By John Yoo and Riddhi Dasgupta, Fortune.com
forging an alliance with Thailand, Taiwan and other Asian nations, the
U.S. and India can accelerate economic growth in the region.
President Barack Obama has finally resumed progress
toward one of the most important strategic goals in American foreign
policy: strengthening America’s alliance with India. President Obama’s
visit to New Delhi in January as the chief guest of India’s Republic Day
celebrations followed Prime Minister Narendra Modi’s September state
visit to the United States. For the Obama administration and its
successor, allying with the world’s largest democracy will represent a
welcome seismic shift in the balance of power.
Washington and New Delhi share common interests. The United States
and India are the world’s two largest democracies with a similar
commitment to the Anglo-American rule of law. Economic exchange between
the nations is booming. Bilateral U.S.-India trade has increased
five-fold since 2001 to nearly $100 billion. President Obama and Modi
pledged to raise it another five-fold. The Indian economy presently
produces $1.876 trillion a year, making it an attractive venue for American investors.
Economic interdependence has also laid the foundations for closer
military cooperation. Last year, India imported approximately $2 billion
in military equipment from the United States, a significant increase
from $237 million in 2009. The U.S. recently surpassed Russia as India’s
primary arms supplier. Today, the U.S. is the Indian Army’s most
frequent partner for military exercises.
America and India’s economies and political systems benefit from free
trade and regional stability. China’s rise, and the expansion of its
military and territorial aims, poses a threat to both. China’s border
with India has sparked war before. Beijing’s aggressive claims to
islands in the South China Seas reveal Beijing’s territorial ambitions
have grown alongside its economy. China seeks to replace the United
States as the leading power in Asia. India is pulling out of
nonalignment just as the reality of disorder has begun to intrude. Since
Pakistan is concerned about its nuclear-armed neighbor and depends on
American aid dollars to the tune of $20 billion over just the past
decade, necessity will temper its displeasure.
But the U.S. and India need to do more to
secure regional stability and temper China’s ambitions. A defense pact
could become the first step in a broader Asian alliance that would
guarantee each nation’s security, build their economic ties, and commit
them to protect the territorial status quo. An Asian defense and
economic network would cement India’s recent turn away from Moscow and
recognize its leading role in the region. It would keep the U.S.
committed to the region at a time of shrinking defense budgets and
rising global commitments.
India, the U.S., and their regional allies could form a Concert of
Asia. These nations already share a commitment to free markets and
democracy. It will have as its focus the moderation of China’s rise,
which threatens to disrupt the decades of stability that have unwritten
the economic miracles in Japan, Korea, Taiwan, Hong Kong, Singapore, and
now even China itself. It will also help contain other threats to
regional stability: Pakistan’s religious extremism, terrorist networks,
military overlords, and Russian aggression. This partnership has obvious
economic and security advantages. In 2013, just the export-driven Asian
Tiger (excluding Hong Kong, now part of China) and Tiger Cub economies
had a combined GDP of almost $4 trillion. To export-oriented nations,
military defense is of paramount importance.
A new Concert of Asia for the 21st Century could mark the way for
closer economic ties. An encouraging sign is the upswing in U.S.
investment in ASEAN countries to $204 billion in 2013, a rise of 9.1%
from 2012. The extant seven-member Asia-Pacific Trade Agreement (APTA)
is simply inadequate to take advantage of this momentum. Primarily, it
has no defense component. Moreover, not only does it lack a key player
like the U.S. to help balance this trade configuration, it also contains
nations like Mongolia whose inclusion in the APTA has led to special
concessions to less developed countries. Yet even the APTA’s signatories
have recognized that without an effective and equal investor-state
dispute settlement mechanism which protects foreign investors’ rights,
any such agreement is a doomed non-starter. The South Asian Free Trade
Area, which deals primarily with reducing customs duties, is also
flawed. A stronger model is the Comprehensive Trade and Economic
Agreement (CETA) between Canada and the EU, a treaty projected to buoy
trade, fortify economic relations among signatories and create jobs as
well as to increase $13.6 billion for European GDP.
Many of the Concert’s prospective signatories who are not Tigers or
Tiger Cubs are parties to the Association of South East Asian Nations
(ASEAN), which traded goods and services with America totaling $241.7
billion in 2013. But China, Japan and the EU are the leading trade
partners to ASEAN and the European Union is miles ahead as the largest
investor in ASEAN nations. ASEAN is being held back by the reputational
deficit of legal and militaristic instability, particularly with the
frequency of coups and martial law in Thailand, Cambodia and Myanmar. An
alliance with India and the United States, which are stable and secure
democracies with both serious military capability and the rule of law on
their side, will diminish these complications.
A Concert of Asia will signal to the world markets and to diplomatic
friends and foes alike that India and the United States, not to mention
their other allies, will help secure the stability necessary for further
economic growth. The high military spending by Asian countries reflects
the deficiency of trust in the region, which this concert will help
alleviate. The United States, India and their Asian trade partners are
in it together.
John Yoo is the Heller Professor of Law at the University of
California at Berkeley and former Deputy Assistant U.S. Attorney
General. Riddhi Dasgupta is an international law expert and author of
International Interplay. Views expressed are their own.