INTRODUCTION

ASEAN Wonk: Welcome to the ASEAN Wonk Podcast, where we bring you expert insights and regional perspectives on Southeast Asia and Indo-Pacific geopolitics and geoeconomics. I’m your host Dr. Prashanth Parameswaran. If you haven’t already, do subscribe to the ASEAN Wonk platform at www.aseanwonk.com so you don’t miss our full posts.

Our guest today is James Crabtree who has held several prior roles including senior adviser to the British prime minister’s strategy unit and director of the IISS think tank in Singapore where he helped run the Shangri-La Dialogue. He’s currently among other things a distinguished visiting fellow at the European Council on Foreign Relations. We’ll start our conversation talking through some of the dynamics in Europe, Southeast Asia, and the broader geopolitical and geoeconomic canvas. Be sure to stay tuned as we go through a range of other subjects, including the future agenda for Europe-Southeast Asia policy in the coming months, as well as related topics, including emerging areas of geoeconomic cooperation in Indo-Pacific capitals and shifting views on China.

To receive full ASEAN Wonk posts and support our work, consider a paid subscription for $5 a month/$50 a year through the button below. For more on pricing for institutions, groups and discounted categories, visit this page.

Note: The transcript that follows the above free clip preview has been lightly edited for clarity and organized into sections for ease of quick browsing. For all ASEAN Wonk Podcast episodes, full video and audio podcasts, along with edited and sectioned transcripts as well as block quotes, will be a premium product for our paying subscribers, but we will include a short free transcript preview and a clip for all readers to maintain accessibility. Paying subscribers can find the rest of the full transcript and the full video podcast right below the paywall. If you have not already, do consider subscribing, and, if you have already done so and like what you see and hear, do consider forwarding this to others as well who may be interested. Thank you for your support as always!

EUROPE’S GEOECONOMIC DIVERSIFICATION AND SOUTHEAST ASIA

ASEAN Wonk: So welcome to the podcast James. And let’s start, if we can, on the series of geoeconomic deals that we’re seeing coming out of Europe over the past year. We’ve seen just recently deals coming out with India. There’s one with Mercosur. If we go a little bit further back, we’re seeing a number of Southeast Asia negotiations as well, including with Indonesia, which even some officials admitted they didn’t really see coming because it had been going along for quite a while. How do you see this geoeconomic momentum fitting into where Europe sees its role, not just in Southeast Asia, but also the Indo-Pacific and globally? Southeast Asia is Europe’s third largest trade market after the US and China, but to what extent are some of the dynamics new here?

James Crabtree: Well so thanks very much for having me. You know, as with almost everything in life at the moment, it comes down to the Trump factor, which is that Europe has a kind of geopolitical crisis on its hands in as much as since the end of the Second World War. It has had a very close relationship with the United States and, to put it mildly, that relationship is a bit rocky now. And so it’s looking for new friends. What India would call a policy of multialignment is now something that Europe is trying to do. It’s trying to hedge and diversify. And so if you look at what does that look like, then Latin America, the Mercosur deal, has been on the cards for an awfully long time, but is now to some greater or lesser degree being signed and will come into force. There was a little bit of a hiccup because of a kind of cock-up in the European Parliament, but I think the sense is that they’ll get over that and that will come into force. Ursula von der Leyen was recently in the Middle East trying to do a little bit of Middle East diplomacy. And then the big one is India which we’ll talk about in a minute, the EU India free trade agreement which happened recently.

And so I think as is true with many other countries – in India, in Southeast Asia and elsewhere – a world in which the United States is less reliable and more coercive is one where traditional U. S. allies and partners have to look around and see what else is out there. And in a sense, it’s no more complicated than that. Europe is looking for new friends both at the kind of geoeconomic level, but also at the geostrategic level and it’s trying to build what it can to make up for what it’s lost in terms of this newly unreliable relationship with Washington.

EUROPE AS AN INDEPENDENT POLE IN MULTIPOLAR CALCULATIONS

ASEAN Wonk: And just to follow-up on that quickly. We’ve seen some European officials try to make the case that in this current geopolitical and geoeconomic landscape, countries and regions need to be thinking about Europe and the European Union as an independent pole or actor, not the archaic notion of the traditional transatlantic relationship where Europe is thought of as mostly an economic partner, not really a security partner. To what extent do you find this is a credible argument to make today and how do you see countries and actors rethinking how they are seeing Europe as an actor?

James Crabtree: I think it’s almost the other way around: I think the partners got there before the Europeans. So the line that you’re quoting that Europe is an independent pole in a multipolar order is not actually a line from a European, it’s a line from Dr. Jaishankar, the Indian external affairs minister as I think you probably know. And in a sense I think that India for instance has looked at Europe for a long time – I mean for at least the last five years – and thought that in the world in which we’re heading form then we need to treat Europe as a as a pole on its own that is separate from the United States and other relationships. And I think in a funny way, it’s almost taken Trump for the Europeans – I mean, maybe not the French – but for many of the rest of the Europeans who are pretty strongly Atlanticist to kind of make a psychological break with the United States to some greater or lesser extent. We don’t know what this will look like in the medium to long term, but for now anyway.

And I think here, Europe has a strong story to tell, maybe stronger than it realizes. As in, if you’re sitting in Malaysia or Indonesia or Singapore and you’re thinking about, okay, the US is less reliable: what are our diversification plays? Then you have Northeast Asia, the advanced democracies of Asia, you have India, you have the Middle East, Canada maybe, but really Europe is one of the big opportunities that any country that is looking to hedge and diversify would look to. To be fair, Europe is geopolitically declining relatively speaking, but it is still full of rich technologically advanced nations. Europe is also rearming. It’s spending a lot more in its military. And therefore an argument that I’ve been making for the last two years really is that the story that Europe can tell about itself is very different post Ukraine than before Ukraine. The notion that Europe was this sort of slightly peculiar postmodern trading conglomeration that didn’t have anything to say in terms of hard security, well, it’s not really true anymore. No – this is a continent and a European apparatus that has been at the very forefront of the most important military conflict in the world that has been raising money to fund that conflict that has been trying to manage geopolitical relationships around that conflict.

“And therefore an argument that I’ve been making for the last two years really is that the story that Europe can tell about itself is very different post-Ukraine than before Ukraine. The notion that Europe was this sort of slightly peculiar postmodern trading conglomeration that didn’t have anything to say in terms of hard security, well, it’s not really true anymore.”

And so if you take Europe – not just Brussels, but within Europe, you have four or five of the world’s most capable middle powers. So the United Kingdom, France, Germany, Poland, Ukraine itself, and then if you add Turkey into the mix as a NATO member, that’s six serious global middle powers. Not major powers in the sense of China, Russia, India, but capable military middle powers. And I think if you add that together, then in a sense that is why India would say that Europe is a pole in a multipolar order. And I think it’s actually been the Europeans that have been slow to tell that story about themselves and only lately have kind of caught up with the way some of the rest of the world has viewed them.

EUROPE AND THE GLOBAL MIDDLE POWER CONVERSATION

ASEAN Wonk: The other piece of that is the changing geopolitical perspective not just in Europe, but also within European countries as well. It’s difficult to get away from the remarks of Canadian prime Minister Mark Carney at Davos and his notion of a moment of rupture and the need for middle powers to collaborate, and I agree with what you said earlier that parts of the region, including Southeast Asia, have been ahead of this conversation already. But to what extent do you think Europe fits with this middle power conversation? Because as we both know, even with the term middle power, there’s ambivalence in some capitals about using the term and accepting a hierarchy of powers. And within that, are you seeing changing notions within Europe about how to think about its own geopolitical and geoeconomic map and diversifying more globally?

James Crabtree: Well I think if you look at the Europe India event that happened recently at the Brussels level then that moment was in a sense a pan-European moment. And so some of these agreements happen at the Brussels level in that it’s Brussels that makes the big trade deals. But there are a number of other kinds of competencies which can sit at the European level, and Ursula von der Leyen is probably the most recognizable European Commission president in a long time. So in a sense I think Brussels and Europe is now taken more seriously as a strategic as opposed to a trading partner. And so on the one hand, you can see Europe in terms of its economic and increasingly to some degree in terms of its strategic weight in that group of the world’s largest powers – the European Union in some ways sits next to the United States, China, India aspirationally and to some degree Russia as part of a grand block.

But then within that, you also have the European middle powers. And in some areas, particularly defense and security, these relationships are still predominantly bilateral. And therefore, India is buying French Rafale jets and German submarines and it might be striking a trade and sort of security deals with technology with the United Kingdom for instance. So I think it’s a little bit more complicated because you have this both transnational and national element with Europe. But I don’t really think there’s been this sort of jarring fall to earth in which European nations are struggling to conceive of themselves as global middle powers. I mean, that may have been true sort of twenty or thirty years ago, but, I think now, anyone in a European capital – well, I mean, in the big ones, the ones that I mentioned – would conceive of themselves as high-capacity global middle powers who are able to do things within the global system. But they are not able to operate at the same level as the really big countries. And I think that’s fine, you know? I mean, one of the things that Europe does have is it has quite a lot of these sort of capable high-tech prosperous middle powers. And therefore, particularly if they act together, then they have quite a lot of weight still in in the global system.

And again, that’s not me saying this as a kind of European. I think that’s what others see. That’s what Southeast Asian nations; that’s what India sees. And in a funny way, the Europeans are not as easy to deal with as the United States because there are lots of them and they’re complicated. They also don’t offer you what the United States offers. They don’t have whacking great big tech companies for instance in the same way. But they are sort of reasonably reliable in a way that the Trump administration isn’t. They’re certainly not erratic in the way that the Trump administration is. And therefore, you’re looking for a sort of set of powers with whom you can do business, then – this is the same with Japan or South Korea – they offer something that many countries see as quite valuable.

ASSESSING VALUE ADD IN PARTNERSHIP DIVERSIFICATION

ASEAN Wonk: And to that point and to follow-up, in this period of diversification lies the big perennial question, which is, to what extent do each of these individual actors produce a sort of value add within this landscape? One thing that strikes me in Southeast Asia is that despite the notion in Washington that Europe is associated with regulation, some of the regional governments are pretty comfortable with regulation and rulemaking. If you’re looking at Europe and the European Union, would be that sort of value add in terms of opportunities that Europe offers?

James Crabtree: Well, I think it’s complicated, right? There are things that the European Union does at the Brussels level which countries in Southeast Asia don’t like at all. So the Carbon Border Adjustment Mechanism (CBAM) is one of the ways: it’s a sort of European tool to try and manage climate change, to some degree penalizes poorer countries. They hate that. And so that bit of European rulemaking they strongly dislike. There are other rules that Europe has which are not very popular. But at a sort of more basic level, particularly when you’re thinking about Southeast Asia, then there’s a kind of underlying agreement that although countries in South and Southeast Asia tend not to be very keen on what we used to call the liberal rules-based order, they are keen on a rules-based order. Most of them are small to medium sized countries, and small to medium sized countries do not like the idea of a kind of gradual collapse back into a world in which the strong do what they can and the weak do what they must. And therefore there is a kind of congruence between European nations and Southeast Asian nations.

So for instance, if you take something like wanting to have UNCLOS and rules of the sea, then actually having European nations around is quite helpful. Because they give some ballast to the idea that these are rules that cannot simply be kind of ripped up by great powers at their whim. So I think I think at a basic level, both Europeans and Southeast Asians – and actually it’s true of India as well – they might disagree over what the rule should be in a rules-based international order, but at least for now, they do want to have an order that is rules-based albeit not liberal. You know, one of the things that Europeans have learned to do is – as a friend of mine in Germany who had the line which he used at the last Raisina Dialogue – to be less strategically obnoxious. And so they sort of ceased to a large degree going around in South and Southeast Asia wagging fingers and talking about human rights and generally annoying people. That has helped because in neither jurisdiction did anybody particularly welcome being given lectures by Swedes and Dutch people about the state of their internal politics. And so to the degree that Europe has kind of put a lid on that, then that has helped.

“So for instance, if you take something like wanting to have UNCLOS and rules of the sea, then actually having European nations around is quite helpful. Because they give some ballast to the idea that these are rules that cannot simply be kind of ripped up by great powers at their whim.”

In terms of what Europe has to offer, it’s pretty clear: it’s still the world’s largest market and therefore the trade deals are huge. If you are in the business of striking trade deals, European Union is one of the most important ones that you can strike. For Southeast Asia, it has over recent years been the most important trading partner – I don’t know kind of where it stands with China at the moment, but it sort of been there or thereabouts in terms of the most important trading partner. Technology I think would be the second thing that I would point to. Again, as I said before, not as easy as the United States because it doesn’t have the hyperscalers like Google or big AI companies, which everyone wants a piece of. But it has a lot of underlying technology in terms of manufacturing industrial technology, pharmaceuticals, deep tech in the sense of the research base in the large European universities. So it’s a little bit more difficult to kind of get out of European companies, but it does exist and that’s very valuable for developing economies in South and Southeast Asia. And then I think there’s a bunch of other stuff which is newer, as I say, defense and security partnerships, not just at the level of the larger nation states, but also at the Brussels level as you saw with the defense and security pact that was done between the European Union and India.

Supply chains and economic security is a big concern of Europe. And so I mean that’s an agenda that’s being more fleshed out with respect to India where both sides have big concerns about China. It’s maybe less advanced with Southeast Asia where countries in Southeast Asia view China as a more kind of balanced proposition as opposed to more of a competitor, which I think is true in both Europe and India. And maybe the sort of green tech transition would be another. So I think there’s a lot of areas of kind of common interest. And the point I would go back to making is that particularly on kind of defense and security in the sense of hard security, but also economic security, the potential partnerships in areas like critical raw materials or supply chains are reasonably new. I mean, it wasn’t something that we were talking about pre-COVID and in a sense, the way that China has changed over recent years and to some degree the way the US has now changed. And so I think Europe has things to offer on all of those. It’s not the perfect partner, but then nobody is, you know? So in a sense out there in the world of trying to find people with whom you can diversify, you have to take the countries as they are. And that, as I say, it’s a reasonably small series of buckets of sort of East Asian democracies, Middle Eastern sort of oil emirates, and Europeans are kind of your big plays if you’re sitting in South or Southeast Asia, I think.

WHAT TO WATCH INTO 2027: PRIORITIES AND AREAS OF COOPERATION

ASEAN Wonk: If we look at some of the future-looking agenda items for Europe and Southeast Asia, there’s an EU upgrade planned already by 2027. And so some of the areas you mentioned in terms of the green economy, the digital economy and supply chains are conversations that are already occurring. One of the striking things is around this concept of economic security, which as both you and I know there are debates around but where we are seeing quite a few developments, including the EU’s own economic security strategy released last December. What are the areas you’re looking at particularly as we head into the rest of this year and into 2027 in particular?

James Crabtree: So the…

[Note: This is the end of a free preview podcast, with the full version in an earlier post published on February 19, 2026 available to our paying subscribers. This is not meant to serve as new content and is part of our free preview content within the dedicated website podcast section].

Our guest today is Matthew Goodman, who previously worked on preparations for G-20, APEC and the East Asia Summit at the National Security Council and held various roles in government, think tanks, as well as the private sector. We’ll start our conversation talking about a number of geoeconomic developments, including US tariff deals and the regional economic agenda. Be sure to stay tuned as we go through a range of forthcoming developments as well into 2026, including on China’s hosting of APEC in 2026 and the U.S. hosting of G-20.

To receive full ASEAN Wonk posts and support our work, consider a paid subscription for $5 a month/$50 a year through the button below. For more on pricing for institutions, groups and discounted categories, visit this page.

Note: The transcript that follows the above free clip preview has been lightly edited for clarity and organized into sections for ease of quick browsing. For all ASEAN Wonk Podcast episodes, full video and audio podcasts, along with edited and sectioned transcripts as well as block quotes, will be a premium product for our paying subscribers, but we will include a short free transcript preview and a clip for all readers to maintain accessibility. Paying subscribers can find the rest of the full transcript and the full video podcast right below the paywall. If you have not already, do consider subscribing, and, if you have already done so and like what you see and hear, do consider forwarding this to others as well who may be interested. Thank you for your support as always!

2026 TRADE DEAL FUTURES AND INDO-PACIFIC IMPLICATIONS

ASEAN Wonk: Welcome to the podcast, Matt, and let’s start with the elephant in the room which is U.S. tariff policy and the deals we’ve seen. We’ve seen some of the details publicized in terms of frameworks or statements for countries like Malaysia and Cambodia, but we also have ongoing Supreme Court decisions and proceedings that are coming out within the US as well. And the administration I understand has lined up a Plan B of sorts with various section authorities depending on where this goes. What do you think are the various scenarios that policymakers and observers should be thinking about headed into 2026?

