US Approaches to the Trade-Security Nexus in East Asia: From Securitization to

Resecuritization
Author(s): Min Gyo Koo
Source: Asian Perspective , Jan.-Mar. 2011, Vol. 35, No. 1 (Jan.-Mar. 2011), pp. 37-57
Published by: {lrp}

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Asian Perspective 35 (201 1), 37-57

US Approaches to the
Trade-Security Nexus in East Asia:
From Securitization to Resecuritization

Min Gyo Koo

In this article I explore why US approaches to the trade-security

nexus in postwar East Asia have unfolded in three critical stages: se-
curitization , desecuritization, and resecuritization. During the Cold
War, security considerations overshadowed America's economic in-
terests in East Asia under the San Francisco alliance system. Yet two
external shocks in the 1990s - the end of the Cold War and the out-
break of the Asian financial crisis - reversed the trend, placing eco-
nomic considerations at the forefront of the trade-security nexus.
In the aftermath of the September 1 1, 2001 , terrorist attacks, trade
was subordinated to security concerns. This analysis demystifies the
realist illusion that the United States has always securitized its trade
relations with East Asia. It also challenges the liberal notion that
closer economic interdependence has reduced the chances of mili-
tary conflicts. The study concludes that the current resecuritization
of America's trade relations with its East Asian allies stands on shaky
ground and that the latest global economic slump is likely to fur-
ther weaken the US effort to reconnect the ties between trade and
security. Keywords: East Asian security, US foreign policy in East Asia,
September 1 1 terrorist attacks.

The possible connection between trade and security has attracted

extensive scholarly attention in the fields of international relations
and international political economy. Their causal links are neither sim-
ple nor self-evident because international trade creates security ex-
ternalities, both positive and negative, that are not intended, expected,
or even considered. Interest in regionalism in East Asia is surging,
and East Asia scholars have recently joined the debate. For them,
many contemporary East Asian free trade agreements (FTAs) aim to
secure wider foreign policy and strategic objectives rather than purely
economic goals.1

37

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38 US Approaches to the Trade-Security Nexus in East Asia

In particular, there is a growing body of literature on "security-

embedded" or "securitized" FTAs in East Asia. Richard Higgott de-
fines securitization as a process in which "an issue is framed as a
security problem." For him, economic policy is often subsumed
within the wider context of security agendas rather than existing in
two parallel policy areas (Higgott 2004). According to Barry Buzan,
Ole Waever, and Jaap de Wilde, securitization "is the move that takes
. . . [foreign economic policy] beyond the established rules of the
game and frames the issue as either a special kind of politics or as
above politics" (Buzan, Waever, and de Wilde 1998, 23). From this
perspective, it would indeed be surprising if countries sought such
trade agreements devoid of any political-security calculations and if
such agreements did not have international political-security conse-
quences (Harris and Mack 1997; Shirk and Twomey 1997; Aggarwal
and Urata 2006; Taylor and Luckham 2006; Solis and Katada 2007;
Aggarwal and Koo 2008; Capling 2008; Mochizuki 2009).
The aim of this study is to explore the changing relationship be-
tween trade and security in postwar East Asia at three critical turning
points, focusing on the varying US positions on, and approaches to,
the region. The United States is the most obvious case where FTAs
with its East Asian trading partners are increasingly being used to re-
inforce strategic relationships. This trend in US trade policy has
gained momentum in the wake of the September 1 1 , 2001 , terrorist at-
tacks when the George W. Bush administration turned to FTAs as a
way to buttress US relations with key friends and allies in the region.
In response, some East Asian countries have also been drawn into the
use of FTAs to serve wider foreign-policy objectives. The Association
of Southeast Asian Nations-China FTA (ACFTA) is a good example
of a security-embedded trade deal among East Asian countries (Kwei
2006). China's rapid rise has raised fears about its intentions in the re-
gion and its likely foreign-policy objectives. In order to diminish con-
cern about its rise, China has chosen to use not only purely security
forums like the ASEAN Regional Forum (ARF) and the Shanghai
Cooperation Organization (SCO) but also economic and other soft in-
stitutional mechanisms - such as the 2002 Code of Conduct in the
South China Sea and the 2003 Treaty of Amity and Cooperation
(TAC) with ASEAN (Association of Southeast Asian Nations)
(Yahuda 2003; Shambaugh 2004; A. Goldstein 2005).

