their main aim is economic development, the betterment of the lives of the citizens, the evening out of regional disparities within China, because Southeast Asian countries have the same problems. They are all in the same stage of development, and many of them are large countries facing the same kinds of issues. Again, countries like Singapore and Thailand are very familiar with the problems of what happens if you have a neighbor that is unstable, that, you know, has domestic strife, at the very least you have problems of refugees, and so on, and so forth, and that is really quite a key concern for Southeast Asia. Having said that, I think that most Southeast Asian states have fairly good expectations of the potential success of the Chinese Government as it stands now in dealing with these problems. I think the view in Southeast Asia very much is that it is the best prospects for China are sort of the limited kinds of democratization in opening up that the current government is doing, because anything else would be gravely destabilizing domestically.  So, this is the general reaction. I think I will hand it over to Shel at this point. DR. SIMON:  Well, fortunately, not only do I concur with what Evelyn has said, but she has really answered most of the question, so, thank you.  I will try to kind of pick up on some of the questions as I recall them that Evelyn may not have touched on quite so directly. I was struck by something that Mr. Barfield said at the very beginning of his comments about the domestic politics of the United States and how they impact on some of these issues.  I think that is very important. There is a general principle that all people involved in foreign affairs analysis should remember, and that is that all politics is local, and I think that is true of much of U.S. foreign policy, as well. I am thinking particularly of the difficulties we have in restoring a military relationship with Indonesia, the executive branch wants to do it, the problem is Congress, and more particularly, the Senate, and more particularly, one particular senator, not that I am in any way, shape, or form justifying human rights violations in Indonesia, but the importance of restoring that relationship to Indonesia, I think is key to restoring a much broader political relationship with Indonesia which is absolutely essential for effective U.S. policy in Southeast Asia, so the local politics once again impact the key foreign policy area. On APEC, I am not sure that I am in the minority here, but my feeling is that although APEC has never been a major player in the international economic scene, curiously enough, after 9/11, I think APEC became a major player on the security scene. Now, much to the chagrin of some of its members, particularly Malaysia, but APEC, perhaps more than any other institution in Asia, because it deals with trade, and because it can make decisions having to do with how ships get access to their markets, APEC set up a maritime security initiative that came out of APEC, which the Americans sponsored and which much of the rest of the APEC membership bought onto. In effect, the ports of shipping countries have to provide us a particular level of security particularly for cargo containers if they want those cargo containers to go to the head of the queue when they are coming into U.S. ports. That was an APEC initiative.  It has been very effective.  It has helped to secure international maritime traffic, and it is essentially a security issue that came out of what is ostensibly an economic organization. I was intrigued by the question about is there a possibility of U.S.-Chinese cooperation.  Cooperative security is something that political scientists are fascinated with, I am not quite sure how policymakers feel about it, and in my fantasies--I must admit I have never really written about this--but in my fantasies, I can see where there are common interests that the U.S. and China have, particularly international trade, protecting the slocks [ph]. As China becomes more and more involved in investing in equity, energy ventures globally, China needs freedom of the sea lines of communication, the same way the rest of the world does.  It's a major trading state.  It is going to be even more of a major trading state. So, the question is, and this is my fantasy, can the U.S. Navy and the PLA Navy ever agree with other literal navies to engage in, say, joint anti-piracy activities, other kinds of slock protection, environmental concerns on the ocean. These are common interests, can they be translated into common policies?  I don't know, but as I say, it is something I fantasize over.  I will leave it at that. MR. BARFIELD:  Just two points.  One, it seems to me another area, and you touched on it, but you did it in terms of security, but there is a crying need for the Administration, or the next Administration, to step forward and suggest some sort of cooperation or at least discussion quietly behind the scenes on the whole question of energy. It has security implications, economic implications.  We have just said it's a disaster, and to start educating the Congress about that.  If nothing else, that would be a plus. Secondly, I defer to you.  The two of you know better than I the reaction of East Asians, but I think the problem with APEC has been that I don't have any problem with security being a part of it, and the problem you talked about, but our fixation on security has reached a point of diminishing returns, it seems to me. The President, when he went out there, and it will be interesting to see what happens this year, the President, when he went to APEC last year, said not one word about economic liberalization or about trade. He talked totally--and I have no problem with the Administration support more than probably most people here on the panel, its policies or deterrence, et cetera--but it is just this monovision is really undercutting our ability to lead APEC if--I mean, as I say, I am skeptical of APEC ever emerging again as a force for liberalization--but you certainly are not going to do it if you don't even talk about it. MR. KAMPHAUSE:  Great.  Let's move on to a couple more questions.  Right here and then right there. MR. RENSHAW:  My name is Renshaw [ph] from High Institute for International Studies, China.  I happened to be in Washington. Just one small thing to add to Dr. Goh's presentation, a possible defense ministers meeting in East Asia.  