Matt Goodman: Thanks Prashanth. It’s great to be here and happy to talk about these rapidly moving issues. So the first caveat I’m going to say is that it’s really hard to analyze this stuff, let alone predict it. Because that’s sort of a hallmark of the Trump approach, especially in his second term of being kind of maybe deliberately unpredictable and uncertain in his approach. And we’ll talk about this probably some more without a really coherent strategy. So this is really a question of pattern recognition as opposed to real policy analysis. I think that’s what you have to bring to these kinds of kinds of conversations.

And I would say that we now know that President Trump 2.0 is obsessed and focused singularly on issues around trade and tariffs. He’s been doing a frantic set of actions to put tariffs on here or tariffs on there on sectors, on countries, and using that to some extent as leverage to negotiate all these deals. And these deals have some interesting components, which we can talk about. But I think one of the things you touched on is, there’s a lot of uncertainty around them and how real they are and how much they’re actually going be implemented the way they’re written – to the extent they are written because some of them are not written down. And so this is just a pattern of behavior and action that is fast moving, uncertain, and really different from some of the more predictable things we’ve seen in the past in Washington, including Trump 1.0 where it was a little more predictable.

ECONOMIC STATECRAFT & EVOLVING INDO-PACIFIC STAKES

ASEAN Wonk: Right. And just to follow-up quickly on that in terms of how this fits into the broader notion of U. S. economic statecraft. In some of these agreements, we’re seeing things like purchases of certain U. S. goods, products and services, whether it’s LNG or aircraft. But there are other provisions that are more strategic about digital taxes and policies against U. S. companies, and provisions about the implications if countries negotiate agreements with others. One regional official I spoke to jokingly characterized this as unfriendly shoring, relative to friendshoring, allied shoring and nearshoring that we heard about from previous administrations. I guess the broader question from all of this is how this factors into broader U.S. policy beyond just President Trump, given that there’s work and thinking going into these agreements from the people and bureaucracies around him.

Matt Goodman: Yeah. A really good set of questions. First of all, one point I often make is that there’s Donald Trump and then there’s the Trump administration. I mean, those are really, in a way, two different things. There is always the president’s view which has been important in administrations. But in this case, he’s got a unique perspective and unique set of interests and priorities. He has unusual power over his own administration and broadly over Washington. And so when you look at what he’s interested in and doing, you have to somewhat maybe distinguish that from what the Trump administration is doing. And, I think, in descending order, what Donald Trump cares about is the big announcement, the ability to sort of say I’ve done some big deal that I’m sort of a big deal maker, and I’ve made some announcement that I can tweet or post at 2am with capital letters. That’s kind of what you start with. I think to the extent he’s really concerned about policy, he clearly doesn’t like trade imbalances and wants to try to use his superpower of tariffs to bring those down. And then there is this sort of reindustrialization and reshoring and trying to rebuild a kind of manufacturing capability here in the United States that for a variety of reasons has decreased or diminished over his lifetime. And he wants to go back to an era where we were producing more stuff. And so that’s a real significant policy point.

What’s not on my list there is some of the things that have now appeared, and this is where I am interested in the differences between Trump himself and his administration. Like in the US-Malaysia trade deal, there’s some new interesting provisions there. Ones that I am particularly interested in are the ones that sort of touch on economic security as it were, where Malaysia has ostensibly agreed to align some of its policies – maybe tariff policies, export policies, other policies with the US. And as you alluded to, to make commitments, frankly, not to do things with China that upset the US or hurt the US – it explicitly says that somehow jeopardize essential US interests, whatever that exactly means. All of that is interesting and new in trade agreements. Generally, it’s a sign that more of those kinds of issues of trying to get alignment on dealing with China is going to be a part of US policy going forward. I mean, it’s been a part of successive administrations on some level, but I think that’s an interesting thing to watch.

“All of that is interesting and new in trade agreements. Generally, it’s a sign that more of those kinds of issues of trying to get alignment on dealing with China is going to be a part of US policy going forward.”

And then it gets to the question that the point that I made at the beginning of this long response is that Donald Trump doesn’t seem so interested in those issues. I mean, he’s interested in doing more commercial deals and getting the big announcement, maybe in pulling in some investment here to the US. But he doesn’t seem as interested in his economic security issues. So it raises in my mind: is this his team? Has he enabled them to move forward with some of this stuff? Jamieson Greer, the trade representative, negotiated that deal, and he may be more concerned about these sorts of economic security and China related issues. And they probably have some sort of blanket blessing from Trump to go ahead with these kinds of provisions. Not that he cared about the detail, but because he’s in a kind of a push me, pull you sort of situation with China and Xi Jinping. And he wants to show that we’re being tough. And when China’s threatening us on rare earths, that we can do other things to get at them. So at least for now, Trump is endorsing the idea of moving forward with some of these efforts to align allies and partners like Malaysia, which, by the way, the US has had not easy relations with over many years on many issues. So it’s interesting that Malaysia went so far to respond on some of these issues. But I think it’s an interesting question to watch as to whether this is a very different sort of approach from the administration broadly and from what Trump himself is actually really concerned about and prioritize, which gets to: post-Trump, will some of this stuff continue or not? And I think it will is the bottom line. Not every detail, but a lot of this impulse is going to continue post-Trump.

EVOLVING REGIONAL ECONOMIC AGENDA AND APEC

ASEAN Wonk: Right. I wanted to turn to some of the outcomes we saw out of APEC from South Korea’s host year. We saw an adoption of a declaration, which doesn’t always happen, so we should acknowledge that. We also saw some outcomes in areas like demographics and artificial intelligence, which are important if you’re looking at geoeconomics in a region like Asia long term, where some of the countries, including in Southeast Asia like Thailand, have actually already begun to age. As somebody who has thought about APEC as a practitioner and then as a scholar as well, how would you assess the outcomes from this round of APEC, whether it’s a grade or a scale of one to ten, however you want to assess it?

Matt Goodman: Great. Well, first of all, let me just say that it’s wonderful to be in a conversation where you don’t actually have to spell out what APEC stands for. Here in Washington are probably five people who know what those initials A-P-E-C stand for. I’m one of them because I think APEC is important. It’s not everybody’s cup of tea, but I think it is an important part of the landscape in the region; an important tool of US policy in the region if we use it right. So I actually pay more attention to APEC than most people do. I would say the outcome in Korea was not bad. I mean, considering that you had to go into this with pretty low expectations. I’m sure the Koreans did in some way as hosts. They were probably trying to avoid any major disruption. And if they got that, which they did, then they’d consider that a victory. You’re right. They got to a communique, which is not something that always happens at these events, and that’s significant. It’s less than three pages, which is a real accomplishment in itself.

And it does have some useful issues that set agendas. I always think these forums – the G-20, APEC, all of these big and multilateral forums – really serve broadly three purposes. They solve problems and really try to move an agenda forward on specific solutions – in the extreme, in a crisis like the G-20 was formed in. So it’s a problem-solving body. Secondly, even if it doesn’t solve problems immediately, it’s an agenda setting opportunity. So you alluded to aging, and that’s a good example. Korea has the worst demographic posture of any country in Asia or the world maybe with such a low fertility rate and an aging society, but every country is facing this on some level. Korea really put that front and center on the agenda. That’s important by itself.

People can be cynical about that because they say there weren’t any tangible agreements to do anything or to make more babies or whatever it is that you’re expecting to be done. But putting it on the agenda and then forcing conversations among bureaucracies within bureaucracies about how do we actually put some meat on the bones of these sorts of leader level objectives I think is important. So I give the Koreans credit for that. And then there’s the building habits of cooperation point in these forums where you get leaders together. Now, admittedly, President Trump didn’t stick around for the actual APEC meeting, but it was an excuse for him to get out there and have a bunch of important bilateral meetings, which broadly, I think, went pretty well, all things considered.

“So you alluded to aging, and that’s a good example. Korea has the worst demographic posture of any country in Asia or the world maybe with such a low fertility rate and an aging society, but every country’s facing this on some level. Korea really put that front and center on the agenda. That that’s important by itself.”

And so people often understate this purpose of these forums. But remember, leaders are kind of lonely people. They don’t have a lot of peers. They spend all day with a bunch of supplicants and people who want things from them or staffers, but they don’t really talk to their peers a whole lot. So these are real opportunities for them to get together, compare notes, tell each other what’s really important to them. And so I think the Korea APEC sessions helped to do that, and so I give the Koreans credit for that as well. And I think it’s a good thing that APEC made it through this year, and then we’ll see how it continues next year under Chinese leadership. And it’s always a little bit of a fragile undertaking: you’re never quite sure if it’s going to make it to the next level or next year. But I think it was a pretty good outcome for APEC in Korea.

MULTILATERAL INSTITUTIONS: EXPECTATIONS AND REALITY

ASEAN Wonk: Just to broaden it out a little bit, I’m also wondering – to your point about multilateralism in general and multilateral institutions – to what extent should we be recalibrating our expectations for what their role is in this environment of increasing geopolitical competition? Because the challenges you noted with APEC and other institutions like the G-20 are profound and even getting some of these outcome documents almost taken for granted a few years ago may actually be more prized now in this environment.

Matt Goodman: Yeah. Multilateralism is not fashionable certainly here in Washington these days. And more than that, Donald Trump and his administration are pretty hostile to even the term or the concept multilateralism. They want the US to be able to make its own decisions, not have to sit down and compromise and spend time talking to a bunch of other countries and kind of find the lowest common denominator. So there’s a pretty antagonistic view of multilateralism here in Washington. And other countries as well, I think, have found that it hasn’t delivered in the way that it was originally envisaged. I mean, take the World Trade Organization, which has not really been able to perform on any of its core functions of negotiating new trade liberalization or enforcing deals or even surveillance, which is the weakest of its functions. And a lot of countries recognize that. And that’s not all the US’ fault. In fact, we’re part of the problem, but we’re not the only ones that have made WTO less functional than it was envisaged originally.

I do think the G-20 has really suffered from not having real consensus – the kind of consensus that was there in 2008-2009 in the middle of a crisis when the US, China, others came together and did some pretty dramatic things to stabilize the global economy and the global financial system. All of that’s gone, and now there’s competition within the group. But the challenges remain. The global economy is still fragile. The financial system could be in trouble. It has many problems. We have climate change. We have pandemics. We have many other transnational challenges that require some kind of international conversation. And I think that’s what keeps people coming to the table, including the United States. I mean, it’s interesting that the Trump administration in fact – I am not sure why this is the case – has not withdrawn from the WTO or tried to kill it. We didn’t in the first term, and this is now the fifth year that Trump has had the opportunity to walk away from the WTO, and he hasn’t. And I’m interested in why. Apparently, we paid our dues, which I didn’t even hear about until just recently quietly. And so we’re still interested in the WTO as useful in some way to do something.

“I do think the G-20 has really suffered from not having real consensus – the kind of consensus that was there in 2008-2009 in the middle of a crisis when the US, China, others came together and did some pretty dramatic things to stabilize the global economy and the global financial system. All of that’s gone, and now there’s competition within the group.”

And the IMF and the World Bank similarly. Treasury Secretary Bessent has talked about them as useful institutions – maybe misguided or overbloated or whatever. He wants to reform them, but he hasn’t walked away from it. So in practice, I think even in Washington, let alone in other capitals, there’s still this impulse just because of the reality of the way the world works. There are problems and challenges that no one country suffers alone and no one country can solve alone. And so, you kind of have to get together in some way even if you don’t like the term multilateralism or you don’t like some of the commitments that you’re obliged to follow through on under the WTO or whatever. So I think it’s an interesting question of where all of this goes, and that’s a long conversation we can have if you’re interested. But I do think there’s sort of crosscurrents here over some of these multilateral forums. They’re definitely troubled and have a hard time making the case for their relevance and getting people to the table, but there’s still an impulse to because of the reality of global challenges to come to the table. So that’s an opportunity.

LOOKING AHEAD TO CHINA APEC 2026 AND COMPETITION FUTURES

ASEAN Wonk: Great. And looking ahead, one of the data points that people are already starting to look ahead to is that China is going to be the host country for APEC next year. That’s going to be followed by Vietnam the following year. Xi Jinping’s speech at APEC included all kinds of references to what has become quite customary for Chinese officials to refer to, like avoiding the law of the jungle and so on and so forth after the second Trump administration to almost a oneupmanship relative to the United States and trying to position themselves as the bastion of free trade even though China has its own challenges as well on that front. But it feeds into some of the anxieties about how China might utilize APEC during its host year. To what extent is this going to be about some of what you mentioned – agenda setting, broader challenges – and to what extent is this going to be more about a bilateralized notion of U.S.-China competition and APEC being a battleground for that?

Matt Goodman: Well…

[Note: This is the end of a free preview podcast, with the full version in an earlier post published on December 23, 2025 available to our paying subscribers. This is not meant to serve as new content and is part of our free preview content within the dedicated website podcast section].

Our guest today is Datuk Siobhan Das, who is the CEO of the American Malaysian Chamber of Commerce (AMCHAM Malaysia) based in Malaysia. We’ll start our conversation talking through some recent developments, including the wider implications of the new U.S.-Malaysia agreement on reciprocal trade and the Malaysia ASEAN chairmanship. Stay tuned as we go through a number of other forthcoming developments, including geoeconomic challenges posed by US-China competition and prospects for Southeast Asia’s economic story.

To receive full ASEAN Wonk posts and support our work, consider a paid subscription for $5 a month/$50 a year through the button below. For more on pricing for institutions, groups and discounted categories, visit this page.

Note: The transcript that follows the above free clip preview has been lightly edited for clarity and organized into sections for ease of quick browsing. For all ASEAN Wonk Podcast episodes, full video and audio podcasts, along with edited and sectioned transcripts as well as block quotes, will be a premium product for our paying subscribers, but we will include a short free transcript preview and a clip for all readers to maintain accessibility. Paying subscribers can find the rest of the full transcript and the full video podcast right below the paywall. If you have not already, do consider subscribing, and, if you have already done so and like what you see and hear, do consider forwarding this to others as well who may be interested. Thank you for your support as always!

NEW TRUMP DEALS IN PERSPECTIVE

ASEAN Wonk: So welcome to the podcast Siobhan, and let’s start with the elephant in the room which is the US-Malaysia trade deal. We’ve heard pockets of domestic criticism on sovereignty and so on. My understanding talking to officials is that they went into this with eyes wide open, and they had to weigh these considerations against the fact that this was a U.S. administration that was taking a pretty tough line on these issues. There was also a preference for Malaysia being a first mover relatively speaking, leveraging the ASEAN Summit and the fact that President Trump was going to be in Malaysia. And also getting past this notion that Malaysia was being left behind in some of the big strategic decisions in US policy and being a trusted partner in some of these key sectors. I’m interested to hear your thoughts. And also, more broadly, what does this mean for companies? There’s a lot of talk about challenges, but what does it mean in terms of the opportunities for companies that are looking at this U.S.-Malaysia relationship more broadly?

Datuk Siobhan Das: Thank you very much for having me on and for asking AMCHAM to come and talk on this, Prashanth. Great to see you again as well. You know, this is a really interesting time, and you’re right on all the things that you said there. It was a very interesting negotiation. It’s not your typical FTA. It came to being because of the tariffs that the Trump administration was putting on across the globe. It’s not just Malaysia. It’s right across the globe, and everybody is impacted. And I think everybody was trying to figure out what is it that we needed to do to be able to still engage with the United States. The United States is the world’s largest consumer market. It is one of the trading partners for a number of different countries and an important trading partner.

And Malaysia is no different. Significant trading partner for Malaysia. I think it’s the number two trading partner, and the US is the number one investor in Malaysia. So this was a critical agreement to be able to come to. And there’s a lot of US businesses that have landed in Malaysia over the last fifty years. We represent a host of those, and we’ve seen that grow over the last fifty years. A very significant number of them are in the semiconductor field. So it was very important for Malaysia to understand what that market was to its economy. And I think you’re absolutely right. I think Malaysia did take a very pragmatic and very practical look at what they needed to do to maintain that market. This is not to the exclusion of any other market, but it’s with the significance that the American market has to its actual driver of its own economy. it had to really think about it and say: okay – what is it that we need to do to preserve the drivers of our economy? The goals that we’ve already set through in the NIMP – the New Industrial Master Plan – and how do we achieve those goals? If we don’t make this deal, you know, how does that set back our own growth? How does it set back what we want to achieve as a country in terms of moving up the value chain, in terms of quality jobs for our people? So I think the country needed to look at how does this agreement shape what our future is.

“If we don’t make this deal, you know, how does that set back our own growth? How does it set back what we want to achieve as a country in terms of moving up the value chain, in terms of quality jobs for our people? So I think the country needed to look at how does this agreement shape what our future is.”