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 Min Gyo Koo 39

At a glance, the United States has always securitized its trading

relations with East Asia. Major countries in the region have also
begun to pursue FTAs for a variety of strategic and diplomatic pur-
poses, from confidence building among countries with little contact
with one another, to winning diplomatic points over regional rivals,
to establishing an international legal personality, to locking extrare-
gional powers - such as the United States and the European Union
(EU) - into the region. If we look beneath the surface, however, the
US approaches to the trade-security nexus have unfolded in three crit-
ical stages: securitization , desecuritization, and resecuritization. For
a long time during the Cold War period, security considerations over-
shadowed US commercial interests under the San Francisco alliance

system. Yet two external shocks in the 1990s - the end of the Cold
War and the outbreak of the Asian financial crisis - reversed the trend,
placing trade policy at the forefront of the trade-security nexus. In the
aftermath of 9/11, we have seen another dramatic change in Ameri-
can foreign policymaking in favor of embedding trade to security.
The 2008-2009 global economic slump presents a test for the sus-
tainability of the new trade-security nexus led by the United States.
The remainder of this article consists of four main sections and a
conclusion. The following section reviews the realist-liberal debate
about different aspects of the trade-security nexus. Then I explore se-
curity-embedded trade relations between the United States and its
East Asian allies during the Cold War. The next section investigates
the desecuritization of US trade policy toward East Asia against the
backdrop of fair-trade ideas in the 1990s. The last topical section ex-
amines the Bush administration's effort to resecuritize US trade rela-
tions in the post-9/11 world. The analysis demystifies the realist
illusion that the United States has always securitized its trading rela-
tions with East Asia during the postwar period. The article also chal-
lenges the liberal notion that closer economic interdependence would
reduce the chances of military conflicts throughout the world. The con-
clusion is that the current resecuritization of America's trade relations

with its East Asian allies stands on shaky ground and that the latest
global economic slump is likely to further weaken the US effort to
reconnect the ties between trade and security across East Asia. The
ability, as well as the willingness, of the United States to shoulder the
burden of growing trade deficits with the region is decreasing.

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40 US Approaches to the Trade-Security Nexus in East Asia

The Realist-Liberal Debate

About the Trade-Security Nexus

Much of the literature on international political economy has focused

on the ways in which trade and security goals interact with each other.
At bottom, international trade creates security externalities, either pos-
itive or negative, that were not originally intended. Yet uncovering
the security logic of a country's trade policy is not always an easy
task because the causal links are neither simple nor self-evident. The
dual aspect of the trade-security nexus has thus been a source of con-
siderable scholarly debate between realists and liberals.
At one extreme, realists argue that state actors under anarchy must
worry that others will gain more from cooperation than they will, be-
cause those relative gains might later be turned into a military ad-
vantage (Grieco 1990). As Kenneth Waltz notes, interdependence not
only fails to promote peace, but actually heightens the likelihood of
conflict because interdependence tends to foster asymmetric depen-
dence and inequality between trading partners (Waltz 1970). It is most
likely that asymmetric dependence confers unequal power on the less-
dependent country, whose advantageous bargaining position may be
used to gain economic or political concessions. It is also probable that
asymmetric interdependence will foster aggressive action by the more-
dependent country, particularly when its leaders attempt to divert pub-
lic frustration and aggression toward an outside target (Gasiorowski
1986; Heidt 2003).
Under these circumstances, states may choose to trade with al-
lies in order to avoid granting the gains from trade to adversaries. As
Joanne Gowa aptly points out, power politics is an inexorable ele-
ment of any agreement to open international markets, because of the
security externalities that international trade produces by enhancing
the potential military power of any country that engages in it (Gowa
1995, 6-7). For her, trade with an ally makes both parties stronger,
whereas trade with an enemy creates negative security externalities,
or what she calls a "security diseconomy." By arguing that the secu-
rity externalities created through international exchange affect the
willingness of countries to adopt free trade, Gowa supports a realist
view of the subordination of trade to security.

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 Min Gyo Koo 41

The hegemonie stability theory provides a realist solution to ex-

ternality problems. In both its political and economic variants, the
theory argues that, because international free trade is a public good,
it requires the existence of a nonmyopic hegemonic power to articu-
late and enforce the rules of interaction among the most important
members of the system. To be a hegemon, a state must have three at-
tributes: the capability to enforce the rules of the system, the will to
do so, and a commitment to a system that is perceived as mutually
beneficial to the major states (Kindleberger 1973; Gilpin 1975).
The properties and problems of public goods present the theoret-
ical foundation of hegemonic stability theory. In contrast to private
goods, public goods are nonrival and nonexcludable in consumption.
That is, any individual's consumption of these goods does not pre-
vent others from consuming the same goods, and no one can be ex-
cluded or prevented from consuming such goods, whether or not he
or she has paid for them. Therefore, rational actors face a collective-
action dilemma and thus have an incentive to free ride rather than to
assume any of the cost of the goods' supply. The classic representa-
tion of the provision problems for public goods is the n-person pris-
oner's dilemma. In such cases, cooperation can potentially help all
players, but actors have a dominant strategy to defect, and the goods
may not be provided. If states locked into an international free-trade
prisoner's dilemma are to escape their dilemma, Kindleberger argues
that there must exist a hegemon who has an incentive to provide the
collective goods even if it has to bear the full burden of providing it
itself.

