As the U.S. ‘rebalances’ toward Asia and New Delhi ‘looks East,’ it’s time for Washington to help India enter APEC and integrate closely with Asian institutions

On a table in the office of a senior Indian diplomat sits an unusual piece of memorabilia: a baseball bat. It is signed not by members of the official’s favourite baseball team, but by the U.S. officials who participated in the inaugural session of the now well-established consultations between India and the United States on East Asia, in 2010. This bat and the similarly adorned cricket bat kept by the Indian diplomat’s American counterpart are an apt symbol of how the United States and India have deepened their common understanding of the strategic stakes in this critical region. Now they need to deepen their economic ties across the Pacific.

The geopolitical shifts that shaped the expanded U.S.-India relationship changed the way both related to East Asia. India’s Look East policy expressed New Delhi’s intention to expand its footprint in East Asia, after decades of thin relations with China and relative neglect of the rest of the region. India’s economic opening to the global economy made its Asian orientation a tangible reality. India has signed three free trade agreements, all with East Asian partners: Japan, Korea, and ASEAN. Participation in several ASEAN-centred institutions underscored the political dimension of India’s Asia-wide ties.

Three indicators

The Obama administration has intensified a decades-long shift toward Asia in U.S. economic and foreign policy. The heart of U.S. Asia policy traditionally lay in the military anchor in Japan, the security challenge of China, and the enormous economic relationship with both. These factors are still important. But with the “pivot” or “rebalancing” that administration spokesmen have been talking about for the past two years, look for three new markers: deeper U.S. engagement with Asian regional institutions; a modest shift in the centre of gravity of U.S. military assets toward the Indo-Pacific region; and, significantly, the decision to treat India as part of a larger Asian region, a decision made more important by the growing prominence of U.S.-India ties.

When the U.S. and India started their East Asia dialogue in 2010, both sought peace and prosperity throughout South and East Asia. They saw China as the most rapidly changing regional power, with which engagement and cooperation are essential. Neither wanted China to become the sole East Asian power centre. While neither has explicitly articulated this as policy, both would like to foster a network of strong relations among the region’s major players as China’s economic and military power expands — including India, Japan, Korea, the United States and China itself. Both seek an open, inclusive institutional architecture, and are increasingly involved with East Asian organisations, including the security-oriented ASEAN Regional Forum. Both are comfortable having ASEAN continue as the heart of most of the region’s institutions. And for both, freedom of navigation throughout the Indo-Pacific area is absolutely critical.

Freedom of navigation

After almost three years of regular consultations, we have come to expect that India and the United States will respond to regional controversies touching their strategic interests independently, but will do so in ways that reinforce each other. The South China Sea is a good example. China’s claim to control virtually the entire sea has drawn the objections of its ASEAN littoral states. China insists on dealing with the ASEAN countries separately, brushing aside their preference to work together. Within ASEAN, there have been differences over how to manage their dealings with China on this issue. The organisation, unusually, was unable to reach a consensus on a statement on the South China Sea at its July 2012 summit.

Both India and the United States have given carefully crafted support to ASEAN on the South China Sea, calling for peaceful resolution of disputes and self-restraint without taking a position on the merits of the disputes. U.S. statements have mentioned the possibility of allowing ASEAN to work as a group. The United States has endorsed the ASEAN-China Declaration on the Conduct of Parties in the South China Sea, calling it a good first step toward the code of conduct favoured by ASEAN members. India put the dispute in the context of the U.N. Convention on the Law of the Sea. Both have stressed freedom of navigation; one Indian statement noted that half of India’s seaborne trade comes through the South China Sea.

India has had its own issues in the South China Sea. China has challenged India’s drilling on an oil concession bloc awarded to it by Vietnam, and the Chinese navy has confronted or escorted Indian naval vessels passing through these waters. India made its position publicly clear; the strong U.S. position on freedom of navigation was already on record in the background. These separate but parallel policies underline the similarities between Indian and U.S. interests on regional security.

It is time to take the next step: Indian membership in Asia Pacific Economic Cooperation (APEC), the region’s broadest economic institution. When APEC was founded in 1989, India’s economic policies were inward-looking, contrasting with the organisation’s goal of “free and open trade and investment.” Since then, India’s economy has taken giant steps toward integrating with the region and the world, and its growth has rivalled, and in some cases eclipsed, that of the “East Asian Tigers.” India is now the third largest economy in Asia, and could be the second largest in another decade. APEC “economies,” in the term members prefer, have links beyond the purely governmental. APEC coordination mechanisms between economic regulators and among private companies could strengthen both India’s economic integration into the region and its export competitiveness, to everyone’s benefit. APEC includes not just East Asian economies but several trans-Pacific ones, in tune with India’s emerging interest in economic ties with Latin America.

The next move is up to Washington. The United States was for years reluctant to bring in India. APEC began a moratorium on new members around the turn of the century, but that has now ended. India, whose application got caught in the moratorium, is understandably not interested in putting forward another unsuccessful application. It is time for the United States to change its position. Like any expansion of international economic integration, membership would also involve some important policy steps for India. These would reinforce the strategic and economic interests that its Look East policy has long recognised, interests that are also foundation stones for the new relationship with Washington.

This is a worthy objective — even if Indians and Americans cannot agree on what game ought properly to be played with a wooden bat.

(Teresita and Howard Schaffer are former U.S. ambassadors, with long years of service in South Asia. They are co-founders of southasiahand.com . Howard Schaffer teaches at Georgetown University; Teresita Schaffer is a non-resident senior fellow at Brookings Institution.)