But, again, this is not to the exclusion of any other country, because I think Malaysia rightfully so has to diversify its markets. It’s matured enough over the years to be a leader and an innovative leader in the region, and it is going out slowly into different markets. And I think that’s great to see, and we’re all excited that a lot of the investments that are coming into Malaysia are actually using Malaysia as a base to leapfrog or enter different markets that Malaysia provides. I think Malaysia has nine FTAs, and that provides a very attractive base for a lot of U.S. companies to come to Malaysia. So I think the opportunity to get this right was really powering behind what the negotiators were looking for to try and find a deal that could balance what they need to move forward with. So I think the approach by MITI (Ministry of Investment and Trade) was correct to look at that balance.

NEW UPGRADE AND INTRAREGIONAL COMPETITION IN SOUTHEAST ASIA

ASEAN Wonk: One of the other aspects that I think was a little missed amid the focus on the trade aspect was the fact that we also technically had an elevation of the US Malaysia relationship to the level of a comprehensive strategic partnership. That’s the first upgrade that we’ve seen for a Southeast Asian country under the second Trump administration. Skeptics thought the relationship was not doing well in terms of the optics particularly if you look at the start of the Gaza war. So the fact that Malaysia has been able to get to an upgrade is a bit of a missed point. I think you’ve talked about this publicly that the intraregional competition in Southeast Asia for investments has actually been increasing over the past few years, and for Malaysia to get on the map and stay on the map in terms of the United States and the investment landscape, it also needs to do a bit more. Do you think that this upgrade also does help Malaysia position itself a little bit more on the map?

Datuk Siobhan Das: I think there’s a lot that’s happened in the last few months that has raised Malaysia’s profile. I think also there’s been a lot of understatement about the role that Malaysia has played. I think we just haven’t given it the recognition that it actually exists. I think this is where the strength is. There is a there there: I think that the both sides were at pains to really understand what was valuable in the relationship. And I think when they actually studied what was there, they came to the conclusion that, yes, there’s still work to be done, but, fundamentally, there is a level of trust and compliance that can be worked on and upgraded. And I think that’s where the relationship is pointing towards. Malaysia has the potential and is already a trusted partner. It’s got the rules and regulations and it has proven ability to play to global rules, to play to the needs of a monitored environment. It has all the foundations there, and it’s playing within those rules.

So I think it’s really establishing the trust and we’re making it more visible that there is that relationship. Whether it is – and this is not an area that we get into – but the security relationship between the US Malaysia is quite strong, but the commercial relationship and the strength of that commercial relationship with the commercial law that’s in place, the strength of the IP laws. Yes. Like I said, I’m not going to say that it’s perfect, but there’s work to be done. We can improve the transparency. We can improve our traceability. And I think that’s what the relationships and the acts and agreements that have come to place will support. And I think that’s what people are excited about in the sense that: okay, we have now clarity. Businesses now know, okay: we’re at nineteen percent on certain things, but they’re in various sectors that are important to the relationship. Those sectors have been given a different level of tariffs that can keep it competitive for U.S. business. Because a lot of that Malaysian business that does go back to the United States is important to the U.S. value chain. A lot of the businesses that are based here also supply the rest of the world. So, you know, that one is less of a concern. But nonetheless, once you’re complying to the United States’ needs, you’re going to be compliant to a lot of the international standards as well.

But this is nothing new. Malaysia’s already been doing this. It’s already compliant. It’s already shown its ability to be in that global value chain. And it’s not been looked at and regarded as an emerging market or a third world market. The US businesses that are here use and look at operations that are based here as first world. And once they’re qualified, once a Malaysian organization or a company is qualified to work with a US company, you’re qualified globally. So this is the strength of what Malaysian companies can actually do. And I think this is really important because what the agreements do is elevate Malaysian companies to be able to get plugged into the US ecosystem. And by doing that, they become globally recognized as well. So they become much more competitive, not just in the region, not just to the United States, but also globally. And I think that’s where the true value is for not just US companies, but anybody plugged into that ecosystem. And therefore, it gives the opportunity for a Malaysian company to decide whether or not the United States is a marketplace it wants to go to. And if it’s excited about it, then there’s a pathway. This is what you need to do. If it doesn’t want to play in that marketplace, then that’s a choice it has to have. But without these agreements, Malaysia may or may not have had that choice. So I think this is really an opportunity for Malaysian companies to make some really interesting decisions about how they want to innovate, how they want to grow.

GEOCONOMIC IMPLICATIONS OF ASEAN SECTORAL AGREEMENTS AND MALAYSIA’S ASEAN CHAIRMANSHIP YEAR

ASEAN Wonk: Just zooming out a little bit, Malaysia also just chaired ASEAN this year. And there’s a whole host of geoeconomic areas there that I know businesses are looking at more generally with respect to the region and globally. Artificial intelligence. The Digital Economy Framework Agreement pushed it out to next year. The ASEAN Power Grid. What are some of the sectors that you see as areas of greatest opportunities for business, not just regionally, but also, places where Malaysia can contribute as a country that has played a really important role in some of these areas like semiconductors? And during the pandemic actually is when perhaps US consumers actually became more aware of that role that Malaysia plays in the semiconductor supply chain.

Datuk Siobhan Das: Absolutely. The semiconductor trade is absolutely vital, and I think this is something that Malaysia can play and does play a really important role with the number of exports. I think the number is that ten percent or eleven percent of all electronics passes through Malaysia in some way, shape, or form. And so it was very important for Malaysia to retain this position. And not just as an assembly test because it is moving up the value chain, and we’re getting innovation here. There is design happening here. So it just gives us security in the fact that there is a marketplace. And so SMEs and even companies wanting to come here can dedicate that investment to be able to reach that marketplace. So I think semiconductors is going play a vital role going forward.

“I think the number is that ten percent or eleven percent of all electronics passes through Malaysia in some way, shape, or form. And so it was very important for Malaysia to retain this position.”

But flowing on from that, these are other sectors that are going to grow. We’re already seeing growth and commitment by medical devices, medical technology that are building up on top of this semiconductor base that has been matured over fifty years. So you’re seeing that come. And when medical devices come, there’s so many rules and regulations and permits that they have to get here. Once it’s in Malaysia, you’re unlikely to see them leave very quickly because it’s hard to get in and want to see it. And if Malaysia can be the fifth global hub for medical devices, this would be a really important thing for Malaysia, not just for the US trade, but also regionally. And I think that’s a really important sector we need to be looking at in medical technology and medical devices. But also in addition, aerospace. And I think aerospace, there is a huge opportunity here, not just in parts, but also in development in different areas. So, of course, the MRO (maintenance, repair and overhaul) development here is very important to have.

But also, you’ve got companies that are actually innovating and finding homes in the ecosystem in Malaysia, which also can then tap into the ASEAN framework that is there so we can make sure that the inputs are coming from ASEAN, that we can build the hub that ASEAN that can provide. And I think that’s what’s exciting about what happened at ASEAN. This work on interoperability, this work on regionalization, and how do we use the interconnectivity within ASEAN with Thailand, Vietnam, Indonesia, Singapore. How do we all work together? And I think that’s what’s really important. I’m really glad that in Malaysia’s chairmanship, they really pushed a lot of the interoperability and the regionality. And I think that’s what’s going to really drive not just Malaysia, but the whole ASEAN coming together and providing opportunities for the rest of the lesser developed ASEAN countries to come into the framework.

And then with the digital agreement, as you said, we’ve got a little bit more ways to go. But there’s a lot of commitment towards that. And I think that’s something we’re making great progress on, and once we can get better data flows, making sure that we have a trusted network across the region, this is all going to play and make sure that ASEAN grows harmoniously and together. So, yes, it’s going to be, you know, you’ve got Singapore and Timor Leste at the extremes, but everybody else in between can actually start to say, well, you know, how do I plug in and look towards that plug in? And I think that’s what’s really important is how do we build together. And, of course, you’re going to have interregional competition. Everybody’s going to want to have a little to get ahead of each other, and there’s nothing wrong with that you know? Competition always is a driver of innovation. We’re looking forward to it. And I think Malaysia should try to strive and move forward, but also how do we look at areas and how do we plug into each other as well.

CHALLENGES TO REALIZING NEW GEOECONOMIC OPPORTUNITIES

ASEAN Wonk: In some of these conversations – on supply chains, for example – it’s often forgotten that governments can shape some of these conversations on supply chain movements and such, but, ultimately, it’s going to be the businesses that actually have to do the moving. To that point, you talked about some of the opportunities and the sectors there. But from a business perspective, what are some of the top challenges that you see to some of these opportunities in Malaysia as well as regionally and globally that businesses are facing that might be a little bit underappreciated from those that look primarily at geopolitics or at governments?

Datuk Siobhan Das: Well, if you take geopolitics and government aside and you start looking at what’s really driving business growth, cost is always going to be king. But it’s not always the main reason why people choose a location. If you look at the risk map, they outweigh a lot of the different aspects. So access to energy. Access to energy is absolutely critical right now. So if and when the ASEAN Power Grid can come into being, this is going to give ASEAN a much, much better focus on the what it can deliver. So power, access to power, access to renewable energy. So these are really, really important things. Your customer is going to be looking for renewables. How are you going to deliver that? That doesn’t mean that you’re not going be using traditional forms. It’s how do you plug in renewables?

You’re also going to be looking at supply chains in this world right now. Where’s the tariff? What are the limitations of the tariff? I don’t think anybody’s leaving countries, but which lines of my product are going to be best suited to be closer to customer? And closer to customer doesn’t necessarily mean close to the United States. It could mean my customer is in Asia, so therefore, I need to be in Asia. So these are all decisions that businesses need to make. Also, inputs. Cost of transporting inputs is going up, you know? You cannot just rely on ships or air traffic sending you those inputs. So if you can develop your local ecosystem, then your costs are going to be managed. So can you develop local inputs? And I think this is where ASEAN has a real opportunity to develop its ability and its SMEs can get into developing key inputs and being able to have a regional supply chain. And I think this is something that’s a promise.

Malaysia has increasingly got a fantastic robust ecosystem that is increasingly being able to provide inputs to the US supply chain and the Western supply chain, and it should be encouraged to do more. And I think the Malaysian government is encouraging its SMEs and its Malaysian businesses to look at how do we plug in to innovate so that it could actually supply into those ecosystems and be part of the trading mechanism. So I think this is the Malaysian government saying: how do we support our SMEs? How do we help them gain access to finance? How do we get them access to capacity building and capability growth? And I think with all the regional work that’s been done in ASEAN in individual countries themselves and supporting SMEs and with the ART (Agreement on Reciprocal Trade) as well. Access to finance, access to knowledge of the secure market that is there will give businesses confidence that they can now spend money on training, spend money on investing in new equipment, spend money on innovation and design so that they can be part of that and not just rely on being a minor input, but actually be part of the innovative cycle. Working with regional teams. Being able to develop regional teams working with the Thais, working with the Vietnamese or even the Philippines or in India or anywhere else so you can develop that knowledge.

And I think that’s what’s really interesting. The more businesses can see, okay, this is what’s happening and those supply chain movements, they are going to be kind of like, okay: how do we shorten and strengthen them? But of course, are they going to move? Supply chains move all the time. They move more than you think, but it’s a cost. It costs to move supply chains. And I think one of the things that we need to be very aware of is the role of people and talent mobility, and how do we increase the ability for people to move so that you can actually share that knowledge, to be able to bring that knowledge across the board and vice versa. There are centers of excellence across Asia that the United States, that you know, maybe the Europeans may need. So how do we showcase what innovation’s been done here and how do we spread it across the world and vice versa? So talent mobility is going to be absolutely critical. And I think this is something we would like to see how we can impress on businesses; how do we make that easier.

So there’s lots of challenges. Supply chain is exciting, but we need to be able to keep an eye on what really is core to us and core to the businesses. And each business is going to have a different business model. There’s no one size fits all. So governments need to be able to be adaptive enough to understand that each company has a different business model. You cannot use one paintbrush and paint the one patina across and say the industry behaves this way. It doesn’t. Everybody has a different business model.

BEYOND TRUMP TRADE DEALS AND CHOICES: US-CHINA GEOECONOMIC COMPETITION AND HOW BUSINESSES ARE NAVIGATING IT

ASEAN Wonk: Right. To the point that you raised earlier as well about the calibration that these countries have to make when they’re sort of managing relationships with different powers. So if you’ve got a relationship with the United States and you’ve got one with China, how do you manage that? One of the things the trade agreement has gotten focus on is some of the provisions for example that focus on if you’re doing x, y, and z with another country, that might affect how the United States is going to treat you in certain areas. I’m wondering if we could zoom out a little bit from the Malaysia case and look at some of the geoeconomic impacts of US-China competition and the pressures that they’re exerting on different governments and how they’re thinking about the choices that they’re making. What are the downstream implications of that for businesses and how they’re thinking about the choices that they’re making, not just today, but five years, ten years, fifteen years down the line?

Datuk Siobhan Das: Okay…

Our guest today is Dr. Vannarith Chheang, who is speaking in his personal capacity and has a variety of affiliations, including as chairman of the advisory council for Cambodia’s National Assembly and Angkor Social Innovation Park. He has nearly two decades of experience serving in various roles including as a consultant for the Asian Development Bank and the UN. We’ll start our conversation talking through contemporary developments, including scam centers and the Thailand-Cambodia border war. Stay tuned as we talk through a range of other subjects, including ASEAN; Cambodia’s strategies as a small state amid U.S.-China competition; and what to expect in foreign policy into 2026.

To receive full ASEAN Wonk posts and support our work, consider a paid subscription for $5 a month/$50 a year through the button below. For more on pricing for institutions, groups and discounted categories, visit this page.

Our guest today is Brigadier General David Stilwell, who served as assistant secretary of state for the bureau of East Asian and Pacific Affairs under the first Trump administration after a series of other roles as well, including as defense attaché to China and as part of the US Air Force where he started his career back in 1980. We'll start our conversation talking through a number of contemporary developments, including the Trump administration's approach to Southeast Asia and country perspectives on not being forced to choose between China and the United States. Be sure to stay tuned as we go through a range of other subjects, including the future trajectory of US China relations and Washington's approach to flashpoints such as Taiwan and the South China Sea.

To receive full ASEAN Wonk posts and support our work, consider a paid subscription for $5 a month/$50 a year through the button below. For more on pricing for institutions, groups and discounted categories, visit this page.

Note: The transcript that follows the above free clip preview has been lightly edited for clarity and organized into sections for ease of quick browsing. For all ASEAN Wonk Podcast episodes, full video and audio podcasts, along with edited and sectioned transcripts as well as block quotes, will be a premium product for our paying subscribers, but we will include a short free transcript preview and a clip for all readers to maintain accessibility. Paying subscribers can find the rest of the full transcript and the full video podcast right below the paywall. If you have not already, do consider subscribing, and, if you have already done so and like what you see and hear, do consider forwarding this to others as well who may be interested. Thank you for your support as always!

TRUMP II VS TRUMP I POLICY CONTEXTS

ASEAN Wonk: So welcome to the podcast, General Stilwell. I wanted to start, given your experience serving in the first Trump administration, with where you see continuities and changes in Trump I vs. Trump II. Talking to policymakers in the region, there's a sense that in the second Trump administration we're seeing the obvious headline makers like the hardening of tariff policy, some continuity on issues like scam centers, for example, and there's also a category of maybe a little bit too early to say definitively on where we're heading on issues like China policy as we build up to leader-to-leader interactions there. You travel extensively in the region and we've actually been in a few engagements as well over the past year in Southeast Asia. What's your sense of how things are looking on the Asia policy front in Washington, as well as the regional perceptions and responses to that?

General Stilwell: Well, thanks for having me here. And, hopefully, my perspective adds to the conversation and doesn't detract too much. But the focus has been on great powers, big economies like China, and then from there, Northeast Asia, primarily Japan. We can talk about that later, the over under on that. So Southeast Asia, in general, I think has gotten a pretty good treatment on this. The agreement with Vietnam came across fairly quietly without a lot of drama, which says there's interest in shifting markets and development and production centers away from one main aggressive and adversarial center and shifting it to countries that have lower labor costs and have many other advantages that that the PRC has since lost. So I can't speak to all, but I do know that I was fairly happy with how the agreement with Vietnam came out, and we're going to focus primarily on economic sense.

Unlike Trump I, where the action areas were the Defense Department and the State Department, it really seems like there's been a shift away from that more toward Commerce, Treasury and USTR. No criticism there. If you're looking at national debt now at $37.5 trillion dollars, you’ve got to do something to get that under control. And if you do that by pumping up the economy, moving industry back to the US, all the things that we're hearing about, that's a reasonable approach. I would just say it can't come at the cost of those other traditional security centers like Defense and State.

“Unlike Trump I, where the action areas were the Defense Department and the State Department, it really seems like there's been a shift away from that more toward Commerce, Treasury and USTR.”