Some critics of hegemonic theory argue that collective-action

problems can be resolved if there exists a "k," or subgroup, of actors
who would profit by doing so even if only its members absorb the
costs involved. As Robert Keohane notes, the "theory of collective
goods does not properly imply that cooperation among a few coun-
tries should be impossible. . . . Logically, hegemony should not be a
necessary condition for the emergence of cooperation in an oligopo-
listic system" (Keohane 1984, 38). Alternatively, he argues that when
shared interests are sufficiently important and other key conditions
are met, international cooperation can emerge and regimes can be cre-
ated without a hegemonic power (65-84).

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42 US Approaches to the Trade-Security Nexus in East Asia

In a similar vein, advocates of the power of interstate economic in-

teractions maintain that as countries become increasingly interdepen-
dent both economically and institutionally, their motivations to engage
in conflicts with one another are reduced. In effect, economic inter-
dependence builds trust among otherwise skeptical economic partners,
in addition to making military conflicts too costly (Doyle 1997, 233-
234).2 Norman Angeli, who argued that war, by destroying trade ties, is
commercially suicidal, restated this view in the early twentieth century
(Angeli 1910). Theories about complex economic interdependence car-
ried such integration arguments one step further (Keohane and Nye
1977). Richard Rosecrance argues that modern conditions push states
to be "trading states" rather than "territorial states" obsessed with ter-
ritorial expansion (Rosecrance 1986). Though not all contemporary ad-
herents of liberal peace go as far as Kenichi Ohmae, who asserts that
the world is now "borderless" (Ohmae 1990), it is commonly accepted
that territorial borders are declining in economic significance (Strange
1996). This literature is concerned with the conceptual and practical
linkages between trade and security, and much of it argues that a high
level of commercial interdependence reduces the likelihood of inter-
state conflict. In many respects, this type of trade-security relation-
ship - the subordination of security policy to commercial policy - was
the dominant feature of the 1990s, the era of neoliberal globalization.
As elsewhere in the world, the trade-security nexus has varied
over time in East Asia. The realist perception was prevalent during the
Cold War period, when security considerations overshadowed, if not
totally supplanted, trade interests. Yet two external shocks in the
1990s - the end of the Cold War and the outbreak of the Asian finan-
cial crisis - reversed the trend, placing trade issues at the forefront of
the trade-security nexus. Most notably, America's strategic goals were
redefined in geoeconomic terms rather than purely geostrategic terms.
The United States now became a champion of the fair-trade idea that
no countries should assist their own industries or interfere with con-
sumer market preferences to a greater extent than is done in the
United States. Much of its energy was directed to what critics have la-
beled "aggressive unilateralism": negotiations aimed at opening spe-
cific foreign markets under threat of closing the US market (Bhagwati
and Patrick 1991). We have seen another dramatic change in the trade-
security nexus in foreign policymaking, in favor of embedding trade

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 Min Gyo Koo 43

in security, particularly by the United States post-9/1 1. The following

sections explore how the dynamic nexus between trade and security
in East Asia has unfolded in three critical phases: securitization dur-
ing the Cold War period, desecuritization in the 1990s, and resecuri-
tization in the post-9/11 period.

