Key issues facing the United States in Southeast Asia in 2024

Key Chapter Titles List

1. Challenges and Opportunities in U.S.-Southeast Asia Economic Relations
2. Transitioning to a Clean Energy Future
3. Addressing Climate Change and Environmental Degradation
4. Supporting a Strong and Independent Southeast Asia
5. Advancing Democracy, Human Rights, and Good Governance in an Increasingly Multipolar World
6. Strengthening Southeast Asian Security and Resilience Against Maritime Coercion
7. Maintaining Focus on Long-Term Policy Issues
8. Task Force Contributors

Document Introduction

This report is authored by a task force of 12 independent experts convened by The Asia Foundation, aiming to provide systematic policy analysis and recommendations for the new U.S. administration and Congress taking office in January 2025. The report is based on an eight-month series of discussions covering a wide range of topics including economic relations, climate change, energy, maritime security, and how to support ASEAN and promote regional democracy, human rights, and good governance. The expert panel includes former senior diplomats, scholars, analysts, and private sector representatives who contributed insights based on deep regional knowledge and experience in their personal capacities.

The report begins by emphasizing the critical strategic importance of Southeast Asia to the United States. The region has a population of 693 million, a GDP of $3.67 trillion, is the United States' fourth-largest trading partner, an emerging hub for global critical supply chains, and a significant source of critical minerals. Situated between China and India and straddling the world's most vital maritime shipping lanes, through which 25% of global trade passes, its geopolitical and economic importance is self-evident. However, the report notes that the U.S. has shown a tendency to pay insufficient attention to the region since the end of the Cold War. Coupled with factors such as the conflicts in Ukraine and Gaza and domestic politics, this makes it more challenging to articulate Southeast Asia's importance to U.S. policymakers.

In the economic sphere, the report argues that the U.S. urgently needs a proactive economic strategy. Despite significant U.S. investment and extensive commercial presence in Southeast Asia, China has become the region's dominant economic engine, with its trade volume with ASEAN in 2022 far exceeding that of the U.S. The U.S. withdrawal from the Trans-Pacific Partnership (TPP) raised questions about the reliability of its economic commitments. The report recommends that the new administration should push for substantive agreements under the trade pillar of the Indo-Pacific Economic Framework (IPEF), deepen cooperation on critical mineral and semiconductor supply chains, and strengthen digital economy linkages around the ASEAN Digital Economy Framework Agreement (DEFA) currently under negotiation.

In the climate and energy domain, the report views it as a key area for the U.S. to demonstrate leadership and create business opportunities. Southeast Asian countries have all set net-zero emission targets but face financing and governance obstacles. The U.S. should fulfill its commitments to the Just Energy Transition Partnerships (JETP) with Indonesia and Vietnam, provide technical and financial support, and deepen cooperation in clean energy technology, grid modernization, and standards for sustainable critical mineral extraction.

At the security and geopolitical level, the report acknowledges that China's increasingly coercive behavior, particularly in the South China Sea, poses challenges to regional stability and U.S. interests. However, the report advises that the U.S. should adjust its narrative, which overly emphasizes U.S.-China competition, to avoid forcing regional countries to "choose sides." The U.S. should enhance Southeast Asian countries' capacity and confidence to resist coercion by strengthening communication, supporting ASEAN centrality, prudently utilizing "minilateral" mechanisms (such as the U.S.-Australia-Japan-Philippines "Quad" group), and expanding support for the Indo-Pacific Partnership for Maritime Domain Awareness (IPMDA).

Regarding democracy, human rights, and governance, the report points out a regression in this area over the past decade, with the Myanmar crisis being the most extreme example. The report believes punitive measures have limited utility; the U.S. should adopt a more comprehensive and nuanced approach, supporting localized good governance efforts, and increase its engagement on the Myanmar crisis, including appointing a special envoy, providing more direct support to resistance forces, and leading broader diplomatic efforts. The report also prioritizes combating cyber scam crimes originating from Southeast Asia.

Finally, the report reminds that U.S. policy needs to move beyond a singular focus on competition with China and continue to pay attention to long-term issues such as soft power, global health cooperation, and counter-terrorism. The report's core argument is that a strong, independent Southeast Asia capable of maintaining strategic space between the U.S. and China best serves long-term U.S. interests. This requires the U.S. to demonstrate a reliable, enduring, and substantively economic partnership.