PLURALISM AND COMPETITION IN US SOUTHEAST ASIA POLICY

ASEAN Wonk: The other aspect I wanted to zoom in a bit on is what we've been hearing since actually a few years ago publicly from Southeast Asian officials about not being forced to choose between the United States and China. My own sense has long been that this is more about the choices that these countries actually make for themselves and how they make them, rather than anything that's imposed by Washington or other countries. And sometimes, as we both know, choices are being made more for shorter-term regime interests, which are not necessarily the same as longer term national interests. You’ve spent a lot of time thinking through the issue of choices. I recall when you were Assistant Secretary, you tried to emphasize the fact that under the first Trump administration, just because there was a greater focus on sovereignty didn't mean that there wasn't room for pluralism and notions of multipolarity.

At the same time, you fast forward a few years to the present, you know, just a few weeks ago we saw China with its Shanghai Cooperation Organization summitry in Tianjin promote more aggressively its own notion of what a world order should look like, and the Global Governance Initiative was rolled out. How much room do you think there is for this kind of pluralism and coexistence of worldviews as these views are competing increasingly between the United States and China and other capitals are adjusting their own approaches to this as well?

General Stilwell: I actually I love the idea of pluralism. We took some heat over that presentation at Brookings when we gave it in 2019. The mighty David Feith wrote that speech. He wrote it at the last minute because he just had this change of heart. And the folks at Brookings were surprised that we went down that path, but think about it. That was my experience everywhere I went is people were very happy when American diplomats did not show up with a non-pluralistic agenda saying, my way or the highway, you're going to do human rights, you're going to do all these things that we demand of you.

I grew up as a fighter pilot, and we're a fairly direct bunch. We don't use a lot of diplomatic language. And one of the first things you learn is you've got two ears and one mouth, and you should use them in those proportions. Well, I suggest our diplomats consider that because I oftentimes would follow one of my colleagues into a capital, and they had just gotten wire brushed and the finger wagged in their face about doing things that were culturally the norm for them. So, one, we have to stop preaching at folks. We need to listen to what they have to say. If we want to guide them; if we want to see change in how things are going, if there's human rights practice, we gently guide them into that without trying to force them. And so it starts off with diplomacy. And we should be teaching these things as we raise our diplomats. On that point, though, the Chinese version of this stuff is unipolar. It's unilateral. It's my way or the highway. You will do these things. And then they go after these countries at the SCO summit. I mean, it's rogue’s gallery. It's countries that really have no accountability with their own populations.

And my first experience with this was at that Shangri-La Dialogue in 2014. I went with the chairman of the joint chiefs of staff Marty Dempsey, and Chuck Hagel, a Republican congressman who the Obama administration brought in as secretary of defense. What a great choice. The Japanese made a very strong press for watching out what the PRC is doing with debt traps and all that stuff. It was the first time that there was actually a really strong contentious back and forth between the PRC and, in this case, the US. All the others were hanging back behind the US going: okay, you guys take this one, but we don't want to get splashed. Don't make us choose between the two of you. That's why this headline really got my attention: we want a strong economic relationship with the PRC, but we want the US to provide our security. Now think about the math on that. When you're doing trade – economic interactions and those things – it should be a win-win. Everybody's condition increases. Security is not that way. Security is a bill. It's costly. We're going to spend $850 billion this year on the Defense Department, and that's not even enough. So I've been wrestling with that since 2014. I hadn't come up with a good four syllable response to “don't make us choose.” A very good friend and a former colleague and a former boss came back with “Lee Kuan Yew chose.” I like that one, but maybe a little more something a little less.

“I hadn't come up with a good four syllable response to “don't make us choose.” A very good friend and a former colleague and a former boss came back with “Lee Kuan Yew chose.” I like that one, but maybe a little more something a little less.”

Look at Pakistan. Pakistan went all in with the PRC with this China Pakistan Economic Corridor, and now they're regretting it. And they want to get out of this bad deal. Well, if I was in charge, I would say, I'm not going to make you choose. You decide which way you want to go, but it's a one-way door. Because if you're going to trade on American interests and American taxpayer dollars and use that to sweeten the deal with the PRC, well, don't come running back to us when that deal goes south as the China Pakistan Economic Corridor is. And the last thing on that, we want to talk about finance, it's obscene that Islamabad has gotten so badly in debt. Provides them no benefit. This thing is about moving energy from Gwadar into Kashgar in western China, and the Pakistani government gains very little or anything from that. But yet they're stuck with the bill. And in order to keep them from defaulting, they're going to the IMF. The IMF has taken American large part contributions, and they're not going to Islamabad. Where's that money going? It's going to Beijing. So they're actually validating this debt trap diplomacy, and we're a part of it. I don't want to be involved in that in any way. Pakistan, you made your deal with the devil. You're going to go live with it. You figure out how to get out of this default. That would be a good choice. Default. And then from there, we can work with you. But don't take good money from World Bank and IMF and send it up to Beijing for your bad decision.

REFRAMING CHOICES AND TRADEOFFS

ASEAN Wonk: Just to quickly follow up on that, in terms of the choices that these countries make or want to make, is there a sense in your view that there are certain areas where those choices are more important. Telecommunications is a very different space from retail. Where you choose to get your submarines from, for example, that's a very different capability from buying rifles, because one is much stickier and there are big concerns about interoperability, the other one not as much. So I'm wondering, in your experience, is there a way to think about these choices in ways that are much more granular in terms of what these countries are facing?

General Stilwell: In an ideal world, we would all go back and read about the Cold War and note that early on, we did try our best to make a deal with the Soviet devil. And, eventually, what was the answer to that? It was called containment. And so we had the Soviet bloc, and you had the free world. And look. As much as we hate to go back to this, as much as people don't want to think about Cold War and nuclear annihilation and worse – we just went through a pandemic – this is clearly part of the calculus. It's an ugly truth that we're all going to have to sit down and eventually come up with a plan to decouple and get out of this mess.

Now you have a great question about, you know, you buy submarines or you buy submarine cables. Is one better than the other? Let me offer a contrast. We intervened in several submarine cable purchases or contracts with Huawei before they made a decision using a number of instruments. One called the Transaction Assistance Fund, which doesn't get as much play as it should. It was a ten-million-dollar budget point, and it used the thing that America has the most of our surplus: we're burgeoning in one thing, and that's lawyers. And so we took this surplus of lawyers with One Belt, One Road. Well, how about we ship it overseas and help Burma make a decision on whether this Kyaukpyu Port is legal, if it's sustainable, all those things. And we helped them negotiate down a big bill for this port and energy facility down to something that was a lot more reasonable. So if we can turn them into something that looks more like a reasonable nondebt trap arrangement, well, send our lawyers there. I think it is still active. I think we should use it a lot more.

But submarine cables and other things, these strategic concepts are in a world where it's not about nuclear or kinetic warfare: we are in the world of economic information warfare. I plan to talk a lot about that here. And outsourcing your submarine cable development to Huawei and others might not be your best choice. On the other hand, the prospect of a Vietnamese Kilo submarine engaging with a Chinese gray hull combatant – possibly winning that exchange – I love that idea. Vietnam has its own sovereignty issues. It has its own long geographical frictions with the PRC – nine dash line, eleven dash line – and it has come to a head. In 1988, there's a video of PLA Navy folks machine gunning much of Vietnamese sailors standing knee deep in water in parasails.

So definitely there's a lot of friction there. If they happen to use Russian stuff, which is pretty good to defend themselves, I love the idea of Beijing staring at Moscow and going: did you really have to sell these guys your subs? India's bought that stuff and others. So let's use a little bit of judo here. Remember, judo is using your adversary's effort and energy against them. We're no longer a Nebraska lineman. We're not three hundred pounds, and we can't put the adversary on their butt anymore. We can't just bulldoze people. We're going to have to use our heads and use concepts like judo where we see the PRC digging a hole, making a mistake. As Napoleon said, never interrupt your adversary in the middle of a mistake. And then maybe even amplify that mistake for them. Let's be a little bit more nuanced in our thinking.

“[T]he prospect of a Vietnamese Kilo submarine engaging with a Chinese gray hull combatant – possibly winning that exchange – I love that idea… If they happen to use Russian stuff, which is pretty good to defend themselves, I love the idea of Beijing staring at Moscow and going: did you really have to sell these guys your subs?”

GEOECONOMIC ENGAGEMENT

ASEAN Wonk: The example of the Kyaukpyu port in Myanmar is interesting because the bright and shiny new infrastructure projects get the headlines but there are things behind which don’t like technical assistance and capacity-building – the soft components of infrastructure rather than hard components. As you said, that was important for Myanmar at that time to be able to make sure that they weren't making a decision that they would later end up regretting. One other aspect that goes missed is U.S. private sector investment. Interested in your views on that given your past experience with both the defense space and the State Department given the focus now on other economic components such as foreign aid and infrastructure.

General Stilwell: A giant topic. Let me start off with how this comes to be. Rudimentary, not fully developed governance; countries with governments that are still more on the authoritarian side – it's really hard to hold your leaders to account. So your hard and soft infrastructure: they make decisions not based on overall betterment of their own people and national interest; they make them based on elite capture and money. I mean, you look at Solomon Islands, Sogavare and the rest of that stuff. And you see it in Southeast Asia as well.

Key to that is transparency. So one thing we can do: we got a lot of reporters – we can help them expose and show and hold accountable their leaders. Not to the point, like – unfortunately, USAID had gotten a reputation for doing as far as funding revolutionary groups because they weren't pro-LGBT or, you know, supporting x or take your pick. Instead of focusing on the basis of what aid was – putting food on the table and helping people thrive – aid did drift into more sensitive subjects: back to pluralism. We have to accept that these countries are moving at their own pace, and they won't go faster just because we're pumping money in there. And, again, the governments look at aid money and many times don't want it because it brings with it all these strings. So it's unfortunate there are some programs that were beneficial that are going to suffer. I think in two or three years when we then take stock and look at the ones that were doing good things – PEPFAR and others, vaccines, food – we can sift the wheat from the chaff on that.

So other things worth talking about are those deals made in places like Naypyidaw and that Myitsone dam deal. Now I don't know how Beijing got the initial approvals going or started building that dam, but when the government of Myanmar saw what this thing was turning into, they rightfully shut it down. And good on them for having the courage of doing that. To paraphrase from Star Wars. “It's not the deal I signed up for.” And from Beijing: “I'm changing the deal. Pray I don't change it more.”

So infrastructure in itself is an unvarnished good. It is helping people move things and people around. That's a good thing. But when it comes to these extra strings or the quality without transparency, it's shoddy. And now we've got governments holding the bill for stuff that's not helping them. I mean, there was a runway built on Timor Leste that within maybe a year began to crack and crumble. It is of zero use, and yet they are going to have to pay for that. So as far as private sector goes, let's look at the bad examples. Let's talk about Goldman Sachs and the 1MDB deal in Malaysia. You know, Goldman Sachs was every bit a part of that. So we've got to police our own. Make sure that these deals aren't looking more like a Chinese deal, and looking more like what you'd expect coming out of the US.

But in my travels, a couple things came to light. I got to all but two of the ASEAN countries. I spent more than half of my time in ASEAN. And to me, it is the fulcrum. It is the point that we need to focus on in the Indo-Pacific that is going to be, one, be highest bank of buck and get the most out of investment in this relationship, and also needs our attention because of the disparate nature of the ten member states. Things we can do to maybe help them help themselves. I'll talk about those in a bit. So we saw 1MDB – that was just bad. But then you look at HP when I was in Singapore: HP trains native managers, local managers, unlike the PRC, which you're seeing in Pakistan right now. They bring in all their own labor. Booze swilling, pork-eating atheist Chinese in a Islamic country? It doesn't go well. That's why Islamabad fronted fifteen thousand troops to kill Pakistanis in Balochistan who are not happy with the Chinese operating in there. So, strange bedfellows with these Chinese deals. Again, it's not our job to fix it. What we do, what American companies do, is they want better insurance. They want to improve a lot, not because of some altruistic need: they want to do it because you train these people, they'll actually do much better job for you. This is a basic American concept. Vietnam – Starbucks offers its employees a free four-year college degree. Online, virtual, fine, but it's a lot better than deals they're getting from other places.

So last point on this is as we traveled around, a criticism is we are extremely uncomfortable advocating for American companies and American solutions in these capitals. And so the chambers of commerce and American companies near the embassy, when we meet with them, they were frustrated because the PRC would roll in with bribes and cash and stuff, and we would lose these deals over and over again. Whereas if we had just a little bit more support from the foreign commercial services and others at the US embassies, our people up front, we would get our best diplomats in front of our partners, and those diplomats are our businesses. It's our businesspeople. It's gone wrong in the past – United Fruit Company in Central America, I get it. But from my experience in the region, American business put the best face of America forward in their every order. And, you know – twenty-five thousand in the State Department, Foreign Service Officers – a lot more business people out there in the world than that.

RECOMMENDATIONS ON TAIWAN CONTINGENCY PREPAREDNESS

ASEAN Wonk: You brought up some good points there. There’s often a focus on strings coming in with U.S. assistance, but actually there are actually irrespective of the source: the strings are just different and the elites and regimes may interpret those strings differently, whether it's USAID or a private US company or it's coming from China, so on and so forth. Some of these also relate to companies themselves. Some of these big companies market themselves as global companies not US companies, so it’s more difficult for people to fully realize the connection between the US and individual brands.

I wanted to switch for a bit to security issues and a couple of key flashpoints. One is the Taiwan question which you’ve looked at for a long time from various perspectives. We’ve seen U.S. officials talk more about how China has moved from what they characterize as preparations to really more of rehearsals for a Taiwan scenario. We're also seeing countries like the Philippines do more with Taiwan, some of which has come out in the public domain, others not so much. More governments are also quietly thinking through some of the scenarios for their own interests, whether it’s securing their own citizens or responses if there is a military scenario. What's your sense of regional preparedness for these scenarios in Southeast Asia, and what more needs to be done and what could be done better?

General Stilwell: I guess to be blunt…

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Our guest today is Dr. Pushpanathan Sundram, who previously served as a former ASEAN deputy secretary general and has over thirty years of experience working across regional issues. We will start talking about ASEAN's newly-released vision out to 2045 and evolving initiatives out to the next round of regional summitry later this year. Be sure to tune in as we go through a range of other subjects, including geopolitical flashpoint management in Southeast Asia as well as geoeconomic priorities amid developments like tariff wars, BRICS enlargement and ASEAN-GCC-China summitry.

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Note: The transcript that follows the above free clip preview has been lightly edited for clarity and organized into sections for ease of quick browsing. For all ASEAN Wonk Podcast episodes, full video and audio podcasts, along with edited and sectioned transcripts as well as block quotes, will be a premium product for our paying subscribers, but we will include a short free transcript preview and a clip for all readers to maintain accessibility. Paying subscribers can find the rest of the full transcript and the full video podcast right below the paywall. If you have not already, do consider subscribing, and, if you have already done so and like what you see and hear, do consider forwarding this to others as well who may be interested. Thank you for your support as always!

INSIDER’S PERSPECTIVE ON NEW ASEAN VISION 2045

ASEAN Wonk: So welcome to the podcast Nathan, and I wanted to start, if we could, on ASEAN's new vision 2045, which was publicly released in late May alongside events tied to the summit. As you well know, this is something that's been in the works for a few years already even though it's just been publicly released. As somebody who has been working with ASEAN from the inside, including as deputy secretary general, you've seen the trajectory of this organization up to date. How would you grade or assess this new Vision 2045 that was released within ASEAN's broader trajectory?

Dr. Pushpanathan Sundram: Thank you, Prashanth, for the invitation to this podcast. I'm pleased to talk about something that's very close to me, ASEAN. The ASEAN Vision 2045, I would say, is an ambitious plan for twenty years, but it's backed by structure. I was involved in drafting the first ASEAN Economic Community Blueprint. We have put in a lot of things there, but we realized that ASEAN will need time to actually implement. So this time, they are really looking at it in a more in-depth perspective in terms of looking at the vision plus the structures needed. In fact, for the economic community itself, they have five-year plans, strategic plans. They've come out with strategic plans for all the communities under this Vision 2045. So the political security community, economic community, social cultural community, and the master plan on the connectivity aspect of it. So we look at the AEC and connectivity strategic plan as they call it now. They don't call it a blueprint strategic plan anymore. They are five years. The others are ten years.

So each of the plans have a number of goals and measures. I counted around total all the four strategic plans will have about five hundred measures or so. So it's quite a detailed plan. The thing is if you look at an ASEAN plan itself, what is important to realize is that sometimes it's aspirational. Sometimes it's very broad. But I think what it needs is the depth. So even if you look at the various plans, right, the 2025 plan, the secretary general actually mentioned that the political security blueprint has now achieved 99.6 percent, economic blueprint around 97 percent, and then the sociocultural about 99 percent, and the master plan on ASEAN connectivity 83.9 percent. These figures look very good actually. But if you really look at it, I would say, yes, they may have implemented it from the broad sense of all the measures. But when you really go into the depth of it, that is where the problem is. Because if you don't really tackle the depth, then you will not see much change. So I think that's where the crux of the matter is when you look at the blueprints.