Security-Embedded Trade Relations

During the Cold War Period

Security problems within East Asia arise when global and regional un-
certainties and competitions meet. East Asia was always at the cross-
roads of Cold War tensions between the United States and the Soviet
Union. At the outset of the Cold War, tense geostrategic circumstances
and historical animosities shaped unique institutional pathways for East
Asian countries to manage their trade and security ties. In the virtual ab-
sence of an alternative mechanism at the regional level, trade and se-
curity relations were governed through a combination of US-centric
bilateral and multilateral arrangements and informal networks based
on corporate and ethnic connections in the economic arena (Cumings
1997; Grieco 1997; Katzenstein 1997; Aggarwal and Koo 2008).
The San Francisco system, codified largely through the 1951
San Francisco Peace Treaty between the Allies and Japan, provided
East Asian countries with a unique institutional mix of bilateralism
and multilateralism (Calder 2004, 138-140). 3 In pursuit of security-
embedded economic stability, the system offered America's East Asian
allies access to the US market in return for a bilateral security alliance
with the United States. Alliances in East Asia tend to be bilateral,
leaving security coordination at the minilateral level underinstitu-
tionalized. Together with large US military forces stationed in Japan,
South Korea, the Philippines, South Vietnam, and Guam, these bilat-
eral security treaties became the backbone of the US hub-and-spokes
strategy to contain communist forces in East Asia. The United States
also encouraged East Asian countries to participate in broad-based
multilateral forums in trade - for example, the General Agreement on
Tariffs and Trade (GATT) - and security - for example, the United Na-
tions - both of which were underwritten by US hegemony (Aggarwal
and Koo 2008, 3-4).

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44 US Approaches to the Trade-Security Nexus in East Asia

The United States was willing to provide global public goods be-
cause it considered these trade and security institutions as beneficial
to its own national and strategic interests. However, the United States
also defined "its interests broadly and in a sufficiently inclusive man-
ner that other countries felt able to sign on to a vision that stressed the
importance of due process and the rule of law" (Higgott 2004, 158).
This system, which proved relatively beneficial for most East Asian
countries, created few incentives for them to develop exclusively re-
gional trade arrangements until the end of the Cold War. At the same
time, bitter memories of Japanese and Western colonialism, hetero-
geneous policy preferences and strategies, and cultural diversity also
reinforced the bias against formalized regional organizations (Ag-
garwal and Koo 2008, 3-7).
It is no coincidence that East Asia lacked the equivalents of the
EU in economic issue areas and the North Atlantic Treaty Organiza-
tion (NATO) or the Organization for Security and Cooperation in Eu-
rope (OSCE) in security. In particular, the United States was relatively
passive; it was more concerned about how transregional security in-
stitutions such as NATO and the OSCE might constrain US military
forces and weaken bilateral alliances in East Asia. For its part Japan,
although an early proponent of regional security dialogues, shied
away from pushing hard for more substantive discussions and nego-
tiations. China obstructed any moves in this direction for fear of in-
ternational intervention and pressure on its domestic affairs, such as
human rights and civil justice (Job 2003).
The same was true in the trade issue area as many proposals for
more exclusive East Asian trading blocs - such as the Pacific Free Trade
Area (PAFTA), the Pacific Trade and Development Conference (PAF-
TAD), the Organization for Pacific Trade and Development (OPTAD),
and the Pacific Economic Cooperation Conference (PECC) - largely
failed (Katzenstein 1997, 16-18). Since its creation in 1967, ASEAN
has shown a certain degree of institutional capacity in security and trade
matters. However, it remains an inherently modest organization with
only scattered signs of institutional deepening and widening. Established
in 1989, the Asia-Pacific Economic Cooperation (APEC) forum remains
an essentially consultative body, with most members continuing to pre-
fer loose family-type linkages to more formal institutional structures
(Aggarwal and Morrison 1998; Ravenhill 2000; Tsunekawa 2005).

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 Min G yo Koo 45

During the Cold War period, the GATT was East Asian countries'
primary provider of trade liberalization. To the extent that this global
multilateral institution required membership, trade liberalization
under the auspices of the GATT was multilateral club goods. How-
ever, it contained strong public goods characteristics because East
Asian countries were allowed to pay less to get more out of the sys-
tem. Of course, this trade-off was made possible because the United
States as the key stakeholder of the global trading regime tolerated
East Asian countries' free riding for strategic reasons. In the security
realm, the San Francisco system provided East Asian countries with
security as bilateral club goods, made available through their alliances
with the United States or the Soviet Union, but the provision also con-
tained strong public goods characteristics because the costs and ben-
efits from the alliances were skewed in favor of the two superpowers'
respective East Asian allies (Aggarwal and Koo 2008, 18).
In sum, the San Francisco system served much - if not all - of
East Asia well for the postwar era by obviating the need for any sig-
nificant regional arrangements to manage trade and security relations.
As posited by realists, security considerations were an inexorable el-
ement of the ways in which East Asian trade was conducted - that is,
the subordination of trade to security. The institutional mix under the
San Francisco system was a by-product of security-embedded trade
relations underwritten by US hegemony.

Desecuritization of Trade Relations in the 1990s

The mix of bilateral and multilateral institutions and the subordination

of trade to security under the San Francisco system began to face se-
vere challenges at the dawn of the 1990s, a decade that started with
the end of the Cold War and ended with the Asian financial crisis.

