Obama heads to Asia as Clinton touts region's importance to US

Secretary of State Hillary Rodham Clinton (Getty Images)

Secretary of State Hillary Clinton reached out to China and touted Asia's importance to US growth in mapping out a foreign policy focused more on economic strength than military might.

President Barack Obama arrives Sunday in Southeast Asia for a three-day visit during which he will attend a regional summit and become the first sitting U.S. president to visit Myanmar, formerly known as Burma. The trip signals the United States' increased focus on Asia with the conflict in Iraq over and the war in Afghanistan winding down, Clinton said Saturday in Singapore.

"Why is the American president spending all this time in Asia so soon after winning re-election?" Clinton said, according to the transcript of a speech she gave as part of her third trip to the region since July. "Because so much of the history of the 21st century is being written here. America's expanded engagement in the region represents our commitment to help shape that shared future."

Obama's first foreign trip since his re-election comes in the middle of negotiations with Congress to avoid automatic spending cuts that would shock the economy and reduce defense spending. Clinton sought to reassure leaders in Asia that U.S. lawmakers would reach a deal to "once again prove the resilience of our economic system and reaffirm America's leadership in the world."

Obama arrives in Thailand Sunday and meets with Prime Minister Yingluck Shinawatra, whose government announced this week it would look into becoming the 12th country to join the Trans-Pacific Partnership, Obama's top trade priority and one that includes four other members of the Association of Southeast Asian Nations. The next day he visits Myanmar before joining a series of ASEAN-organized meetings in Phnom Penh, Cambodia.

Clinton encouraged China and other Asian countries to join the 11-country Trans-Pacific Partnership, which she said the United States would combine with other regional trade agreements to reshape global commerce.

"We continue to consult with Japan, and we are offering to assist with capacity building so that every country in Asean can eventually join," Clinton said. "We welcome the interest of any nation willing to meet the 21st century standards of the TPP — including China."

The trade agreement is part of a U.S. strategy to focus more on using its global resources to benefit its economic interests. The United States will use its diplomats at more than 270 embassies and consulates to advocate for firms such as Chevron, Boeing and General Motors, Clinton said.

"For the first time in modern history, nations are becoming major global powers without also becoming global military powers," Clinton said. "So to maintain our strategic leadership in the region, the United States is strengthening our economic leadership as well. And we know that America's economic strength at home and our leadership around the world are a package deal."

ASEAN is set to start talks on Nov. 20 on a trade area rivaling the Trans-Pacific Partnership that combines the bloc's separate agreements already signed with China, Japan, India, South Korea, and Australia and New Zealand.

Indonesia, Southeast Asia's biggest economy, will be putting all its "energy and resources" on the Asean-led deal, Trade Minister Gita Wirjawan told reporters Saturday in Phnom Penh. Indonesia's government is unsure the Trans-Pacific Partnership would benefit the country, he said.

China's disputes with Japan, the Philippines and Vietnam over contested islands may thwart talks on the Asean-led trade deal, which includes an area with more than 3 billion people accounting for about a quarter of the world's gross domestic product. The territorial spats are likely to surface at the East Asia Summit, where Obama will meet with Chinese Premier Wen Jiabao, Japanese Prime Minister Yoshihiko Noda and other leaders.

China has demanded that Japan withdraw from its September purchase of the islands, known as Senkaku in Japan and Diaoyu in China. Anti-Japan protests have reduced China sales at Toyota Motor, Nissan Motor and Honda Motor.

"China has huge stakes in the South China Sea," the official Xinhua News Agency cited Vice-Foreign Minister Fu Ying as saying Sunday. "While having some outstanding issues, the Asian region has maintained peace and stability in general," she said, according to the report.

Indonesia proposed establishing a hotline between China and other claimant states to prevent disputes from escalating. Chinese and Philippine vessels squared off earlier this year over the Scarborough Shoal, a land feature in the South China Sea claimed by both countries.

"It's just a commitment to communicate whenever the situation requires it," Indonesian Foreign Minister Marty Natalegawa said in an interview Saturday. "I know it sounds very basic, but it is one quality that is often missing when an incident takes place or occurs. Instead of communicating, we tend to withdraw into our own shells."

ASEAN is urging China to start negotiations on a code of conduct in the South China Sea, which the region's biggest economy has resisted since July. The bloc has sought to mend differences over how to handle disputes in the waters that were exposed at a July meeting when countries failed to agree on a communique for the first time in ASEAN's history.

"The challenges are getting much closer to home, affecting confidence, having some implications of foreign investment coming in, concern about the safety, concern about the free access, concern about the energy security," Surin Pitsuwan, ASEAN's secretary-general, told reporters Saturday. "All these things I think are putting a sense of urgency on all the ASEAN countries that we should move in the same direction. And ASEAN will coordinate, will discuss, will liaise with China effectively moving forward."

Clinton said the United States is pushing for American companies to have a level playing field with China's state-owned enterprises in negotiations on a bilateral investment treaty. The State Department is set to release a study on state capitalism in the next few weeks that will include recommendations for countering unfair advantages, she said.

"I hear it over and over when I travel: 'Where are the American businesses?'" Clinton said. "At a time when America's domestic growth depends more than ever on our ability to compete internationally, this has to change."

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With assistance from Margaret Talev in Washington, Linus Chua in Singapore and Bloomberg staff in Beijing.