“The thing is if you look at an ASEAN plan itself, what is important to realize is that sometimes it's aspirational. Sometimes it's very broad. But I think what it needs is the depth.”

Now let me just give you some examples. For example, ASEAN has done very well on the tariff side, reducing tariffs. So, 99 percent of all tariffs are now down. But if you look at the non-tariff barriers, it continues to be a challenge, I mean, especially, say, in the agricultural sector, there are still high tariffs. Now on the political side, the crisis response to Myanmar or the Rohingya crisis was slow and constrained by consensus. And then the human rights declaration remains nonbinding, and there is, I would say, lack of effective enforcement mechanisms. So if you really look at the 2045 plan, it’s very good, but the weakness will be in the enforcement and timely action. So this is an area that I hope ASEAN will look at when they develop the structure to implement this twenty years plan.

EVOLVING APPROACH TO REGIONAL STRATEGY DEVELOPMENT AND PROGRESS

ASEAN Wonk: Right. This is the first ASEAN twenty-year vision – the previous vision was ten years. But as you said, they have these strategic plans on different timelines, so they can be updated from time to time. How does this relate to the fast-changing world that we are facing in right now? It does seem like there's an attempt to balance responsiveness with the broader vision so that ASEAN is able to stay on track for the long term. What are your thoughts on this given that this is something that ASEAN has been grappling with since the time you were there?

Dr. Pushpanathan Sundram: Yeah. So we had previously what we called Vision 2020, if you recall. So that was also a very long vision. And then in between, we had the AEC blueprint and the various blueprints and so on. So I remember my time, the blueprint was seven years implementation, 2009 to 2015. And then we had a ten-year plan. Now we have a twenty-year plan. One, it shows that ASEAN will need more time actually to implement. Actually, if you really want to implement it in-depth, I think it will take time. So it's good that on the economic community as well as the connectivity aspects, they have a shorter term five-year plan because things are changing so fast, and there's so much economic uncertainty. So having these five-year plans, strategic plans, I think the economic one is going to be 2026 to 2030 or so. So that's going to be very important, actually. So every five years, they relook at what's happening because I think ASEAN cannot work in isolation by itself. It has to really look at what's going on out there. So I think that's important to have that kind of short plan, and then they make adjustments.

So under the new 2045 plan, they have these implementation mechanisms like the annual progress reports, the midterm review in 2030, and the final assessment in 2045. Then they will create some dashboard, and I think external evaluation teams will look at it and track and verify it. So I think they're putting in those mechanisms so they can track the progress.

ADJUSTING TO GLOBAL GEOPOLITICAL CONTESTATION

ASEAN Wonk: I agree with the point you made earlier about ASEAN needing to adjust to a fast-changing world, and Malaysia Prime Minister Anwar Ibrahim mentioned at the Shangri-La Dialogue in Singapore that the region has to hold its own ground amid a series of challenges including tariff wars and U.S.-China competition via what he called active non-alignment. He has referenced some of the measures being taken, including the first-ever ASEAN-China-GCC summit and a new ASEAN geoeconomics task force. What is your sense of how Southeast Asia and ASEAN are holding the ground in this changing world?

Dr. Pushpanathan Sundram: Yeah. I think ASEAN will be facing a lot of challenges. As you know, ASEAN centrality is going to be still very important for all of us. So I think ASEAN will have to adopt a strategy where it's working with the world in a sense.

Like the U.S. tariffs. ASEAN as a whole has decided not to retaliate but to cooperate and work with the US. So I think that’s a good strategy in the sense that we want to see how we can further progress in terms of the tariff negotiation. So each country will do its part. The aim is to work out an amicable solution bilaterally with each of the ASEAN countries and the US. At the same time, I think this is an opportunity for ASEAN to really look internally. So, one of the things that is going to be very important is this upgrade of the ASEAN trade in goods agreement, ATIGA. ASEAN has learned from the COVID pandemic situation that intra-ASEAN trade is so important. So during the COVID pandemic, the intra-ASEAN trade was a buffer. So I think they recognize this.

“Like the US tariffs…I think this is an opportunity for ASEAN to really look internally…”

So ASEAN is now concluding the protocol, expected to conclude, I think, by end of the next summit possibly early 2026. The focus is going to be on tariff simplification, non-tariff barrier reduction, rules of origin, streamlining, and so on. So I think that's going to be important. That will enhance intra-ASEAN trade, which is still hovering around, say, 22 to 25 percent. It's not growing. So one of the reasons it’s not growing is because of non-tariff barriers, then the streamlining of the custom procedures and so on. So I think that will be very important, the ATIGA upgrade.

Then I think you're also aware about the Digital Economic Framework Agreement (DEFA) that ASEAN is looking at. From what I understand, the final negotiations are underway. This is going to be a very important agreement, actually, because it will cover data flows, cybersecurity, digital ID, e-commerce, fintech, and taxation, for example. So outside other regions, other minilaterals are also looking at it, so it's important for ASEAN to really work on this and actually get it done soon. Hopefully by this year or next year, we will be able to move forward with this particular DEFA.

Then, of course, looking at the minilaterals itself, there are so many of them mushrooming. It's how ASEAN will deal with that. So I think ASEAN has really looked at it. The second GCC summit, is actually one of the responses because ASEAN is trying to see how it can work with GCC in terms of tourism, trade, investment, and so on. In fact, I think two years ago, GCC mooted the idea of a free trade agreement (FTA). And ASEAN was lukewarm then, but now I understand that after the summits, they have taken a position to seriously study whether there could be an FTA.

And then, of course, they had this first GCC, ASEAN, and China summit. I think that's another important summit because we have, for example, the Regional Comprehensive Economic Partnership there. China is there. ASEAN is there. And there is also talk about whether they can expand the RCEP to include the GCC countries, which I think is not a bad idea because GCC is a growing region, and they're interested in ASEAN. So there could be something that ASEAN officials can look at.

So I think there's a lot of opportunities out there for ASEAN to tap. I think what is important is making use of the ASEAN platform. We have, I think, very good platforms like the ASEAN post ministerial conferences where we engage all the dialogue partners. Then we have the plus one summits and the plus ten summits. So these are areas where ASEAN can use the platform, maintain its centrality, and then work through that in terms of looking at how it can kind of further engage our dialogue partners.

Most of our dialogue partners, the main ones have FTAs with us, free trade agreements. I mean, ASEAN has already been working on upgrading the China FTA. Now I think they have also made, some recommendation to Japan to look at similar thing, for Korea, they wanted to do it next year, I think they've advanced to this year. So ASEAN is actually taking effort in terms of looking at how to upgrade the FTAs, how to improve the ASEAN free trade area, and then how to link up with other regions. I mean, look at other FTAs outside Asia. GCC could be one. They're also engaging Latin America and so on. So I think this is the way to go. So while we look at dealing with the US on the tariffs, ASEAN is looking internally as well as with his partners in terms of, growth.

STRATEGIES FOR MANAGING TRUMP TARIFFS

ASEAN Wonk: And you mentioned the tariff negotiations. We’ve seen ASEAN take a regional position in terms of not retaliating, but we’re also not surprisingly seeing bilateral negotiations with the United States because all these countries also need to engage in that format. What is your sense of how ASEAN as a grouping and the bilateral track are actually balanced or calibrated between the Southeast Asian countries?

Dr. Pushpanathan Sundram: Yeah. This has been, I would say, a historical problem. Even if you look at the FTAs itself, right, when ASEAN negotiates, we are not negotiating as ASEAN as one. So if we look at the FTAs, there are ten different lists. Each country will require a list, and then the dialogue partner will provide a list. So that's how ASEAN has always been functioning. So I'm not surprised that they want to go into a bilateral negotiation because each of them have different strengths, and they have different advantages in terms of the US. Thailand, for example, is one of the major exporters of food agriculture products. Singapore is different, actually. So you cannot have a unified ASEAN position on that. So what they have done, I think, is correct in terms of saying that, generally, they agree that all of us will cooperate with the US. We're not retaliating. And then each of them are actually negotiating it separately. But that's how we are set up, actually. So this is not feasible for ASEAN to go into a regional kind of US negotiation.

The proposal for a US ASEAN summit was good. I hope the US will consider that, or something similar to that maybe at the minister's level. So that will be a good platform for both sides to really talk about one of the big issues, because I think ASEAN considers US as one of the major trade partners. The US is still the number one investor in the region. So I think it's important to work with the US on this.

LOOKING AHEAD TO 2026: FLASHPOINT MANAGEMENT AND DATAPOINTS TO WATCH

ASEAN Wonk: I wanted to move our conversation forward to what we might expect in 2026 and beyond within ASEAN. In terms of the flashpoint management picture, we’re going to be seeing major developments with Myanmar’s election expected as early as December this year and the South China Sea being front and center as we head to the Philippines ASEAN chairmanship and arbitral tribunal ruling next year. Given your experience working within ASEAN, what are you expecting on both of these flashpoints in the rest of 2025 and heading into 2026, along with other datapoints to watch?

Dr. Pushpanathan Sundram: Okay…

[Note: This is the end of a free preview podcast, with the full version in an earlier post published on July 24, 2025 available to our paying subscribers. This is not meant to serve as new content and is part of our free preview content within the dedicated website podcast section].

Our guest today is Dr. Ely Ratner who served as assistant secretary of defense for Indo-Pacific security affairs under the Biden administration. We will start our conversation talking through contemporary developments in U.S. security relationships in the Indo-Pacific. Be sure to stay tuned as we go through a range of other subjects, including the the new administration’s coming U.S. defense strategy, datapoints to watch in 2026, Taiwan and the South China Sea.

To receive full ASEAN Wonk posts and support our work, consider a paid subscription for $5 a month/$50 a year through the button below. For more on pricing for institutions, groups and discounted categories, visit this page.

Note: The transcript that follows the above free clip preview has been lightly edited for clarity and organized into sections for ease of quick browsing. For all ASEAN Wonk Podcast episodes, full video and audio podcasts, along with edited and sectioned transcripts as well as block quotes, will be a premium product for our paying subscribers, but we will include a short free transcript preview and a clip for all readers to maintain accessibility. Paying subscribers can find the rest of the full transcript and the full video podcast right below the paywall. If you have not already, do consider subscribing, and, if you have already done so and like what you see and hear, do consider forwarding this to others as well who may be interested. Thank you for your support as always!

GRADING TRUMP ADMINISTRATION’S EARLY INDO-PACIFIC DEFENSE APPROACH

ASEAN Wonk: Welcome to the podcast, Ely, and I wanted to start with your take on where U.S. defense policy is under the second Trump administration. We just saw Defense Secretary Pete Hegseth out at the Shangri-La Dialogue in Singapore. And to be fair, if you look more at what he did rather than what he said, you could make the case for a lot of continuity with the building out of the security latticework that we saw under the Biden administration. But as one Southeast Asian official said to me, the key challenge seems to be to what extent is this new administration going to be able to build out the so-called lattice work even as it does seem like – from some of the headlines and some of the experiences of some of the countries in the region – the aperture of U.S. engagement seems to be narrowing or changing when it comes to other non-defense aspects of U.S. policy, whether it's through tariffs or U.S. assistance and focus and so on and so forth. So as a practitioner yourself and somebody who has thought about U.S. defense policy both in and out of government for a long time, how would you go about grading the new administration's approach with respect to defense policy in the Indo-Pacific?

Dr. Ely Ratner: Well, Prashanth, thanks for the opportunity to be here. It's great to talk with you today. I think your prompt laid down a number of the issues in early assessment, which is in terms of activities, in terms of messaging, I think we have seen a decent degree of continuity. Secretary Hegseth’s first trip out to the region to the Philippines and then Japan, both in terms of the types of deliverables that were announced as well as the messaging around U.S. commitment to the region, U.S. commitment to allies and partners that did represent a good amount of continuity.

Where we have seen some particularities related to the Trump administration, we have seen a much stronger push toward allies and partners to spend more on defense and to do more and contribute more. I think some of that had started under the Biden administration. And frankly, I think up to a point, that's actually quite a good direction to take our alliances and partnerships. So that has been much more forward as a central priority. And then, yes, of course, as you mentioned, the changing nature of U.S. foreign assistance in the region as well as the economics on tariffs have created, I think, political headwinds, diplomatic headwinds. And the question is to what degree are those going to interfere with the ability – both the political space and the ability – of countries in the region to continue forward on deepening defense and security partnerships.

So I think we are at a little bit of a inflection point here where – yes, you are seeing continuity; you're seeing good messaging – we also haven't necessarily seen the full fruition or development of a clear regional strategy from the new administration. There's a national defense strategy, which by all reporting is underway and may be released as early as the end of the summer, and that'll give a good indication on the defense front where the administration wants to head. And that appears to be quite focused on the on the China challenge, also focused on the U.S. homeland, and that has a certain degree of implications for how the administration approaches the region, how the administration approaches allies and partners from a defense perspective. But, obviously, as you said, it's a broader aperture of economic and diplomatic initiatives as well that affects all of that. So I think mostly continuity so far with some potential disjunctures based on some of the external factors.

“There's a national defense strategy, which by all reporting is underway and may be released as early as the end of the summer, and that'll give a good indication on the defense front where the administration wants to head.”

EVOLUTION OF LATTICEWORK AND REGIONAL SECURITY PARTNERSHIPS

ASEAN Wonk: Right. I wanted to ask a broader question about the security latticework or network of US alliances and partnerships. Because as you're aware, this is something that's been in process really since the end of the Cold War – this idea of transitioning from wheels to webs; hub and spokes to more networked forms of alliances and partnerships. I'm wondering for Southeast Asia where you see U.S. engagement having proceeded there? Because I do sense that even though there's a lot of focus in the headlines around the Philippines, for example, there was an effort by the Biden administration to really broaden out how to think about defense – not just integrated deterrence, but also looking at opportunities like East Timor for example, and Indonesia with Super Garuda exercises. Where do you see key partnerships and direction of travel regarding Southeast Asia’s place within the broader U.S. Indo-Pacific defense architecture in the past ten, fifteen years?

Dr. Ely Ratner: Yeah. It's a great question. Look, maybe I'll answer it in a couple different ways. I mean, in the first sense, I think what you're describing of an aspiration to try to mature the regional architecture beyond just the hub and spoke model or beyond just a set of U.S. bilateral alliances has been around as long as you and I have been in the business. You can go back ten, fifteen years, and there are think tanks writing about the Asia power web or this networking. But up until pretty recently, I think it had been mostly fits and starts and aspiration, maybe dialogue at best. I think what we saw during the Biden administration was a real transition from the latticework or the networking being theory or at best dialogue to moving toward no kidding activities that can have a real impact on operational cooperation, and, at the higher end, combat credible deterrence. So we saw that with AUKUS, obviously; in the “Squad” arrangement with the Philippines, Australia, and Japan; and the US, Japan, South Korea arrangement; to a degree, the Indo-Pacific Quad with India; and continued U.S. engagement with ASEAN, including plans for another U.S.-ASEAN exercise upcoming in the coming years.

You know, sometimes as new opportunities and institutions emerge, particularly in Southeast Asia, there is concern that it is crowding out attention toward ASEAN or somehow diminishing how we think about ASEAN centrality as the role of ASEAN as sort of the lone convener of the region together. I guess I understand those concerns, but we all consider these – both in the way we spoke about them, but in practice – as complementary and overlapping. That the idea was not that one institution would move in and push aside all the others, but that the combination of them – different partners addressing sort of fit for purpose, different issues – that that was the right way to think about the overall regional architecture, and I continue to believe that.

I have written a piece in Foreign Affairs arguing that when it comes to combat credible deterrence, it will be important to move beyond just some of the ad hoc arrangements into a more formal collective defense arrangement, starting with the United States, Japan, Australia and the Philippines. That's really of the belief that, look, the latticework as it currently exists serves a lot of important functions. I think it strengthens the region. It's a good thing. It's the right thing to be doing. But in terms of real military cooperation – we can talk about sort of how it affects economics and diplomacy and foreign assistance and other issues – but when it comes to no kidding, militaries operating together in a way that strengthens deterrence, the ad hoc and informal nature of a number of these latticework institutions leaves them maybe where the whole isn't really more than the sum of the parts when it comes to command and control and exercises and operations and planning. And that you do need a more formal mechanism to get to a future where the power of the alliances together is really leveraging all of the capabilities.

Because as much as we are working together in these different constellations and we can work together to do exercises and it sends an important signal regionally about the degree to which we're cooperating and we're aligned, it's not always trending toward, again, no kidding ability to operate during crises and contingencies. So I think a part of the latticework needs to formalize. That doesn't mean the rest of it doesn't matter or the rest of it should go away, but a part of it does need to formalize.