The end of the Cold War visibly weakened the US and Russian in-
fluence in the region, while strengthening the strategic position of
China. Furthermore, as T. J. Pempel aptly puts it,

America's strategic goals were subtly redefined in geo-economic

terms as opposed to geo-strategic terms, largely as a function of the
Clinton administration's concentrated focus on advancing the process

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46 US Approaches to the Trade-Security Nexus in East Asia

of globalization and trade liberalization and the Clinton administra-

tion's underlying conviction that economic growth and closer eco-
nomic interdependence would go a long way toward reducing the
chances of military conflicts throughout the world. (Pempel 2008, 6)

It was not a coincidence that President Clinton said, "Ultimately,

the best strategy to ensure our security and to build a durable peace
is to support the advance of democracy elsewhere. Democracies don't
attack each other. They make better trading partners and partners in
diplomacy" (Clinton 1994).
This sudden shift in America's strategic calculations of economic
relations put greater and more pointed market-opening pressure on
its East Asian allies. They had focused on rapid growth that relied on
import protection, industrial policy, and export promotion as a central
component of economic prosperity under America's nuclear umbrella.
In promotion of the fair-trade idea, the Clinton administration adopted
an aggressive approach to pry open East Asia's traditionally protected
markets. Although US alliance relations remained fundamentally in-
tact, the separation of trade and security policy was clearly manifested
in a series of trade disputes between Washington and its East Asian al-
lies (J. Goldstein 1988; Tyson 1990; Irwin 1997; Conti 1998). East
Asian countries thus had to shoulder more of the burden of main-
taining the global trading regime.
This trend became more evident in the aftermath of the Asian fi-
nancial crisis, which had a profound impact on the way in which East
Asian countries perceived the global and regional economic institutions.
For many East Asian countries, the United States was no longer a benign,
nonmyopic hegemon that was willing to provide public goods, economic
and military, free of charge. As pointed out by Heribert Dieter, many in
East Asia began to hold the perception of being pushed away by the so-
called Washington Consensus, which aggressively promoted the poli-
cies of deregulation, privatization, and liberalization as the prerequisites
for economic development (Dieter 2009, 76).
Except for China, East Asian countries benefiting from the seem-
ingly endless export boom of the 1980s and early 1990s began to face
problems in the mid-1990s. At the end of 1995 the trade triangle that
had linked Japanese (and overseas Chinese) capital, developing East

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 Min Gyo Koo 47

Asian manufacturing capacities, and the US market appeared to be in

trouble. Among others, Indonesia, Thailand, and South Korea were
severely hit. The unsuccessful defense of their plunging currencies
promptly depleted their foreign reserves, forcing them to turn to the
International Monetary Fund's (IMF's) $100 billion rescue loans to
shore up their finances. Yet, the IMF loan package developed into a
regionwide resentment of the Washington-dominated agency (Pempel
1999; Wade 2000). With traditional mechanisms in the GATT/WTO
(GATT/World Trade Organization) offering no salient solutions, the
perceived injustice or unfairness of the global financial architecture
enshrined in the IMF made it politically easier for the leaders of cri-
sis-ridden countries to seek regional solutions. One major option for
the affected countries was to secure preferential access and create a
more diversified export market.4
At the end of the 1990s US foreign economic policy toward East
Asia became more ambivalent about the regional attempt to create
exclusive trading agreements. In the early 1990s the proposal of an
East Asian Economic Group (EAEG) by former Malaysian prime
minister Mohamad Mahathir faced strong US opposition, owing to
fears that an exclusive regional bloc could undermine the leadership
role of the United States and foster a split between East Asia and
North America. However, the United States did not immediately re-
ject FTAs initiated by East Asian countries in the aftermath of the
Asian financial crisis, presumably because it saw little strategic ben-
efit to weaving the web of FTAs with East Asian countries.
To summarize, during the Cold War years, security cooperation
with the United States was accompanied by strong economic ties with
the US market that, for most East Asian economies, was the single
most important foreign market. However, this arrangement came
under heavy pressure in the 1990s. Many East Asian countries sud-
denly realized that they were no longer receiving substantial eco-
nomic support from the United States and that they were in fact being
prodded by "America's 301 trade policy" to liberalize their markets
(Bhagwati and Patrick 1991). America's desecuritization of trade pol-
icy became much more evident when it chose to use the Asian finan-
cial crisis as an opportunity to push for neoliberal policy reforms in
the economies of its long-standing trading partners.