So far, ASEAN has never held a defense ministers meeting partly because of as the nature of the organization, it was not created as a security organization or military organization. But one suggestion is now on the table for the ASEAN to hold a defense minister meeting.  So, if that happens, it will be more possible for the defense ministers of the ASEAN countries and of China to get together and conduct dialogue. If that happens, should the United States worry about that?  I don't think so.  On the contrary, I think the United States should welcome as a kind of develop, because there will be more dialogue of security issues, and there will be more transparency on the issues. My question is for Professor Simon.  ARF, given the current status of the ARF, what do you think is the U.S. Government policy concerning in what direction that the ARF should be moving?  As a scholar, what do you think the ARF, what direction that ARF should be moving?  Thank you very much. MR. KAMPHAUSE:  Our second question is right here, and then our third is back there.  The gentleman right here. MR. LOWMAN:  Walter Lowman [ph] with the U.S. ASEAN Business Council. To some extent, I guess we are involved in a competitive diplomacy with China and ASEAN, and to a large extent, I think we would have to admit the Chinese have been winning over the last few years. A new entrant in that competition is the enhanced partnership idea that Zelig [ph] came forward with a few months ago.  It is in some measure to make up for the miscue on the ARF in July, but I would like a comment basically on the prospects for that enhanced partnership, do you see it as an effective mechanism, what could be a part of that, because I think it will be flushed out in the next couple months exactly what it means, what could be an effective part of that in order to boost our side in the competition? MR. KAMPHAUSE:  Right over here. MS. KIME:  Hi.  Thanks.  Shirley Kime [ph] with the Congressional Research Service. Mr. Renshaw from the Shaw Institute presented a very interesting comment, and he said that if there is an ASEAN-China meeting of defense ministers, that the United States ought to welcome such a meeting. My question, as a follow-up to him, is then would China welcome the United States Secretary of Defense to also attend this meeting? Secondly, for the panel, I wanted to ask on what issues would Southeast Asian countries prefer the United States to be the leader rather than China, or neither? MR. KAMPHAUSE:  Shel, let's begin with you. DR. SIMON:  Yes, that's an interesting question. That could well be in the works over time.  For example, defense officials from the ASEAN states [inaudible]--you heard me, hopefully, I don't have to repeat myself, right?  Okay. The ASEAN security community has been broached in the past, but never really carried up to a decision.  With an ASEAN charter, I think there may well be as one of its components an ASEAN security community, and if that happens, I wouldn't be a bit surprised if one of the components of the ASEAN security community would be meetings among ASEAN defense officials. I would suggest that is probably one or two years away, but it may well be in the works.  Would that then lead to an ASEAN-wide defense ministers meeting with the PRC?  Possibly.  Would it lead to an ASEAN-wide defense ministers meeting with the United States?  Possibly. Would it be a kind of effort to restore the original Shangri-La dialogue, which did include China? Possibly.  These are all straws in the wind.  We simply don't know, but I think, I guess maybe I am a little--you know, I said I was a friendly skeptic--I guess it means that I am more glass half-full than half-empty.  I know you are probably more glass half-empty. But I think there are directions here that are leading to greater institutionalization.  I look at the political security side more than the economic side, and Mr. Barfield is right to point out that the economic side is a much more favorable dimension than the kind of things I look at, but I am fairly optimistic that these things are going to happen within the next five to 10 years. The question about where should the ARF go, what kind of direction should it have, if you look at what it has "accomplished," quote, unquote, it seems to me that the primary path for success of the ARF would be to focus on what are called "nontraditional security issues."  They dominate to a very large extent, I think, ASEAN's agenda. We are talking about illegal arms trafficking, illegal human trafficking, illegal narcotics trafficking, terrorism.  All of these are serious issues for many of the ASEAN states, and they require collaboration among law enforcement, intelligence, customs officials, and this is beginning to happen, but it is not happening on an East Asian-wide basis. It is happening primarily on a bilateral basis, and I would like to see the ARF try to extend that with respect to nontraditional security issues. Let's see, the enhanced partnership that was raised with the United States, I sense that the U.S., in part based on a Thai request that has occurred within the last few months, that the U.S. do become more involved with the ASEAN states as an institution, the ASEAN as an institution. My impression is that the U.S. has responded positively to this, and there is talk about enhancing the relationships in cultural terms, expanding the Enterprise for ASEAN initiative, expanding political relationships. How that is going to actually work out, I think we are going to have to wait over the next several months to see, but I get the sense that the government has finally recognized that ASEAN is something that is more important than it has recognized up to this point, and that was sort of symbolized by the fact that Secretary Rice chose to pass on the last ministerial meetings. So, again, I am somewhat more optimistic.  I am not sure if I am more optimistic that you, Evelyn, but I will stop there. MR. KAMPHAUSE:  Evelyn. DR. GOH:  Let's take the enhanced partnership question first, since that was what Shel talked about before.  I am interested in the way you phrased the question.  I think the enhanced partnership initiative is excellent, and it shows the Administration beginning to talk to the issues that Southeast Asians have said for the last four years that we want to talk about. Specifically, it is talking to the idea that Southeast Asians want to engage with the U.S. as a group. Now, whether that is, you know, effective is another point, but they want to. But the way you phrased it is interesting, would it help the U.S. in its diplomatic contest with China.  