Now moving to your question about Southeast Asia in particular, you're right that the Philippines has been at the center of those. That's because, frankly, the Philippines has been much more aligned on the China challenge than much of the rest of Southeast Asia, at least publicly. So I think that makes sense from an alliance perspective. But the United States does – and certainly the Biden administration did – view its defense partnerships with other countries in Southeast Asia as quite important, and again, ASEAN as a whole with really the value in bringing the region together. And having sat through a number of the ADMM plus meetings, it really was my perspective that those were vitally important to having that holistic conversation in a way that it really doesn't happen anywhere else. And also the convening power of bringing all those leaders together to be able to meet.

You know, Southeast Asia is very far from Washington. That's no secret. You travel out there all the time. It takes, you know, a good day to and a half plus to get there. So it's not easy for the U.S. secretary of defense or senior officials to be constantly in the region. But those types of forums allow the senior officials and the secretary to engage at senior levels with all of the relevant players there. And so those opportunities are incredibly valuable. So the convening part is really important.

And then the work with the Southeast Asian partners continues. A lot of it not always on the front pages, but working closely with partners around some of the issues that they're concerned about, whether it's the sovereignty issues in the South China Sea, whether it's illegal fishing, other kinds of transnational crime issues, maritime domain awareness. I think there's a lot of it even if at the strategic level, there is not perfect alignment among the United States and all of the Southeast Asian partners. I think when it comes to elements of what's articulated as the free and open Indo-Pacific and the types of norms and principles that come along with that, there actually is a good deal of alignment in terms of the kind of behaviors that we want to see. So it's a long answer to your question, but the answer is that I think there are still opportunities to continue building these relationships. And I think we see that happening sometimes a little bit below the radar, but in an important way, and that ought to continue.

ASSESSING CHINA’S REGIONAL SECURITY NETWORKING INROADS

ASEAN Wonk: That’s a useful perspective on both the U.S. strategy and also the regional dynamics. I would encourage listeners to read the full Foreign Affairs piece because even though there’s been some reaction to the headline on the Pacific Defense Pact, you clarify quite clearly in the piece that there isn’t really necessarily a need for a pan-regional organization like a NATO equivalent in in Asia. We can actually do this with a number of partners with some full participation, some participation in some aspects or some activities rather than sort of talking about this notion of an Asian NATO.

One other aspect I wanted to ask you about is, if China is to be read as the pacing challenge for the United States – as both the first Trump administration and the Biden administration, and so far what we've seen from the second Trump administration have seemed to recognize – we also do need to think about how China is thinking about its own security latticework and architecture in the Indo-Pacific region, including in Southeast Asia. And I think there is maybe a tendency for some folks to sort of dismiss this as, “oh, it’s a kind of a low value exercise” or “it’s a single partnership.” But my conversations with Chinese interlocutors is that they're very well aware of the fact that China is building from a very fragile foundation, so to speak, on the security aspects. But they're also aware that a gain here and a gain there eventually adds up over a period of time. And I would argue the things we're seeing in Southeast Asia – some of the defense sales that China is pursuing, a sort of naval base that Cambodia is characterizing as not being a naval base – a lot of these things, twenty years ago, you may not have foreseen in Southeast Asia, and they are now happening. So I wanted to get your sense as well as to how would you characterize the inroads that China is making in the region relative to what the United States is doing as well because this is a relative competition.

Dr. Ely Ratner: Yeah. It's a great set of points, and I think you've articulated well some of the challenges that we're facing. And, look, the PRC and the PLA are building up their defense and security relationships throughout the region. I would apply much of what you said to the Pacific Islands as well. It's a different set of dynamics, but we're seeing a similar level of ambition there. And there are multiple elements to it. There are arm sales, as you described, where China – either through cheaper manufacturing or just frankly subsidization – can provide capabilities at cost that is very difficult to compete with for the United States or other advanced militaries that are producing weapons domestically for domestic militaries at a quite substantial cost. So I think there are opportunities for inroads if left unfettered on security assistance. Certainly, the basing aspirations of the PLA have not waned, and the fact that they don't have more bases in places in the region and around the world is only because the supply has been less than they had hoped for, not because the demand is not there in Beijing. I think they're pressing very hard for opportunities.

“Certainly, the basing aspirations of the PLA have not waned, and the fact that they don't have more bases in places in the region and around the world is only because the supply has been less than they had hoped for, not because the demand is not there in Beijing. I think they're pressing very hard for opportunities.”

Countries understand, I think, some of the downside risks of that. So Beijing hasn't found as many willing partners as maybe they would have expected. But an absent United States or a distracted United States, you're right, could turn around and find out that things are emerging that have accumulated to effect. So I think that's exactly right to be a concern. And the way that Beijing is going about some of its defense and security partnerships is fusing also some of the domestic security concerns with the external security concerns. And this is where China's defense and security relationships may not look exactly like our formation of sort of external defense arrangements, but rather working with regimes through policing, surveillance, other types of regime security arrangements that are coming through PRC security agencies. But also deepen relationships and lead to openings for the PLA training and other activities that – again, I think you're right – over time, all of those things together accumulate.

I think maybe one thing to say about the U.S. strategy here is that when it comes to the vast majority of partners in Southeast Asia, the United States is not aspiring to somehow flip them into a U.S. ally like Japan or Australia. And I think the moniker of the United States is not asking Southeast Asia to choose between the United States and China is both true and a recognition of some of the economic and geopolitical realities. What we want in the affirmative case is to ensure a free and open Indo-Pacific where there's room for U.S. access and global access to commerce, ideas, people, technology, militaries. And the flip side of that is avoiding a situation of Chinese domination or Chinese hegemonic control. So, again, I don't think the adroit strategy here is looking at Indonesia or Malaysia or other partners in Southeast Asia and saying: “Okay, how do we flip them to be anti-China and pro United States?” I don't think that's realistic.

I think what we want to do is maintain sufficient relationships with these countries that we can continue to work with them on what we think is in many instances from a defense and security perspective, our shared aspiration. Because as much hostility as one finds toward the United States in Southeast Asia or towards certain things associated with the U.S. military, I don't think capitals in Southeast Asia are interested in becoming satellites in a China-dominated region, which I don't think would be in their interest in the short term or in the long term. So, again, I think this is about understanding that China is a cultural and historical and economic and geopolitical reality for Southeast Asia. And in that context, maintaining sufficient relationships so that we can continue to work together. And that's really the aspiration. So when we look at the kinds of PRC activities that you're describing, I think ensuring understanding that, yes, these countries are going to have some degree of military and defense cooperation with the PLA, and that is natural. And that should be okay. And the United States needs to operate within that and achieve its objectives within that. So very serious concern about them tipping into a direction of effective control, hegemony and domination in the South China Sea and Southeast Asia, but not an aspiration for U.S. primacy or dominance as the U.S. objective.

TRUMP ADMINISTRATION’S COMING DEFENSE STRATEGY AND INDO-PACIFIC DATAPOINTS TO WATCH OUT TO 2026

ASEAN Wonk: Right. And as you point out, China is known to use some of its nondefense levers for security gains. Southeast Asian countries also have agency to reject or shape those in ways that might be more beneficial for their own strategic interests. I wanted to move our conversation forward to the first national defense strategy of this administration, which as you noted we could see in the next few months, and the implications for U.S. defense policy heading into 2026. There are lots of uncertainties around aspects of policy – some of this is administration-specific, others relate to the churn you see in the first year of any administration. As we think about this national defense strategy and its release, what are you going to be looking for in terms of how we might define success in this new defense strategy, particularly its implications for the Indo Pacific and U.S.-China competition?

Dr. Ely Ratner: Yeah…

[Note: This is the end of a free preview podcast, with the full version in an earlier post published on June 26, 2025 available to our paying subscribers. This is not meant to serve as new content and is part of our free preview content within the dedicated website podcast section].

Our guest today is Andrew Goledzinowski who previously served as a senior career Australian diplomat with several posts within Southeast Asia, including as ambassador to Vietnam, high commissioner to Malaysia, as well as the first assistant secretary at the Southeast Asia Regional Division.

We will start our conversation talking about recent developments in Australia's ties with Southeast Asia. Be sure to tune in as we go through a range of other subjects, including the shifting geoeconomic landscape in the region and Australia's strategy on Southeast Asia as well as the Indo- Pacific and where that might be headed.

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Note: The transcript that follows the above free clip preview has been lightly edited for clarity and organized into sections for ease of quick browsing. For all ASEAN Wonk Podcast episodes, full video and audio podcasts, along with edited and sectioned transcripts as well as block quotes, will be a premium product for our paying subscribers, but we will include a short free transcript preview and a clip for all readers to maintain accessibility. Paying subscribers can find the rest of the full transcript and the full video podcast right below the paywall. If you have not already, do consider subscribing, and, if you have already done so and like what you see and hear, do consider forwarding this to others as well who may be interested. Thank you for your support as always!

GRADING AUSTRALIA SOUTHEAST ASIA ENGAGEMENT TODAY

So welcome to the podcast Ambassador and let’s get started. We've seen Australia record some notable wins in its engagement with Southeast Asia. There was a second special summit held last year, upgrades with countries including Vietnam, which you were involved in as well. At the same time, of course, just like with any other country, there are no doubt some limitations as well and challenges within Australia's wider approach. For example, on economic ties, there was a government commissioned report on investment in Southeast Asia that noted that Southeast Asia is just over three percent of Australia's investment stocks abroad, and there needs to be a lot more work to be done in that domain. I guess we can start with how you assess or grade Australia's Southeast Asia strategy? And you can use any sort of scale you want, whether it's a letter grade or a scale of one to ten.

Ambassador Andrew Goledzinowski: Gosh, that's a good question, Prashanth. I haven't been asked that one before. Well, look, from my point of view, our relations with Southeast Asia are as good as they ever have been. So from that point of view, I guess the relative trajectory and performance is very good. And you would have to say that the student is improving. But in absolute terms, it's not good enough, to be honest. I think I would give Australia a solid B. And the reason is that it's increasingly obvious that our future lies in the region, and our engagement has been successful but insufficient, I would say. And there are a lot of datapoints that suggest this.

I mean, politically, we're doing very well. You referenced the second special summit. And, you know, the fact that we can convene these, that the leaders come, that they all recognize that Australia is an important player in the region, is valuable, is worth engaging. Those are all positives. And I would say the sort of the less tangible atmospherics – the vibe, if you like – is also very good. The relationship is respectful. There are no major irritants, and all that is positive.

But as I say, it's not really enough. You referenced the fact that three percent of our overseas investments are in Southeast Asia. That is a damning data point, I think. For a country that is as open as Australia is, we're a trading nation. We rely very much on open communication and commerce. We have been sort of skipping over Southeast Asia for far too long. And there are some good reasons for that. Our institutions that invest are generally the big ones. It's our pension funds, which are ginormous: they have something like four trillion dollars in assets under management. Our big publicly-listed companies – the big four banks, for example –and the others, they tend to be very conservative investors. They prefer to invest in Australia or in North America, and they are not looking for big returns. They would prefer to be safe rather than get rich fast. And that holds us back a little bit. Because in Southeast Asia, you have to be prepared to take a little bit of risk. And most importantly, you have to be prepared to get involved. You know, we tend to sort of do things from over here and then eventually make an investment decision and then move over into Southeast Asia in a cautious way. But as I sometimes say, investing in Southeast Asia is a bit like crossing the road in Hanoi. And if you've been to Hanoi, you know that you can't plan it from the curb. You have to step out into the traffic and have confidence that you will navigate your way across. And invariably, you do. But it does require that first step, and we in Australia tend to be just a little bit chary of that.

“[A]s I sometimes say, investing in Southeast Asia is a bit like crossing the road in Hanoi. And if you've been to Hanoi, you know that you can't plan it from the curb. You have to step out into the traffic and have confidence that you will navigate your way across. And invariably, you do. But it does require that first step…”

DIRECTION OF TRAVEL IN BILATERAL AND SECTORAL ENGAGEMENT

ASEAN Wonk: Right. That's a great analogy on the sort of leap of faith amidst the motorcycles in Hanoi. You mentioned this notion of the vibe or the atmospherics or the narrative, which I actually think is a really important point. And for Australia, there have been a whole host of announcements in the past couple of years – a new green and digital shipping corridor with Singapore, work that was done with Vietnam to upgrade the relationship, and you just saw the Australian prime minister in Indonesia just after being elected in his first foreign trip talk about some of the economic opportunities with the Prabowo government. Given your perspective of having served in several of these different countries and also looking at the region regionally, what would you say about some of the notable movements on direction of travel, whether it's with respect to countries or sectors for Australia strategy in Southeast Asia?

Ambassador Andrew Goledzinowski: Well, I would say government is leading the way. You've referenced some of the initiatives. You've referenced that the prime minister himself has chosen to focus on Southeast Asia. The thing is, you know, it can't just be the government. We need the business sector. We need civil society. We need universities and others to also engage. And I think that's going to happen. It's beginning to happen. Of course, it's been happening for many years at one level. But as I said, I think it's inadequate given our geographic circumstances and the historical times we live in. Inevitably, we need to focus more on Southeast Asia.

Now we've been a bit distracted with the Pacific for good reasons. The Pacific is our backyard. It's the region where we feel that we can make the biggest impact. And the sort of strategic competition that has been developing in that part of the world has engaged us very strongly. So a lot of political capital, a lot of resources, money, but also people. The number of people that DFAT now has in our office of the Pacific compared to when I was working in the Pacific is quite extraordinary. And that comes at an expense, right? Because it's almost a zero-sum game. The more effort and attention you pay to one region, the less you have for the rest. I think that'll rebalance over time. And I've always believed that our fundamental strategic interests as well as our economic interests do lie in Southeast Asia.

And so the direction of travel, as you put it, I'm starting to see some small, not shifts, but accelerations. So in the university sector, a number of universities are now talking about either establishing or reviving or refreshing their Southeast Asian think tanks – the centers that they have focusing on Southeast Asia. I'm beginning to see more interest from the superannuation community. When I was in Vietnam just middle of last year, we hosted a big delegation of superannuation players who also went to Indonesia and elsewhere. It was kind of a very preliminary testing of the waters because their mandates are very restrictive. And Vietnam isn't yet even considered an emerging economy in terms of its ratings as an investment destination. But they're starting to show interest, and I think that will continue to accelerate.

The other way also is positive. Southeast Asia kind of knows us better than we know them, and partly because we have a huge alumni community there. I mean, Malaysia, we were just talking about, it's somewhere north of four hundred thousand people have studied in Australia or studied at Australian universities in Malaysia. That creates an enormous body of goodwill and interest in Australia. You know, I'm hoping that our more restrictive student policies now in Australia don't impinge negatively on that because it's that kind of people-to-people knowledge, confidence, and familiarity which then does enable other things like investment to happen.

VALUE PROPOSITION AND STRATEGIC NARRATIVE

ASEAN Wonk: You talked there about a very important component, which is the multistakeholder and multidimensional nature of Australia's engagement. And I think we've seen that even in some of the special summit engagements: Australia clearly messaging this about being not just about things like maritime security, for example, which are really important, but also students and bringing in the business sector. So there is clearly an attempt to do that. At the same time, as you're aware, in the region, there are pockets or circles where Australia is still perceived as either having a foreign policy and an approach that still is weighted a little bit too much towards the United States and the alliance, or perhaps having interests that lie elsewhere in other parts of the Indo-Pacific, like the Pacific, as you mentioned. How would you assess how Australia is doing with respect to articulating its value proposition and strategic narrative in the region? Because this is something that all of the countries are facing. It's a very crowded region where a lot of actors are trying to be involved. But it does also put more pressure on governments to define what exactly they're contributing relative to other governments.

Ambassador Andrew Goledzinowski: Yeah, that's a really good question. And it's true. I think the Southeast Asians sometimes scratch their heads a bit about Australia. But that's okay. You know, Dick Woolcott, former distinguished ambassador to Indonesia and elsewhere, the UN and secretary of foreign affairs, he once put it like this. He said, Australia is not the odd man out in Southeast Asia; we're the odd man in. And I like that.

And remember too that Southeast Asia is probably the most diverse subregion in the world. You know, religion, economic models, political traditions, it's really quite an extraordinary grouping of countries. And therefore, for us to be in there as well – not as a member of ASEAN, but as a sort of a member of the broader family – I don't think it's too odd a fit at all.

“Dick Woolcott, former distinguished ambassador to Indonesia, he once put it like this. He said, Australia is not the odd man out in Southeast Asia; we're the odd man in. And I like that. And remember too that Southeast Asia is probably the most diverse subregion in the world…for us to be in there as well – not as a member of ASEAN, but as a sort of a member of the broader family – I don't think it's too odd a fit at all.”