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48 US Approaches to the Trade-Security Nexus in East Asia

Resecuritization of Trade Relations

in the Post-9/11 World?

The Bush Strategy

In the post-9/1 1 era, the fissure in the San Francisco system has be-
come more apparent, primarily due to changes in Washington's alliance
policy. With its counterterrorism initiatives the Bush administration
reconfigured the United States' traditional security policy in East Asia
for strategic and logistical reasons, while soliciting multilateral co-
operation against terrorism and scaling down its forward deployment.
In order to maintain its strategic strength despite a smaller physical
presence, Washington urged its East Asian allies to expand their re-
gional security missions, leading to a number of regional cooperation
initiatives.
The United States still controls a substantial share of global
power, economic and military - more than any other countries. Ac-
cording to Richard Higgott, the elements of the unprecedented US
military preponderance are identified as a strange and paradoxical
combination of liberal and idealist fundamentalism, which can in turn
be defined as "concerted unilateralism" (Higgott 2004, 148). For him,
therefore, the implication of this combination of American ideas and
contemporary power was leading to the "securitization of globaliza-
tion." That is, the Bush administration "securitized" the neoliberal
economic agenda and its foreign economic policy in the context of
its changing view of sovereignty and security in contemporary global
affairs.
Indeed, the US trade policy under the Bush administration changed
dramatically in the post-9/11 world and in turn became the driving
force behind the changes in global trade dynamics under the rubric of
"competitive liberalization." President Bush's first chief trade policy-
maker, US trade representative (USTR) Robert Zoellick, articulated
a trade policy orchestrated around competitive liberalization, in which
global, regional, and bilateral trade negotiations would complement
and reinforce each other (Zoellick 2001). In justifying this approach,
Zoellick and his trade officials articulated four categories of national
interests: (1) creating "asymmetric reciprocity" that advantageously
opens markets for US traders and investors, (2) establishing precedents

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 Min Gyo Koo 49

and models that serve as catalysts and benchmarks for broader trade
agreements, (3) rewarding and supporting domestic market-oriented
reformers and advancing democratic institutions, and (4) strengthen-
ing strategic partnerships by allying with a regional leader going be-
yond cost-benefit calculation of trade liberalization. Trade would be
used as an instrument to influence the balance of power within states
and affect processes of political and economic change (Feinberg 2003,
1019-1020).
Most notably, the Bipartisan Trade Promotion Authority of 2002
enacted by Congress was a watershed for the Bush administration to
end the eight-year lack of fast-track authority to conclude trade agree-
ments with a simplified ratification procedure. In this legislative pro-
cedure, Congress set formal negotiating goals for major trade
agreements. Congress agreed, first, to vote on the results of the ne-
gotiations and the proposed implementation of legislation, and sec-
ond, to vote only on the agreement as a whole, without amendments
and within a limited time period (Chan 2005). The Bush administra-
tion used the authority to pursue a parallel track of preferential and
multilateral trade negotiations, while implicitly securitizing the neo-
liberal economic agenda and its foreign economic policy goals.
Zoellick had long seen trade agreements as having geopolitical as
well as trade significance. This view clearly found resonance in the
Bush White House. The Bush administration explicitly reminded
countries that contemplated an FTA with the United States of the
strong connection between security and economic cooperation. In
2003 the United States completed FTAs with Chile and Singapore,
which Congress passed by substantial margins. FTAs with Australia
and Morocco were completed thereafter - and approved by Congress
in July 2004. A Central American Free Trade Agreement (CAFTA)
was completed in late 2003, and the Dominican Republic was added
in 2004. Talks were also initiated or ongoing with a range of others, in-
cluding Bahrain, the countries of southern Africa, Thailand, Panama,
and the Andean countries of Colombia, Peru, Ecuador, and Bolivia
(Destler 2005, 299). In sharp contrast, New Zealand was excluded
because of its long-standing refusal to welcome US vessels that might
be carrying nuclear weapons. And the signing of the final agreement
with Chile was delayed because that nation had failed to give clear
support to a US-British resolution authorizing war with Iraq. The

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50 US Approaches to the Trade-Security Nexus in East Asia

United States turned aside a Taiwanese request for an FTA because

such an accord would jeopardize Sino-US strategic relations (Chan
2005; Destler 2005, 300).

