Pivot to Asia

The US President will take part in the 25th ASEAN Summit set to take place in Myanmar's capital Naypydaw from November 12 to 13. The visit is part of Obama's week-long trip to Asia where he also travels to economic forums in China and Australia.

Obama's trip comes as the US seeks to reassure Asian partners of its commitment in the region in the face of China's increasingly aggressive behavior.

One of the key discussion points in the forums is expected to be trade, where the US and China are vying for regional influence. While China has been pushing for the Free Trade Area of the Asia-Pacific (FTAAP) at the APEC Summit in Beijing, the US is trying to finalize the Trans-Pacific Partnership (TPP), a trade deal between 12 Asia-Pacific countries, which would encompass 40 percent of the global economy. But the TPP - which does not include China - has been the subject of protracted negotiations.

However, Rajiv Biswas, Asia-Pacific Chief Economist at the analytics firm IHS, says in a DW interview that their new majority in the US House of Representatives and the Senate will allow Republicans to increase pressure on President Obama to push for a deal in the TPP negotiations. This could also accelerate other US bilateral and multilateral trade talks, adds Biswas.

DW: Considering China's growing clout in Southeast Asia, how important is this year's ASEAN Summit?

Rajiv Biswas: China's ascendancy as a global economic and military power has made ASEAN-US dialogue increasingly important for peace and stability in the Asia-Pacific region. While the ASEAN region has been one of the main beneficiaries of China's rapid economic growth - which has driven bilateral trade and investment flows - there have also been increasing political tensions between China and several ASEAN countries over disputed territorial claims in the South China Sea.

For a number of ASEAN countries, the US is seen as a stabilizing force to counterbalance the rapid rise of China. Therefore, one of the key areas of focus at the ASEAN-US meeting will be on the degree of US commitment to its pivot towards Asia, at a time when the US is again embroiled in renewed turmoil in the Middle East.

What will be the main political and economic issues on the agenda?

While the Obama administration's commitment to the US pivot towards Asia will continue to be a key area of focus, there are a broad range of other important issues that will be discussed. The rise of "Islamic State" (IS) in Iraq and Syria has also triggered some support amongst extremists in Southeast Asian countries, and increasing anti-terrorist co-operation between the US and ASEAN will also be on the agenda.

For the US, concluding a deal in the Trans-Pacific Partnership (TPP) negotiations is also an important priority, and President Obama will seek to get political commitment from leaders of ASEAN countries involved in the TPP trade talks to finalize an early deal.

What role is China's growing influence expected to play in the talks?

Among the ten ASEAN member states, there are different perspectives about China's increasing political and military power in the Asia-Pacific region. Political tensions between China and Vietnam as well as China and the Philippines have increased significantly over recent years over territorial disputes in the South China Sea. Myanmar, which had been very dependent on China economically prior to 2011, has also been seeking to diversify its economic and political relationships.

Therefore, the impact of China's rise will have a significant influence on the US-ASEAN talks, particularly in the bilateral talks between President Obama and leaders of some ASEAN countries. A key objective for the US is also to maintain strong economic relations with the ASEAN countries, to support US firms in their efforts to tap the fast-growing consumer markets of SE Asia.

What does ASEAN expect from the US both politically and economically?

From an economic perspective, the US remains a key market for ASEAN exports as well as an important source of foreign direct investment. US multinationals have established very significant operations in ASEAN for both manufacturing and services since the 1960s, and ASEAN countries will be keen to continue to attract strong US investment inflows.

Therefore, building bilateral economic ties and attracting new foreign direct investment (FDI) from the US will remain a key priority for ASEAN countries over the medium term. From a geopolitical perspective, a number of ASEAN countries will be looking for continued US commitment to its Asian pivot and to building their bilateral security ties with the US to maintain long-term peace and stability in the Asia-Pacific.

Are any breakthroughs to be expected?

An important focus will be on bilateral talks between ASEAN leaders and President Obama held in the wings of the summit. With Myanmar hosting the summit, a central issue for bilateral talks will be the upcoming Myanmar general elections due to be held in 2015. President Obama is scheduled to meet Myanmar's President Thein Sein and will also meet with Aung San Suu Kyi, with a key topic from the US perspective being whether Myanmar's parliament will allow Aung San Suu Kyi to run as a candidate for president.

To which extent is President Barack Obama's policy towards Southeast Asia likely to change now that Republicans won a commanding majority in the House of Representatives ad regained control of the Senate?

This will likely allow the Republicans to press for a trade deal in the TPP negotiations. It could also accelerate other US bilateral and multilateral trade talks.

How do you expect US-ASEAN ties to development in the coming months?

The political and economic relationship between the US and ASEAN has been built up over several decades. The bilateral economic ties between the US and a number of ASEAN countries have deepened over the last decade, including with Indonesia, Malaysia and Thailand. With the US economy forecast by IHS to strengthen in 2015, this will make the US a growing export market for ASEAN, at a time when growth momentum in the Eurozone and Japan is faltering.

With US corporate profits still remaining very strong and the US dollar appreciating against emerging markets currencies, there should be some upturn in US foreign investment flows into ASEAN. With the US continuing its pivot towards Asia and a number of ASEAN countries seeking to strengthen bilateral US ties, there could also be increased defence security co-operation between US and some of the ASEAN partners.

Rajiv Biswas is Asia-Pacific Chief Economist at IHS, a global information and analytics firm. He is responsible for coordination of economic analyses and forecasts for the Asia-Pacific region.