In terms of our value proposition, it's often been said that our sort of Western political culture and our ties to the US are a net asset for the region and seen as a net asset by those who engage with us. I think that has by and large been true. That might be changing now somewhat. But I think by and large, that sort of element of our strategic personality has long been accepted, and it's understood to be part of the package. But we are genuinely a first world country with first world offerings in services and technology, education, etcetera.

So those things are valued. The fact that we are committed to the region, I think, is valued because the United States, although it's important and seen as important, it's not been seen as a reliable ally. Whereas Australia, you know, we're not going anywhere. We're in this region for the long haul, and I think that's understood as well. So those are all positives. And I think people realize too that we mean no harm. That sounds a bit sort of maybe faint praise, but, you know, by and large, I think people do understand Australia and understand that our intentions are good even if occasionally the way we express ourselves may not always be, you know, ideal.

FUTURE ENGAGEMENT AREAS TO WATCH

ASEAN Wonk: I wanted to move the conversation forward a little bit in terms of where Australia's engagement and strategy may be headed in Southeast Asia. As we both just alluded to, we've seen a new Australian government that was just sworn in last month after the elections. And now that you're out of government, I'm wondering what you see as some of the specific next steps that Australia could prioritize in Southeast Asia – whether it's perhaps in your view unfinished business or new areas – in the coming years within, as you say, very dynamic and diverse region like Southeast Asia?

Ambassador Andrew Goledzinowski: Well, I mean, I think the political platforms are all in place. You know, we are a member in good standing of all the different groupings within the region that we might possibly want to join, and that's good. So we have the channels for dialogue and communication, etcetera.

Where we need to do more, I think – and, again, it's sort of consistent with our trajectory, but it needs to continue – is in the geostrategic defense security engagement. And I think there's a big market for that because the world and the region is becoming less certain and more complex and more dangerous, and also in the economic space for the same reasons. You know, the previous coalition government, I think, had an entirely appropriate and effective engagement with Southeast Asia. I think the current Albanese government is continuing that, but maybe with just a little bit more, I don't know, a bit more warmth. I think there's a different sort of style, which, maybe it's Penny Wong as our foreign minister, who's number three in the government and, of course, was born in Malaysia and knows the region very well. I don't know what it is, but I think it's very positive.

And so we've had this initiative as you referenced. It's called “Invested,” and the idea is too for the government to actively lead Australian business to investing in Southeast Asia. There are several difficulties. One is that we have another initiative of this government, which is called Made in Australia, which predates the new US administration's current obsessions. But it does reflect the fact that we slightly overdid the offshoring of manufacturing and the deskilling of that sector in our economy. We became effectively a resource country and a services country, and the manufacturing sort of fell away. And that has to be rebalanced. But you have this difficult dichotomy now where, at the same time, we're urging companies to invest in Australia, but also to invest offshore. And different agencies of government have the job of promoting these two sometimes inconsistent policy impulses. So we'll see how that goes. But those are the important areas.

Going back to the geostrategic again, you know, we are a growing military entity. You've seen the commitments to grow our defense budget to 2.4 percent of GDP by 2030, and we've seen the US urge us to go further than that. The prime minister has said that he's not that interested in the sort of percentage numbers. He thinks that's kind of artificial. His point is you decide what capabilities you need, and then you fund them rather than sort of working towards a number. Either way, it means that we will become an even more useful and valuable potential partner for the region than we have been. And it's not just hard power like military platforms. It's also intelligence. It's situational awareness. It's the training and cooperation we provide in areas like maritime domain awareness and maritime law. All of that, I think, is increasingly interesting for the region because they're interested in hedging. They're interested in maybe mitigating their reliance on the US, which maybe is less certain than it has been in the past.

So there's a lot of different bits and pieces there. I mentioned the universities. You know, I'm more and more convinced that the Australian university sector has a huge role to play in Southeast Asia. I think we're only just beginning to scratch the surface of what is achievable there. And it's not just the traditional model of selling education services, attracting students to come to Australia, spend three or four years here, drop a bit of money into the university coffers, and then leave again. I think it's more. It’s going to be deeper than that, and it'll include technology.

So Vietnam. I was recently in Vietnam to receive an honorary degree, and the speech I made was around the fact that Vietnam's ambition is to train 50,000 software engineers by the end of this decade and to create a genuinely competitive and viable semiconductor industry. To do that, they need a lot of help. Prime Minister Chinh has always said that there are three major hurdles for Vietnam to attain high income status. One is infrastructure, and they're working on that now. You've seen some very ambitious announcements on infrastructure, including high speed railways, etcetera. The second is technology. And, you know, one of the last important people I met in Vietnam before I left was Jensen from Nvidia. And, you know, those sorts of companies are now looking to Vietnam as a serious option. So technology can come quite fast if you've got the enabling environment. But the third obstacle, and that's where the universities come in, is training the people, and that takes years. You cannot fast track that. You know, high quality education is something which needs to be planned and rolled out over a period of time. And I think that the answer for Vietnam, for example, to kind of make that transition into a high technology future is to create an even stronger university environment where technology universities in particular come together with industry and government and create new pathways for research and training and exchange and partnership. I'm going be doing some writing about that in the next little while, but I honestly think that there are new ways to do this which have not yet been fully explored. And Australia, unless we really drop the ball, we should be at or near the front of that.

CALIBRATING REGIONAL ENGAGEMENT AND DIPLOMACY

ASEAN Wonk: Great. And you mentioned the geostrategic picture and the defense realm as well. And I did note that when Australia released its national defense strategy last year, one of the pillars there was partnerships, and Southeast Asia was placed as one of the priority regions within that. I'm wondering how you think about this notion of how Australia manages, balances, and calibrates between the various ways in which it engages in the security space. So bilateral relationships like with the Philippines, ASEAN relationships and minilaterals institutions like AUKUS and the Quad. I’ve long said there doesn't necessarily have to be a zero-sum perception between all of these various minilaterals, multilaterals and bilaterals. But there are some challenges as you know in making sure you're messaging, prioritizing, resourcing all of these mechanisms. And sometimes I feel like officials in some countries are running to all of these proliferating meetings. How do you think about this notion of how Australia calibrates, manages, and resources all of these partnerships and developments in the region in the security space?

Ambassador Andrew Goledzinowski: Well, I think….

[Note: This is the end of a free preview podcast, with the full version in an earlier post published on June 12, 2025 available to our paying subscribers. This is not meant to serve as new content and is part of our free preview content within the dedicated website podcast section].

Our guest today is Dr. Denis Hew, who spent over a decade as the director of the research arm of the Asia-Pacific Economic Cooperation forum (APEC) and also spent time before that in several other key economic institutions including the Asian Development Bank (ADB). We will start a conversation talking about the state of the regional economic architecture. Be sure to tune in to the full episode where we go through a range of other subjects, including Indo-Pacific geoeconomics, growth trajectories and what the regional, minilateral and multilateral landscape will look like into 2026.

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Note: The transcript that follows the above free clip preview has been lightly edited for clarity and organized into sections for ease of quick browsing. For all ASEAN Wonk Podcast episodes, full video and audio podcasts, along with edited and sectioned transcripts as well as block quotes, will be a premium product for our paying subscribers, but we will include a short free transcript preview and a clip for all readers to maintain accessibility. Paying subscribers can find the rest of the full transcript and the full video podcast right below the paywall. If you have not already, do consider subscribing, and, if you have already done so and like what you see and hear, do consider forwarding this to others as well who may be interested. Thank you for your support as always!

REGIONAL GEOECONOMIC ARCHITECTURE

ASEAN Wonk: So welcome to the podcast, Denis, and let's get started. I wanted to kick off with where we are in terms of the regional economic architecture. This is an architecture which, as you know having been in several of these leading institutions, went through a series of waves. In the nineties, for example, we had APEC come to the fore and there was some excitement about institutional innovation. If we skip over a few decades to the present, there's a lot more conversation about minilaterals, sectoral deals and smaller groupings. But at the same time, we still have ASEAN coming up with digital initiatives that are regionwide. That's a multilateral institution. In APEC, there are still efforts to try to revive notions like the Free Trade Agreement of the Asia-Pacific. How do you assess the role of regional economic multilateralism within this geoeconomic environment we’re in? Is there perhaps a little bit too much doom on the multilateral economic architecture than is warranted?

Dr. Denis Hew: Well, thanks for having me. I'm a pessimist at heart, but I think I can maybe share a little bit of optimism about the economic and trade architecture. As you mentioned, in the last couple of decades, in Southeast Asia and East Asia, we've seen closer economic and trade integration among these regions. And much of that has also been driven by the the establishment of global supply chains, particularly in manufacturing, electronics, semiconductors. And, of course, within ASEAN, it's been forging closer economic integration. It's got this big project, the ASEAN Economic Community (ASEAN), which was established more than twenty years ago, and they're moving forward towards their next milestone post-2025.

But we know the world's changed quite a bit, partly because of rising U.S.-China tensions, and we're beginning to see that kind of fragmentation in the global economy. There's also a lot of disappointment at the multilateral trading system at the World Trade Organization. There haven’t been many key major deliverables. The dispute settlement mechanism is still pretty stuck and not resolved. And a lot of the economic trade agreements have been protracted in trying to reach any conclusions.

“[W]e're beginning to see that kind of fragmentation in the global economy.”

So in terms of the trend as you're moving forward, you see, as you mentioned, bilaterals and economic kinds of minilaterals. A good example is DEPA, the Digital Economy Partnership Agreement (DEPA). So you've got a couple of like-minded countries which want to move forward. If they are stuck at WTO with a quest for an e-commerce agreement, and we want to move forward in terms of the digital economy, digital trade, one of the ways is to come together and try to form a partnership agreement among themselves.

The other big trend, of course, is that we're we're seeing a proliferation of free trade agreements, both bilateral as well as regional. And, of course, within this region, the big ones are RCEP, the Regional Comprehensive Economic Partnership Agreement (RCEP), which includes ASEAN and its and its five major trading partners, including China. And, of course, beyond in the Asia Pacific region, you've got the CPTPP, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). I believe it was a bit of a mouthful, but it's a reincarnation of TPP as we know, and that excludes the US, but includes some of the big and middle-sized economies. I guess the biggest challenge that we're facing here in terms of the economic architecture, particularly from the ASEAN perspective, is that ASEAN has always been known as for its strategic neutrality. It doesn't want to choose a side between US and China. We know that the US has a long presence in terms of foreign investments and technology transfers in this region. But we know that if you look at the supply chains that have been established, increasingly we see that a lot of those supply chains are linked to China. So, essentially, ASEAN member countries don't want to choose a side. What they want to do is do business with both countries. And that's one of the biggest challenges that they face right now.

“NEXT-GENERATION” GEOECONOMIC ISSUES

ASEAN Wonk: I'm glad you mentioned DEPA and some of these other sectoral, minilateral agreements because it does seem like these agreements are proliferating. You're you're seeing some in the digital space; you're seeing some on the green economy, for example. So that's a very interesting trend. One of the interesting conversations we're seeing as well is how we think about updating some of these existing agreements. So within APEC for example, they've characterized this as next-generation trade and investment issues. Things like sustainability and inclusivity. They were always there, but perhaps twenty or thirty years ago, they were not as much front and center. APEC released a report in the middle of last year, and they essentially mentioned that while there are a whole host of these next-generation issues, there hasn't really been an endorsement around areas of focus. There are still differences in views in areas like state owned enterprises, for example. How do you think about the areas that may gain traction within this basket of next generation issues?

Dr. Denis Hew: Yeah. Within APEC and also ASEAN, they've been talking about a lot of these next-generation trade and investment issues. We talk about sustainability, impact of trade from climate change and also digital trade. One of the biggest problems in APEC is that decision-making is based on consensus and because of the geopolitics of tensions between the US and China, we can't get a lot of things done. Because if you put on the table a major project looking at, say, the green economy, for example, for different reasons — nothing to do with the project itself — it could just be blocked. So over the last couple of years, we're not seeing a lot of traction in terms of building capacity and working together. And that's one of the biggest challenges. Some of the big topics that they've talked a lot about in terms of next-generation is, of course, sustainability. Increasingly, also the concerns of rising income inequality. And, in the past, we had big meetings being canceled because of demonstrations because of inequality and there's been an increased focus looking at the formulation of much more inclusive policies — social inclusion, financial inclusion, economic inclusion. So a lot of these things are being discussed.

But the biggest challenge, of course, is how do you get that implemented? And within APEC, you've got twenty one members. So getting a consensus of getting things done has become a lot harder. That's one of the reasons why you're seeing the rise of many of these minilaterals and sector-specific partnership agreements. They’re taking them out because they're stuck at WTO. They could be stuck in APEC or even ASEAN. A couple of economies coming together and moving forward, whether it's in terms of trade liberalization or opening up your markets to get things moving. And I don't see that trend subsiding anytime soon, and that's one of the biggest concerns. It's a concern partly because I'm a big supporter of the multilateral trading system. So the problem with a breakdown with the WTO is that the less developed countries will be the biggest losers because it's harder for them to do a future agreement with another country. We hope that a multilateral trading system can continue to work and that we might hopefully see some deliverables at the WTO this year.

MINILATERAL-MULTILATERAL LINKAGES

ASEAN Wonk: One of the things I mentioned earlier was this notion of the Free Trade Area of the Asia Pacific (FTAAP), where you'd see these trade agreements eventually coming together. As we think smaller with these minilateral groupings and sectoral areas, what does the grand vision actually look like? Maybe there is one; maybe not. But how do we think about the connection between these sectoral and minilateral agreements and what the broader regional vision is for everyone that's trying to work towards some of these goals?

Dr. Denis Hew: Well when it comes to minilaterals, a lot of them are WTO consistent. So the idea — or, I mean, grand plan, if you want to call it that — is that they can get an agreement done, say, in digital trade, and then if that expands, you have a large membership with more countries. DEPA is an example. Right now, it's got Chile, New Zealand, Singapore; and it’s open for more membership. And eventually, whatever agreement that they make could be taken back to the WTO, and you can restart negotiations, whether it's e-commerce or other things. So in a way, it acts as a bit of a catalyst. Now FTAAP is pretty much a grand plan, a really grand plan. I've seen that being discussed at APEC for years and years. Now the thing about FTAAP is that it's kind of a mega free trade agreement. And right at this time, I'm not too sure whether there's an appetite for yet another big regional free trade agreement. But the logic is that, from the economist's point of view, if you want to reduce trade diversion, that means that you're using a supplier with less efficiency or compared to a more efficient one, then the more members you have in a free trade agreement, the better it is. So that's why you've got an FTA. RCEP is the largest free trade agreement right now in the world. So you have these big features. You have less trade diversion, and you can facilitate an expansion of global supply chains or global value chains. So that's the general idea. So you've got these minilaterals working on one end, and you've got this big reach for the trade agreements. And hopefully, there's some kind of convergence among them. And I think that's the general sense that they have.

The biggest concern, of course, is you don't get convergence. You get this whole mixed of different kinds of trade rules, rules of origin. And in that sense, the biggest losers would be small companies. Big companies, big multinationals, no sweat for them because they've got big legal departments that can sort out the different kinds of trade rules, rules of origin, and work out which is best for them in terms of which bilateral or regional trade agreement. If you're a small- and medium-sized enterprise trying to expand your market, that's a challenge because you don't have the resources. So in that sense, it's up to governments to help them to go through all the different kinds of free trade agreements, sectoral agreements out there, and see what's best for them. Which countries they want to expand to: is it Asia? Is it Europe? Well, then you take this. Then I think you should sign up for this trade agreement rather than that one. So that's what's happening, I think, right now.

INDO-PACIFIC GEOPOLITICS-GEOECONOMICS DIVIDE

ASEAN Wonk: The other question to my mind is this notion of the Indo Pacific and how that fits in or does not fit in with the geoeconomic picture. I think if you look at it geopolitically, there's appeal to this notion of the Indo-Pacific. You have a larger role for India, the maritime connections between the Indian Ocean and the Pacific Ocean, and so on and so forth. And you have this proliferation of Indo-Pacific strategies. But if you look at the geoeconomic picture, it used to be that this was largely around the concept of the Asia-Pacific, and APEC was one manifestation of that back in the nineties. We've obviously seen some initiatives like the Indo-Pacific Economic Framework under the previous Biden administration or the ASEAN Outlook on the Indo-Pacific trying to connect the geopolitical and geoeconomic, with United Nations Sustainable Development Goals (SDGs) in there for example. Still, when I'm in conferences on geopolitics and then I switch over to ones on geoeconomic engagements, it seems like the Indo Pacific is a lot more of a geopolitical connector than it is a geoeconomic connector. How do you see the pace of adoption on the Indo-Pacific and where you see that headed in the geoeconomic domain?

