Obama Seeks to Improve Trade Ties With Asia

With Europe mired in a debt crisis, President will try to cozy up to Asian economic powers.

SHARE

WASHINGTON (Reuters) — With Europe mired in crisis, President Barack Obama is launching a charm offensive this week to hitch the U.S. economy to growth opportunities in Asia that he hopes can help power the recovery he needs for re-election.

Obama, who was born in Hawaii and spent part of his childhood in Indonesia, will host Asian leaders including Chinese President Hu Jintao and Japanese Prime Minister Yoshihiko Noda in Honolulu this weekend to seek to improve trade ties across the Pacific.

[Check out our editorial cartoons on President Obama.]

He will then travel to Australia to announce plans to boost the U.S. military presence in the region and will be the first American president to attend the East Asia Summit in Bali. There, he will heap attention on the Philippines, Thailand, Malaysia and Indonesia as well as India.

The campaign to cozy up to Asian powers large and small comes at a critical moment for the U.S. economy, whose recovery is at risk because of a spiraling debt crisis in Europe that dominated a G-20 leaders' summit in France last week.

"To have this trip happen when you have nothing but crisis in Europe and nothing but opportunity in Asia, you couldn't have more of a juxtaposition," said Victor Cha, who advised President George W. Bush on Asian affairs.

Georgetown University professor Charles Kupchan said he expected the Asia swing to be "much more upbeat" than the trip to Cannes had been for Obama, whose re-election chances in November 2012 will hinge on his economic record.

[See a collection of political cartoons on the economy.]

Executives from companies such as Boeing Caterpillar, General Electric and Time Warner Cable will also attend the APEC summit to help Obama make the case that closer ties with Asia will help create U.S. jobs.

"When you look for rays of light, where is growth going to come from, one of the main answers is exports to Asia," Kupchan said. "It is something that this president needs to focus on, particularly in an election season."

Obama will not be able to leave the European financial crisis behind entirely. Asia-Pacific finance ministers meeting in Honolulu before the leaders' summit fretted about Europe's lack of strong action to deal with crises in Greece and Italy, and talked of ways to bolster their own economies to minimize potential spillover.

PACIFIC POWER

Obama will also seek to reassert the U.S. role as a Pacific power, shifting more of its budget-stretched military resources to Asia as it pulls out of Afghanistan and Iraq and worries less about security in Europe.

In Australia, he is set to announce an agreement for more than 2,000 Marines to train and do joint exercises from Darwin, a city with a large military presence on the country's northern coast, according to an Obama administration official familiar with the plans. The official spoke on condition of anonymity.

The cooperation deal is seen as a stepping stone to a more permanent presence for the United States in Australia, which could eventually see U.S. vessels stationed in Perth or nearby that could respond faster to regional threats or humanitarian emergencies than they could from Hawaii or California.

[See a slide show of 5 bright spots in the U.S. economy.]

"This is part of a big push to put the United States back into the Asian game after a decade or so in which it has been preoccupied with the Middle East," Kupchan said.

Obama is likely to avoid direct references to China when making the announcement, although the agreement is widely seen to be a way for the United States to act as a check on Chinese power and defuse possible conflicts over waterways and disputed islands.

"It is sending a very clear message that the United States is not ceding Asia diplomatically to China," said Cha, now a scholar at the Center for Strategic and International Studies.

Kupchan agreed, saying smaller and emerging powers in Asia "don't want China stepping all over them because of its economic clout." The United States provides a good military counterbalance that should not contradict its cooperative ties with Beijing so long as it is handled delicately, he said.