1. US Policy in the Asia-Pacific Assessing the “Rebalance” Terence Roehrig Professor, National Security Affairs Director, Asia-Pacific Studies Group US Naval War College The views expressed here are the author’s alone and do not represent the views of the U.S. Government or the Department of Defense or the Department of the Navy

2. The “Rebalance”  Middle East wars winding down  Important US interests in Asia  Economic center  Important allies  Security challenges October 2011 2015 US National Security Strategy “The United States has been and will remain a Pacific power.” “Over the last six years, our rebalance to the Asia-Pacific has established a ‘new normal’ of intensified engagement in the region. We are committed to extensive collaboration with Asian allies and partners on important global issues and a high tempo of sustained engagement.” Asst Sec Daniel Russel, April 2015

3. 5 Pillars of the Rebalance  Coordination/modernization of alliances  Expanding trade and investment initiatives [KORUS FTA & TPP]  Deeper cooperation with emerging powers: China, India, Indonesia, Vietnam  Increased engagement with multilateral institutions [ASEAN]  Promote democracy and human rights Implications…. Defense Strategic Guidance [January 2012] -Europe would be a provider, not consumer of security -Africa & Latin America: low cost approaches -no more long-term stability operations [Iraq & Afghanistan]

4. TOP US TRADE PARTNERS 2014 Total Goods Trade Billions USD 1. Canada658.1 2. China590.7 3. Mexico534.5 4. Japan200.9 5. Germany172.6 6. S Korea 114.1 7. UK107.9 8. France 78.2 9. Brazil 72.8 10. Taiwan 67.4 11. India66.9 12. Saudi Arabia65.7 13. Netherlands64.5 14. Italy59.1 15. Belgium 55.7

5. US-China Economic Ties 2014 Total Trade $590.7 billion * $342.7 billion trade deficit * $1 = 6.22 yuan [Apr 2014] * #2 trade partner for USA; 14.9% of total trade Foreign Exchange Reserves -$3.84 T in FX reserves (Dec 2014) 66% dollars [25% euros] TOTAL US DEBT: 18.2 trillion -China+HK holds $1.43 T of US debt 7.7% of total debt Feb 2015 22.7% of foreign holdings [total foreign holdings: 6.16 T]

6. China & the Rebalance 2015 US National Security Strategy -welcomes a rising China -seeks cooperation -rejects inevitability of confrontation -insist China uphold rules & norms -monitor China’s military modernization -cyber security concerns Is the rebalance “containment”? Should it be?

7. Trans-Pacific Partnership (TPP) Trade Promotion Authority (TPA) or “Fast Track” [expired in 2007] -President can negotiate a trade pact -Congress can only vote yes or no – amendments not allowed TPP -center-piece of economic “rebalance” -40% of global GDP; 33% of world trade South Korea and TPP 12 Members Australia Brunei Canada Chile Japan Malaysia Mexico New Zealand Peru Singapore USA Vietnam

8. China-led Multilateral development bank Financing for infrastructure projects 57 founding members $50-100 billion start up US & AIIB?? Should Japan join AIIB?

9. Challenges for the Rebalance? 1) US is distracted: Syria, Iraq, ISIS & Ukraine *Global power with global interests 2) Finances and Budget (sequestration) 3) Economic & Political side of the Rebalance 4) Conclude the TPP 5) China

10. North Korea nuclear weapons & US Policy “Strategic Patience”! -the ball is in Pyongyang’s court -Goal  denuclearization! -willing to engage with conditions -work in multilateral forums to sanction & pressure

11. Future policy direction? Parameters -NK is highly unlikely to denuclearize -NK will not be accepted as a nuclear weapons state -military action/regime change is unlikely -China is unlikely to push NK hard Way ahead Engage? Incentives? More pressure? Pres Park Geun-hye “Trustpolitik”

12. Questions & Comments? terence.roehrig@usnwc.edu