Unintended Consequences

For some critics, heightened US national security concerns have had

direct and indirect effects that are deleterious to the multilateral trad-
ing system because security concerns have led to an embrace of bi-
lateralism that bears little relation to US commercial interests and will
arguably detract from ongoing efforts at multilateral trade liberaliza-
tion (Ludema 2007, 1210). In the East Asian context, however, the
evidence is mixed as to whether America's economic and security po-
sition has been strengthened in the region by reconnecting trade and
security issues. The United States has only been able to conclude two
bilateral FTAs thus far in East Asia: with Singapore and South Korea.
Singapore considered the security factor as the single most im-
portant motive for entering an FTA with the United States in 2003,
while it considered economic benefits of the agreement insignificant
due to its traditional openness and the small size of its economy. At
the same time, Singapore has approached China both economically
and diplomatically so that the US-Singapore FTA would not irritate
Beijing. As a result, Singapore and China have made a conscious ef-
fort to improve their political and economic relations in recent years.
Singapore's dual approach to the United States and China shows the
changing nature of the trade-security nexus in East Asia (Pang 2006).
The South Korea-US FTA (KORUS FTA), which was concluded
on April 1, 2007, shows how countries can simultaneously, albeit im-
plicitly, pursue economic benefits and strategic interests in trade ne-
gotiations. In addition to the goal of maximizing the gains from trade
and investment, South Korea wanted to hedge against the growing
strategic uncertainties in Northeast Asia by cementing its economic
ties with the United States, while the United States realized that an
FTA with South Korea would give Washington a strong foothold to
maintain its strategic and economic presence in the region (United
States Trade Representative 2007; Heo 2008; Koo 2009, 190-191).
However, since the signing of the agreement, the two governments have
struggled with a tough legislative ratification process. Among others,

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 Min Gyo Koo 51

beef and automotive trade are bones of contention. Such a delay in the
ratification phase illustrates that the United States is still under the
influence of fair-trade ideas from the 1990s. It also shows that the ad-
ministrative effort at resecuritization of trade policy is not fully sup-
ported by its legislative counterpart.
Responding to criticisms that the United States may be distracted
with the war on terrorism, while China was heavily investing diplo-
matic and economic capital in Southeast Asia, the Bush administra-
tion in November 2005 announced a joint vision statement on the
ASEAN-US enhanced partnership and agreed in principle to start ne-
gotiating an ASEAN-US trade and investment facilitation agreement.
In addition, the United States began to pursue FTA projects with in-
dividual ASEAN countries: Malaysia and the Philippines (in late
2002) and Thailand (in July 2003). For the United States, it was par-
ticularly important and timely to engage ASEAN countries individu-
ally and collectively as well because it would help shape ASEAN
initiatives for East Asian regionalism so that they would not weaken
US influence in the region (Mochizuki 2009, 62).
Nevertheless, the US effort has not been fruitful in Southeast
Asia. Furthermore, by reducing the number of potential candidates
for an FTA, the United States has in fact undermined its own strategy,
while allowing its strategic rival, China, to embrace a region that hith-
erto had been very reluctant to develop deep ties with Beijing. As a
result, the current resecuritization of America's trade relations with its
East Asian allies remains incomplete.
To summarize, security considerations have been a significant fac-
tor behind the US trade policy as well as affected East Asian countries
in recent years. When seen from the US perspective, the linkage is
clearly defined in those obvious examples of resecuritization of trade
policy. However, it is too early to conclude that the trade-security
nexus is as tight as the one seen during the Cold War period, mainly
because it is not clear whether and to what extent the United States is
willing to provide public goods. Ironically, the proliferation of FTAs
indicates the erosion, not the strength, of US power (and the San Fran-
cisco system). The latest global economic slump is likely to further
weaken the US effort to reconnect the ties between trade and security
across East Asia, as its ability, as well as willingness, to shoulder the
burden of growing trade deficits with the region decreases.

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52 US Approaches to the Trade-Security Nexus in East Asia