Dr. Denis Hew: Well, it would have took off if the Indo-Pacific Economic Framework (IPEF) really was concluded because that would be a nice link up between IPEF and the the more strategic elements of the Indo Pacific strategy. We know that different countries have different Indo-Pacific strategies. You talked about that too, and ASEAN has its own ASEAN Outlook for the Indo-Pacific, which tries to find a way to not pick a side again. So it's got to get buy in from the US, but it's got to get buy in from China too. China is a partner of the AOIP. And that framework has a lot of potential, but right now it's not being implemented very well. I mean, it covers economic cooperation, maritime connectivity, supply chain connectivity. So on paper, it looks great, but you're right here that there's a bit of a disconnect.

More worryingly, we know what happened in 2023. There are four pillars to IPEF, and the most important pillar, which is the trade pillar, didn't work out. And so right now you've got three out of four kind of working. We'll have to wait and see what happens with President Trump, but it was an important way for the US to continue to engage regionally with the Asia Pacific region. And that would have fit nicely with the more geopolitical part of that strategy. So that's not there. So I think in that sense, you will continue to have that disconnect until the US can make some major decision or whether they want to continue with the economic part of the Indo-Pacific. And that leads to a bit of a vacuum.

In a sense, that's where China comes in. China is a member of RCEP. That's a big free trade agreement that's already being implemented since 2022. It's got an easy to use rules of origin that does facilitate regional content, global supply chains. So it's got great potential here to strengthen the existing supply chains. But you are going against this tide of onshoring, nearshoring from the US. So the challenge there is that you've got a lot of pressure from the US to force multinationals and other companies to move more of their operations to the US or near the US. And at the same time, you've got very established global supply chains that are linked to China in Southeast Asia and East Asia. So the worst case scenario is you are beginning to see a bit of that decoupling in terms of supply chains where there might be new supply chains which are exclusively linked to China through RCEP, and that could be a scenario that you’re seeing. It's not ideal in my personal view.

“So the worst case scenario is you are beginning to see a bit of that decoupling in terms of supply chains where there might be new supply chains which are exclusively linked to China…“

CHINA GEOECONOMIC “WINDOW OF OPPORTUNITY” PERCEPTION

ASEAN Wonk: You mentioned China. And as you said, there is a lot of attention on US tariff policy and the trade policy side. I'm quite struck by China's posture in all of this. We are seeing Chinese officials publicize things like a zero tariff policy towards certain countries and certain regions. You're going to see China host APEC in 2026. And, of course, China has come up with economic institutions of its own — the Belt and Road Initiative, for example, the AIIB, which, you know, has actually taken off from when we saw early US opposition. In talking to some Chinese interlocutors, I do sense that China believes there is a window of opportunity to position itself as being more proactive on trade and doing a little bit more geoeconomically and regionally in spite of the fact that it's got limitations of its own. How do you see China's inroads in this space and where do you think China's headed within this conversation in the next year or two?

Dr. Denis Hew: I think…

[Note: This is the end of a free preview podcast, with the full version in an earlier post published on May 8, 2025 available to our paying subscribers. This is not meant to serve as new content and is part of our free preview content within the dedicated website podcast section].

Our guest today is Dr. Anoulak Kittikhoun, who served as the CEO of the Mekong River Commission Secretariat from 2022 to 2024 after a decade of working in the organization that is central to the subregional architecture around one of the world’s longest and largest rivers confronting a series of major geopolitical, geoeconomic and security risks. Prior to that, he held several roles, including working at the United Nations Secretariat in New York and as an advisor at the Permanent Mission of Laos to the United Nations. We'll start our conversation assessing the current state of the Mekong River and architecture. Make sure you tune into the full episode as we dive into key topics, including the impact of intensifying geopolitical competition and major power dynamics.

To receive full ASEAN Wonk posts and support our work, consider a paid subscription for $5 a month/$50 a year through the button below. For more on pricing for institutions, groups and discounted categories, visit this page.

Note: The transcript that follows the above free clip preview has been lightly edited for clarity and organized into sections for ease of quick browsing. For all ASEAN Wonk Podcast episodes, full video and audio podcasts, along with edited and sectioned transcripts as well as block quotes, will be a premium product for our paying subscribers, but we will include a short free transcript preview and a clip for all readers to maintain accessibility. Paying subscribers can find the rest of the full transcript and the full video podcast right below the paywall. If you have not already, do consider subscribing, and, if you have already done so and like what you see and hear, do consider forwarding this to others as well who may be interested. Thank you for your support as always!

RISK ASSESSMENT CHECK

ASEAN Wonk: Welcome to the podcast Anoulak. And I wanted to get started with our conversation here talking about the river that gets a lot of attention today relative to perhaps ten or fifteen years ago, but arguably still not enough given the challenges that we're seeing. It's one of the world's longest and largest rivers running through mainland Southeast Asia. I was, in fact, just by the Tonle Sap, Southeast Asia's greatest freshwater lake in Cambodia during my trip a few weeks back. The risks from hydropower and climate change and the like have been well-documented. As a practitioner in the space, you've looked at these issues for a long time. How would you grade the state of the Mekong River today? And you can use kind of any metric you'd like, whether it's a scale of one to ten or a sort of letter grade.

Dr. Anoulak Kittikhoun: Well, first of all, thank you very much, Prashanth, for having me and this opportunity to talk to your audience about the Mekong and broader issues in the region. Well, like you said, the Mekong River, it's classified as one of the great rivers, along with the Amazon, the Nile, Mississippi, etcetera. So it is the largest, longest in Southeast Asia. It actually has the most fisheries in the world, even more than the Amazon. It’s the second most biodiverse only after the Amazon. I think top ten – it depends on how you count – in terms of basin size, flows, etcetera. Seventy million people, so sizable population. Six important countries, one superpower who is also upstream, and two regional important countries Vietnam and Thailand. And then you have Laos in the middle and Cambodia in the south, and a bit of Myanmar sort of on the side.

The Mekong Basin has caught attention in the water space, a lot in the environmental space, and sometimes in the geopolitical space, because of the fact that it is situated in mainland Southeast Asia, which is a geopolitical hotspot. But also because of its status as one of the great rivers of the world. It is very important for the economies of the basin countries. You know that Vietnam and Thailand are the two rice baskets of the world, so most of the rice come from the Mekong, and the delta of Vietnam is very important for the Vietnamese economy. It's also important for tourism. I think thirty percent of mainland Southeast Asia tourism comes from the Mekong, and it is increasingly important for energy. Laos has this ambition increasingly of being the battery of Asia – of Southeast Asia, maybe not Asia, it's too big. And Mekong energy – not just hydropower, but increasingly solar wind – are contributing to this. So it's very important for the economies of the region. And it's important for livelihoods, important for culture, history as well as for the people’s ties to the river.

But it's undergoing fundamental changes. Let me talk about the fiscal changes first. We used to have a more or less natural regime. In the wet season, you have very large flows. During the dry season, you have a very low flows, and people are used to that. But now because of, like you mentioned earlier, the building of dams – especially storage dams in China and in Laos – this has changed, and it has brought challenges as well as opportunities. Challenges, for example, during the wet season when you needed the water to flood some forest or wetlands, now you have a bit less. And in cases of drought, especially during the wet season, the storage by dams can also add or exacerbate drought. But there are some opportunities. Because during the dry season, you have a very low flow. But because dams release water during the dry season to generate electricity, then you can have possibly more water. That's good for irrigation. That's good for navigation, and that's sometimes good for drought relief during the dry season. So there are some challenges and some possible benefits.

But geopolitically is also challenging. Because it's an international river – six countries, different sizes, different stages of development. You have Thailand and Vietnam who developed parts of their base in a bit earlier, and now you have China developed in the 1990s, and now Laos and Cambodia are developing. So when you have national plans, whether they are dam projects or water irrigation projects or big canal projects, you tend to run into each other. And throughout the past decade or so, you have this contestation in the Mekong about a certain dam raising tensions with neighbors, and the possibility to have spillover effects into broader contestations and conflicts. It has not happened. I think part of the reason is we have a good institutional framework in the basin, one of which is the Mekong River Commission that I can talk a lot about, but also associated institutions. ASEAN, other Mekong frameworks, the relations between the countries, etcetera.

“And throughout the past decade or so, you have this contestation in the Mekong about a certain dam raising tensions with neighbors, and the possibility to have spillover effects into broader contestations and conflicts.”

GRADING REGIONAL ARCHITECTURE

ASEAN Wonk: You mentioned there a couple of points that I want to touch on. One is the Mekong River Commission itself and the MRC, which you helped lead. You really had a bird's eye view about how the organization works. It's an organization that, not unlike other subregional organizations, often comes under a lot of criticism for some of its limitations. It only has four of the countries as full members, and the other two are partner countries. There are some inherent limitations there. But like any regional, subregional or global organization, it is only as powerful as its members allow it to be as an intergovernmental grouping. And so, it's also a question of where the responsibility lies in terms of where the organization is headed. In your assessment, how do you see the Mekong River Commission faring – both its successes and then also its limitations – having seen its evolution throughout the years?

Dr. Anoulak Kittikhoun: Yeah. The Mekong River Commission was given a mandate in 1995 that is actually a broad mandate. It's to coordinate and promote the sustainable development of water and related resources of the Mekong Basin. So it's quite a broad mandate. It was not given a regulatory mandate like, say, some other river organizations in Europe or the European Commission. But it's given this mandate to be the coordinator, the promoter of good development. And it does that simply because the countries want to develop. The countries want to develop still, because we don't have a fully developed river yet. And it has four members. There's a whole history about why China is not a member, which I may not be able to talk about much, but it has four members – Laos, Cambodia, Vietnam, Thailand. And, in my assessment – unbiased – it has functioned to the best that it could be. So let's delve into the two key roles. One is to be some sort of water diplomacy platform of the basin. It's the only treaty-based organization in the Mekong. And second is to provide services to the country, such as river monitoring, studies, flood forecasting etcetera.

But let's delve into the water diplomacy angle. You know, as I mentioned in the beginning, we have had contestations over projects of the countries. For example, in 2010, Laos submitted to build the first mainstream then on the lower part of the Mekong – China has already built several in the upper part. Now that created a lot of tensions, including between Laos and Vietnam, who are usually friends on all sorts of things. But because for Vietnam, the delta is very important for the economy, for the people – twenty million people, right – you have to raise concerns, and you have to be fearful of that. And the countries could not agree on what to do. But at that time, with private investment ready, mostly from Thailand, Laos was determined to go ahead. And Laos being landlocked, this was one of the key resources to get the economy going and the country was determined to push ahead. But the Mekong River Commission came in, and, you know, we tried to manage this situation. There are some folks that said, okay, we have to have a more regulatory approach saying that if we could not agree, we could not go ahead. But there are some other folks who thought that, well, you know, we were never given this mandate to really say yes or no to a sovereign country's project.

So what is the next best thing to do? Well, let's help them. Let's assess from the technical point of view as best we can. If you were to go ahead, which we say is your sovereign decision, then here are several things that you need to do. Here are sort of conditions which you have to do. You have to improve the fish pass. You have to improve the dam safety. You have to improve the flow regime, making sure that you don't cause significant damage. You have to allow joint monitoring. If something bad happens, we have to come together and do something about it. So Laos accepted all that and invested additional I think half a billion dollars into the dam to make sure that this happens, while at the same time, you can say that they went ahead without full consensus. But fast forward ten years later, we have now seen the dam improve according to the technical recommendations and the transparency that brought about it. And even the Vietnamese and other international actors who were opposed initially said that that was not too bad. So that's a case of success.

And then for our services, I think we have one of the best knowledge in the world about the Mekong in the commission because of the investment that we have made into river monitoring, upgrading our models, including the latest technologies – artificial intelligence, etcetera – to be able to predict ahead when flood will come, what people should do about it. And this was put to the test last year when we had the big typhoon, Yagi, that flooded the mainstream for the first time in decades. And people appreciated the work of the Commission. So I think overall, there were some – like you said, what the countries made of it – which is their agreement or disagreement. They may probably disagree several times, but they could agree on some things, which is to still come together, to still talk, to still work it out, don't leave the table, improve the technical aspects of the cooperation, add transparency into the projects. And I think for even Laos, they went through this learning curve from being afraid of bodies like the Commission stopping their development and being more participatory in terms of sharing information, sharing data, but at the same time, determined to pursue development.

And also, there are several other cases with contestation with China, for example, that the commission stepped in and I think helped with the dialogue, with the information sharing. And recently, of course, you know, there there's a country downstream that proposed a big project. We were not as public in our diplomacy on this, but we were very active behind the scenes in terms of assessment, in terms of dialogue, in terms of quiet diplomacy. So there are several things that you do, depending on the situation, depending on views or the interests of the country, and how much they want to engage at first. But I believe that the institution of the commission is established, procedures are in place, guidelines are in place that one day or another, countries that maybe hesitate in the beginning would come back to cooperation.

And also, there are several other cases with contestation with China, for example, that the commission stepped in and I think helped with the dialogue, with the information sharing.

CAMBODIA’S BIG CHINA-BACKED CANAL PROJECT AND FUTURE PROSPECTS

ASEAN Wonk: You mentioned there Cambodia's Funan Techo Canal project, one of the projects that emerged recently with support from China. What was that project's experience and how has the Mekong River Commission dealt with it? Because that definitely was one of the cases where there were some public elements to that, but as you said, lots of quiet conversations going on as well.

Dr. Anoulak Kittikhoun: Yeah, I mean, to Cambodia's credit, they did submit the notification to the Commission, I think, in late 2023, with information about what they plan to do with the canal in terms of connecting two major rivers. One is the Mekong, one is the Bassac, and then out to the sea in the Gulf of Thailand. So, naturally, when you have this kind of plan, it invites a lot of passion. Because especially if you're downstream and you depend on the river coming upstream, if I was Vietnamese, I would also have this concern. And I look at the information that is in the public and and pronouncements around it, I would be naturally concerned because maybe I don't have as much water coming to me because of the possibility to divert and all of these things.

But after they submitted, we went to work. We reviewed the information. We requested for more information. Vietnam requested for more information. And I think at the technical level, they were very cooperative, very good discussions going on. But I think somewhere along the way, there was a determination from the top in Cambodia that this is the national interest, and for various reasons. One, I think, historical, and that we needed to do this. And we have studied. We have lined up good developers to be able to do this, and all we needed was finance. And China was sort of a key player in this. But even without China being the biggest investor, I think Cambodia would muster – at least they say, even publicly – that they would master private sector support in Cambodia itself.

But behind the scenes, we went through a bit of headache, to tell you the truth, because the space that was given to us was very limited. But we stood our ground as a secretariat, the technical and executive arm of the commission. We stood our ground and said, okay. We have a concern from the public and from a member country wanting to know more information. They never said they don't support the project. Actually, Vietnam supports Cambodia's development, they said. But they want more information. They want the commission to facilitate dialogue on this project and to do what we have done with the Lao projects and dams, which came out to be quite reasonable in terms of development, and to do the same with the Cambodian project. So behind the scenes, we did some assessment of the project, and we came to very initial conclusion about the impacts. It's not the end of the world, you know? And we quietly said this indoors behind the scenes, and that internal report is with the countries.

“But behind the scenes, we went through a bit of headache, to tell you the truth, because the space that was given to us was very limited.”

And we have several recommendations going forward, one of which is to have Cambodia provide a technical briefing to us, the commission, at that time, if we understand this correctly or not, and then to let us visit whenever they're ready. We're not going to push to visit. Whenever they're ready, we visit. And depending on particular points that are of concern, maybe we can do targeted assessment. And while they're developing the project, there's no reason to stop the project. We can do that at the same time. And in the end, we can also jointly monitor, because that gives confidence, especially to downstream countries and stakeholders that whatever you promised in the beginning that you will not cause impact will actually not happen. So this is very standard MRC business on how we do things. And so we put it out there, and I think one day, I believe that once the project really starts going, it will come back.

RIGHTSIZING CHINA DOMINANCE FEARS

ASEAN Wonk: Thanks for that overview of the challenges, processes and dynamics involved in managing all of these interests. You mentioned China a couple of times already in this conversation. The Mekong regional architecture, as you mentioned, is filled with frameworks. You’ve got ACMECS developed by Thailand, the GMS framework with the Asian Development, and you have the Mekong U.S. Partnership. And there's been a sense as well, even though there are these different frameworks, that over the past few years at least, that China's Lancang Mekong cooperation framework and China's initiatives in the Mekong more generally have come to increasingly dominate – perhaps overly dominate – the Mekong regional architecture. I'm wondering what your sense is of that sort of balance of power within the Mekong architecture, of which the MRC is a part. Is it your sense that this sense of domination by China is starting to play out in terms of the architecture?

Dr. Anoulak Kittikhoun: I mean…

[Note: This is the end of a free preview podcast, with the full version in an earlier post published on April 24, 2025 available to our paying subscribers. This is not meant to serve as new content and is part of our free preview content within the dedicated website podcast section].