(Thailand Jealousy) Shock move by White House

16/06/2009
EDITORIAL
Bangkok Post

The latest decision on Southeast Asia by US President Barack Obama is the second disturbing action by Washington affecting this region. Late last Friday, after the main news cycles for the week had elapsed, Mr Obama announced a major new policy initiative. The low-level statement that he was declaring Laos and Cambodia eligible for major US loans and trade concessions took the rest of the region by surprise.

The first visit to Southeast Asia by Secretary of State Hillary Clinton largely ignored the longest and strongest US allies. Now, the decision to give special treatment to Laos and Cambodia came as a bit of shock, including in Thailand.

Mr Obama's "determination" about each country was a brief official statement, posted at the White House media room and website. Such presidential determinations are legal obligations in many cases in the United States; these were the 20th and 21st of an early presidency. But as these statements showed, they are often "game changers" by the president. In these almost identical statements, Mr Obama declared that Laos and Cambodia are eligible to be beneficiaries of US Export-Import Bank loans for American businesses in those countries.

The reason, Mr Obama said, is that each "has ceased to be a Marxist-Leninist country".

Mr Obama was apparently not concerned with the nuances of Marxist evolution. It was mandatory to declare Laos and Cambodia were not communist countries in order to achieve his true goal - to provide millions, and perhaps billions, of investment capital for American businesses to set up, operate in and trade with the two neighbouring countries.

Mr Obama did not explain why he set this goal. Indeed, the manner of the announcement was to keep all questions and justification to a minimum.

This apparently was to stifle the negative reaction of political groups in the US who are appalled at the treatment of Hmong tribespeople by Laos.

A more important result, however, is that Mr Obama has created negative fallout in Thailand and the region.

The US Exim Bank rarely is involved with Thailand, and generally supports one-time sales rather than investment.

In 2003, it provided support for sales of Boeing 747 aircraft to Thai Airways International, and there are occasional cases where the bank has backed smaller deals. As the Thai economy has developed, the US Exim Bank has been an ever-smaller presence.

That is why Mr Obama's unexpected support for Laos and Cambodia disappointed many in Thailand. For years, Thai businesses have expanded into these countries. The overseas business expansion - ironically with the frequent support of the Exim Bank of Thailand - has been a major engine of Thai growth. This in turn has led to decreasing dependence upon foreign help and special programmes by Washington.

The sudden entry of the US Exim Bank into these Thai markets will affect Thai trade and the economy. By failing to warn and prepare Thai authorities and businesses, the Obama administration has created a shock that will have negative implications, at least at the start.

This problem could easily have been avoided had the White House warned of the coming decision and allowed time for diplomatic talks and business preparations. Failing to do so again begs the question of whether the United States is seriously engaged with its long-time allies in this region.

Why Japan won't go nuclear

By Takashi Yokota | NEWSWEEK

North Korea's recent nuclear test has spawned many nightmare scenarios, including the possibility that pacifist Japan will go nuclear, triggering a new arms race. Both U.S. Secretary of State Hillary Clinton and Defense Secretary Robert Gates have warned of just that possibility, and on May 31 former secretary of state Henry Kissinger said that unless Beijing reins in Pyongyang, it should expect to "live in an Asia in which South Korea and Japan have nuclear weapons."

It sounds plausible. After all, Japan is one of the only great powers that doesn't already boast its own nuclear deterrent. Though Tokyo has officially vowed never to possess, build or even allow nuclear weapons onto its territory—promises born from Hiroshima and the pacifist constitution imposed on Japan by its U.S. occupiers after the war—some big-name Tokyo politicians have questioned that stance in recent years. In April, Goji Sakamoto, a lawmaker from the ruling Liberal Democratic Party, said that Japan should at least "threaten" to go nuclear. Shinzo Abe, who was prime minister from 2006 to 2007, once reportedly told a room full of college students that possessing nukes wouldn't violate Japan's constitution as long as the arsenal was "small in scale." And after Pyongyang's first nuclear test in 2006, senior LDP member Shoichi Nakagawa and Prime Minister Taro Aso (then foreign minister) called for public debate on the question.

Yet this is all just rhetoric. For one thing, despite North Korea's threats and China's growing military and political power, the Japanese people remain dead set against building nuclear weapons. Polls conducted over the past three years show that less than 20 percent of the public currently says it favors possessing such a deterrent.

For another, Japan—a crowded island nation—lacks the space to test a bomb. Japan has large stockpiles of plutonium for its nuclear-energy industry. But plutonium-type bombs require physical testing to verify their efficacy. (Uranium bombs are considerably simpler and so may not need physical testing, but Japan doesn't have the weapons-grade uranium to make such a device.) While some experts argue that Japan could test a plutonium weapon by detonating it underground, others—including former defense chief Shigeru Ishiba—insist that there is simply nowhere to do so in such a densely populated nation. Simulations would not be sufficient; those only work after at least one actual test.

Japan, moreover, now occupies the nuke-free high ground and would risk losing its innocence if it went nuclear. According to an internal 1995 study by Japan's defense establishment, reversing the country's no-nukes policy would trigger the collapse of the Nuclear Non--Proliferation Treaty regime, as the withdrawal of the world's only nuclear victim could fatally undermine confidence in the system. Such a move would also severely damage relations with Washington—Tokyo's most important ally—and the alarm in Beijing and Seoul could set off a nuclear race across East Asia. Japan would get the blame.

The consequences for Japan's energy supplies and economy could be equally catastrophic. If Japan broke out of the NPT, the countries that now supply it with nuclear fuel, including Canada, Australia and the United States, would surely hold back their shipments, which are currently conditioned on the fuel's peaceful use. That would be a nightmare for Japan, which relies on nuclear energy for nearly a third of its electricity.

Obama okays U.S. Exim bank loans for Cambodia, Laos

Fri Jun 12, 2009

WASHINGTON (Reuters) - President Barack Obama has cleared the way for the U.S. Export-Import Bank to help finance exports of U.S. goods to Laos and Cambodia, the White House said on Friday.

Obama issued a pair of memorandums saying each of the two Southeast Asian nations has "ceased to be a Marxist-Leninist country," as defined under the 1945 Export-Import Bank Act.

"This designation will now allow U.S. companies to apply for financing thru the US Export-Import bank, which provides working capital guarantees, export credit insurance and loan guarantees," the White House spokesman said.

The policy change in is response to the commitment of both countries to open up their markets, the spokesman said.

It comes as some in Congress are pressing for renewal of U.S. trade sanctions on another Southeast Asian nation, Myanmar, which has charged pro-democracy advocate Aung San Suu Kyi with violating the terms of her house arrest. She faces a maximum five-year term if found guilty of the charges.

Cambodia and Laos, with a combined population of more than 20 million, are small markets for the United States.

Last year, the United States exported $154 million worth of goods to Cambodia and just $18 million to Laos.

U.S. imports of mostly clothing and other textiles from Cambodia totaled more than $2.4 billion last year. The United States bought $42 million worth of goods from Laos in 2008.

(Reporting by Doug Palmer and Ross Colvin; editing by Todd Eastham)