I must come back to you with a view that I don't think is shared, you know, largely in Southeast Asia, but I am not a policymaker, I am an academic, so I can say these things. Do you want to fight diplomatically with China in Southeast Asia?  You know, a lot of what I have talked about is tempered by this feeling, this conviction I have that you probably don't.  Southeast Asia is not that important to the U.S.  It is not your backyard. It is China's backyard, and for a long time it has been, you know, the most friendly peripheral area that China has had, so it has been the logical place for it to invest its resources, and so on, and so forth. Then, you begin to see China moving its resources out of that region now actually that it has been successfully done.  So, I don't know that you want to spend massive amounts of resources thinking about how to fight the politic with China and this part of the world.  I think the game is over pretty much. So, that is one thing, but think about the enhanced partnership I think, coming back to the issue about earlier comments about economic initiatives in this region. Again, one of the things that Southeast Asian countries have been screaming their heads off about for the last four years is we would really like the U.S. to demonstrate to us that we are more important to you than simply on the issue of terrorism alone. I mean we are a viable trading region.  We are not just, you know, a cesspit for terrorist organizations.  In that sense, I don't know that I agree with your slightly more pessimistic readings of the Bush Administration. I think it has put forward a number of economic initiatives, which have been very much appreciated in the region, the Enterprise initiative. Zolig's visit to Southeast Asia late last year was incredibly successful, because it signaled for the region that okay, this administration wants to talk economics, which is all that matters really for Southeast Asia, and Zolig's latest visit to China was very well received in Southeast Asia because it seemed to signal a broader intention to return to these fundamental issues for the region at large. So, there is certainly lots more to be done there, and these are initiatives that will carry for some years, but that is a very, very positive sign. On the question of on what issues Southeast Asia will prefer to see the U.S. as leader, or China, or neither, the truth is I think Southeast Asian countries have a very realistic perception of their own world, and the U.S. role in the world, too, and it is very realistic to recognize that the U.S. is a global super power, therefore, the U.S. logically would have to lead on big-item, hot-ticket issues on the global stage. When it translates into the local or sub-regional context, the U.S. is expected, hoped to take the leadership on big issues, such as maritime security, which the region knows no one else can help to the extent that the U.S. can help, and in which the U.S. itself has massive interests. So, things like that definitely, there is a preference for U.S. leadership. Now, on the question of Chinese leadership, I really don't know that you can force an answer from ASEAN countries about what issue they really want to see Chinese leadership on. They want China to play a constructive role in the region, probably a constructive kind of leadership role in the region, but when it comes to concrete issues, it is not clear that China has the resources or the capabilities at this point in time to contribute greatly to any major initiative in the region. Look at its contribution in the tsunami, not much [inaudible] supportable in the tsunami than China could.  So, you know, there is that problem. I have written elsewhere that I think generally, in the Southeast Asian region, there is a marked preference still for American leadership and predominance, and a Chinese role in the region that comes second to that.  I think I will stop there and see if Shel wants to add anything. DR. SIMON:  Listening to Evelyn, it jogged my mind.  It seems to me that one of the things that the Southeast Asian states should concern themselves with when dealing with China is to ask, even though up to this time, China's relationship since the mid-1990s have been extremely positive, as I think one of our authors put it, China has picked low-hanging fruit. In other words, its positive relationships have cost China essentially nothing and have earned a great deal of credit.  The interesting thing to me will be sometime in the future, there are going to be issues, in fact, I can think of one already, and that is the Mekong River arrangements among the riparian states in China. There are going to be situations in the future, will China, if it's going to cooperate, will have to absorb costs, and the Mekong situation does not put China in a favorable light. The Mekong, as I am sure many of you know, originates in China.  The riparian states are below China. China is building dams on the Mekong for very good reasons. They need to provide electricity for the western part of the country to develop it, for irrigation, and so on, but by building dams on the Mekong, there are, in effect, creating deficits for the lower riparian states, which need those waters again for a whole variety of activities. The riparian states have asked China to please consult us about this, to collaborate with us, try to work this out on a joint basis.  China so far has stonewalled. Now, there, I think is an important issue.  Here is something that if China were really to collaborate, it would have to bear costs, and so far it has been unwilling to do so. MR. KAMPHAUSE:  But there is a factual answer to that, which is the ARF did host a security policy dialogue last November, and the U.S. was invited and did send an assistant secretary level representative.  So, at least at that level, that did take place. But one of the things that people who attend these sessions and the seminar throughout this year appreciate is that it ends, however abruptly, at the appointed time, so without even giving you notice that there would be a final question, we are going to end, and thank you all for coming and thank you to our panelists. - - -</body></html>