Conclusion

In an effort to understand the changing dynamics between trade and

security in East Asia, this article focused on the US positions on, and
approaches to, the region as its close trading partner as well as an ally.
At a glance, the combination of American neoliberal ideas and con-
temporary power has led to the "securitization of globalization," a trend
that was strengthened under the Bush administration after the 9/1 1 at-
tacks. If we look beneath the surface, however, the US approaches to
the trade-security nexus in postwar East Asia have unfolded in three
stages: securitization, desecuritization, and resecuritization. This analy-
sis demystifies the realist illusion that the United States has always
securitized its trading relations with East Asia during the postwar pe-
riod. It also challenges the liberal triumphalism that closer economic
interdependence would reduce the chances of military conflicts.
During the Cold War period, security considerations overshad-
owed US economic interests under the San Francisco system. The
end of the Cold War and the outbreak of the Asian financial crisis re-
versed the trend in the 1990s, placing economic policy at the front of
the trade-security nexus. Yet again, the post-9/1 1 trade-security nexus
is changing in favor of embedding trade in security concerns.
During the Cold War, the United States was willing to provide
global public goods - that is, trade liberalization - for its East Asian al-
lies because it considered free trade (and East Asian countries' free
riding) tolerable and beneficial to its own strategic interests in con-
taining the Soviet Union. The United States also defined its interests
broadly and in a sufficiently inclusive manner that East Asian countries
felt able to sign on to an American vision without undermining their
own national interests. Yet when this arrangement came under heavy
pressure in the 1990s, many East Asian countries suddenly realized
that they were prodded by America's aggressive and unilateral trade
policy regardless of their alliance status. America's desecuritization of
trade policy became much more evident when it chose to use the Asian
financial crisis as an opportunity to push for neoliberal economic pol-
icy reforms across East Asia.
In recent years, security considerations once again have become
a significant factor in US trade policy. When seen from the US per-
spective, the linkage is clearly defined in some obvious examples of

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 Min Gyo Koo 53

resecuritization of trade policy. However, when compared to its se-

curitization strategy during the Cold War period, there is a funda-
mental difference in terms of America's incentive to provide public
goods and to put its geopolitical commitments ahead of its geoeco-
nomic needs. It is no coincidence that the US effort to reconnect the

ties between trade and security has not been fruitful across the East
Asian region. The best example is the delayed ratification of the
KORUS FTA. This clearly shows that the United States is still under
the influence of fair-trade ideas from the 1990s and that the executive
initiative to resecuritize US trade policy is not fully supported by key
domestic veto powers. Furthermore, by reducing the number of po-
tential candidates for an FTA, the United States has in fact undermined
its own strategy, while allowing China to embrace a region that hith-
erto had been very reluctant to develop deep ties with Beijing.

Notes

Min Gyo Koo is assistant professor in the Graduate School of Public Adminis-
tration at Seoul National University, Korea. His research and teaching interests
include international and East Asian political economy, international governance,
and Asia-Pacific security affairs. His recent publications include Island Disputes
and Maritime Regime Building in East Asia: Between a Rock and a Hard Place
(2009) and Asia's New Institutional Architecture: Evolving Structures for Man-
aging Trade, Financial, and Security Relations (coedited with Vinod K. Aggar-
wal; 2008). He can be reached at mgkoo@snu.ac.kr.
This study was supported by the Knowledge Center for Public Administra-
tion and Policy 2010. The author would also like to express his special thanks to
T. J. Pempel, Kiichi Fujiwara, Vinod K. Aggarwal, and two anonymous referees
for their useful comments.
1 . In East Asia, the shift toward alternatives to the General Agreement on
Tariffs and Trade (GATT)/World Trade Organization (WTO) and the Asia-Pacific
Economic Cooperation (APEC) forum took its most pronounced turn with the
conclusion of Japan's first post-World War II bilateral FTA, the Japan-Singapore
Economic Partnership Agreement. Other East Asian countries, traditionally loyal
supporters and beneficiaries of postwar multilateral trading regimes, are also
actively weaving a web of bilateral FTAs, targeting countries both within and
outside the region in hopes of securing access to much-needed export markets.
For more details, see Aggarwal and Koo 2008.
2. Early arguments that connected economic interdependence with less con-
flict date back to the seventeenth and eighteenth centuries. As found in the writ-
ings of David Hume, the Baron de Montesquieu, Adam Smith, Richard Cobden,

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54 US Approaches to the Trade-Security Nexus in East Asia

John Stuart Mill, and Immanuel Kant, classical liberals hoped that the rejection
of mercantilism and the strict limitation on sovereign states' intervention in pri-
vate, entrepreneurial activities would diminish the temptation to impose their
own conflicts upon other states (see Doyle 1997, 233-234).
3. Kent Calder has outlined the key defining features of the San Francisco
system: a dense network of bilateral security alliances; an absence of multilat-
eral security structures; strong asymmetry in alliance relations, both in security
and economics; special preference to Japan; and liberal trade access to Ameri-
can markets, coupled with relatively limited development assistance (Calder
2004, 138-140).
4. The conclusion of Japan's first post-World War II FTA, the Japan-
Singapore Economic Partnership Agreement, came at this critical juncture in Oc-
tober 2001 . The other economic giant in East Asia, China, also signed a framework
FTA with its neighbors in Southeast Asia in February 2003. In addition, other East
Asian countries have wasted no time in moving toward FTAs, departing from their
traditional commitment to the WTO (Aggarwal and Urata 2006).

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