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Asean Affairs    8 June 2012

President Aquino’s U.S. Visit Will Cap Revitalization of Alliance

By Ernest Z. Bower and Prashanth Parameswaran

June 4, 2012

President Benigno “Noynoy” Aquino III of the Philippines will make his third visit to the United States from June 6 to 9, including stops in Washington, D.C., and Los Angeles. The highlight of the visit will be his meeting with President Barack Obama on June 8, which will mark the first encounter between the two in the Oval Office since Aquino assumed office in 2010.

Aquino arrives riding an impressive wave of political momentum, a leader with enough support to make decisions that could significantly impact the direction of his country. That fact makes this visit an important and interesting event. One of the most important questions Aquino and his delegation will address in

Washington is how to strike a balance between warming security and political ties and real progress on trade and economic cooperation.

Aquino was effectively conscripted to run for president two years ago by a public desperate for clean government and good governance. He staked his credibility on a fight against corruption, good governance, and poverty alleviation. He is delivering on his promises. The Philippine economy is surging toward high growth with estimates of 5 percent for 2012 despite the global slowdown. The Philippine Stock Exchange hit its all-time high in May, the peso has risen to almost its strongest exchange rate since 2008, and exports are projected to expand 10 percent this year. Last week the Philippine Senate delivered the conviction of Renato C. Corona, the chief justice of the Supreme Court, on corruption charges.

The visit also comes in the context of a strengthening U.S.-Philippine relationship. The Philippines is the oldest of the United States’ five treaty allies in Asia.

The alliance is codified under the Mutual Defense Treaty signed in 1951. Relations between Manila and Washington were tumultuous during the Cold War and were strained after the United States lost its military bases there in 1992.

But developments in the past few years, including the administration’s rebalancing toward Asia, maritime and territorial disputes between Manila and Beijing, and Aquino’s achievements at home, have converged to create an alignment of interests that has reinvigorated the alliance. There has been a heightened level of engagement between both sides, including the first bilateral strategic dialogue in Manila in January 2011 and the inaugural “2 plus 2” meeting between the two countries’ top diplomats and defense chiefs in April this year.

Developments in the Scarborough Shoal, an area located 120 nautical miles off the Philippines where Manila and Beijing remain locked in a standoff at sea, are expected to dominate the headlines on Aquino’s trip. But Aquino and his delegation, which includes Foreign Secretary Albert del Rosario, Defense Secretary Voltaire Gazmin, Finance Secretary Cesar Purisima, and Trade Secretary Gregory Domingo, will delve into a variety of other economic and security issues that dominate bilateral relations. Topics will include the role Washington can play in Manila’s defense modernization effort and economic development, the Philippines’ role in the broader U.S. Asia-Pacific strategy, corruption and transparency, and trade issues including the Philippines possible membership in the Trans-Pacific Partnership trade agreement.

Both countries are aware of regional sensitivities about increasing tensions between China and the Philippines in the South China Sea. Some members of the Association of Southeast Asian Nations (ASEAN) are concerned that the Philippines is playing its hand too aggressively with China and that heighted U.S. engagement may provoke Beijing.

Q1: What is on the agenda of Aquino’s trip?

A1:Aquino is scheduled to arrive from London on June 6. His engagements on June 7 will include a meeting with the U.S. Senate leadership and a reception in his honor hosted by Senator Daniel Inouye (D-HI), a strong supporter of close ties with the Philippines; a visit to the U.S. Marine Corps facility at Quantico in Virginia; and participation in the inaugural dinner of the newly created United States–Philippines Society.

On June 8, Aquino will meet with President Obama at the White House. This will be the fourth meeting between the two presidents in a span of two years but their first encounter in the Oval Office. Before the meeting, Secretary of State Hillary Clinton will host a luncheon for Aquino at the State Department.

After his engagements in Washington, Aquino will make a short visit to Los Angeles, where he has scheduled meetings with the Filipino-American community.

In these meetings, the Philippines and the United States will discuss expanding military and security cooperation, including discussions of U.S. access to strategic Philippine facilities and modernizing the Philippine military to strengthen and achieve a “credible deterrent posture.” President Aquino and his delegation will also explore whether he wants to use his political capital to join the Trans-Pacific Partnership (TPP) negotiations as a pathway to institutionalize economic reform and codify efforts to sustain governance and transparency initiatives.

Q2: What is the current state of U.S.-Philippine relations?

A2:U.S.-Philippine relations have rarely been better. Mutual interests appear to be substantively aligned. The Obama administration’s rebalancing toward Asia, coupled with territorial disputes between China and the Philippines in the South China Sea and favorable domestic political and economic developments in Manila have combined to reinvigorate an alliance that languished after the Philippines closed two large U.S. bases—Subic Bay and Clark Air Base—in the early 1990s.

The Philippines has had several run-ins with China in disputed waters in the South China Sea (the Philippines calls it the West Philippine Sea) over the past two years. The most recent round of saber rattling began in April when Chinese vessels prevented a Philippine Navy ship from arresting Chinese fisherman encroaching on Scarborough Shoal (what the Philippines calls Bajo de Masinloc). Realizing that it is outmatched militarily, the Philippines mounted a defense modernization program and has looked to Washington to help equip and train its military. Defense ties between the Philippines and the United States have picked up, with Washington dispatching more military assistance to the Philippines. The two governments held an inaugural U.S.-Philippines Ministerial Dialogue, a “2 plus 2” meeting featuring respective diplomatic and defense chiefs on April 30 in Washington, D.C. U.S. military aid to the Philippines is expected to double to $30 million this year.

The United States also supports Aquino’s domestic agenda. His focus on rooting out corruption has won favor in Washington, gaining him an invitation to the launch of President Obama’s Open Government Partnership last September. The recent successful prosecution of Supreme Court justice Renato Corona—the biggest victory for Aquino’s anti-graft campaign thus far—gives him more political capital to move on other fronts. Recent good news on the Philippine economy, which posted the highest first-quarter economic growth since 2006, will bolster Aquino’s case for enhancing trade and investment links with the United States.

Q3: What security and defense issues will Aquino raise during his visit?

A3:The Philippines is expected to request additional military hardware, which the country’s military needs to build what Foreign Secretary del Rosario calls a “minimum credible defense posture.” Washington is already preparing to send a second Coast Guard cutter to the Philippines this fall and is helping Manila develop its “Coast Watch” system to monitor its coastline. The Philippines is looking for the United States to provide more equipment, including patrol boats and aircraft. The two governments may also discuss ways to cooperate with other U.S. allies to provide defense equipment to the Philippines, information and intelligence sharing, and what U.S. officials call “additional creative funding streams.”

The United States will discuss bilateral arrangements with the Philippines to bolster the U.S. Asia-Pacific strategy of enhancing its forward presence through flexible and temporary operations, exercises, and training instead of permanent bases. Defense Secretary Leon Panetta recently said Washington was looking to develop an approach in the Philippines similar to that in Australia, where the United States has authorization to rotate 2,500 marines each year through a base near Darwin.

The two sides may also discuss the U.S.-Philippines Mutual Defense Treaty in the context of developments in the South China Sea. In the wake of the recent standoff between Manila and Beijing, questions have been raised about whether the treaty covers the conflict area. A few weeks ago, del Rosario released a statement saying that, in the view of the Philippines, the treaty did include the contested territories west of the Philippines. It is not clear, however, that Washington agrees with this assessment. When the issue was brought up in the recent “2 plus 2” meeting, Secretary Clinton reiterated the administration’s position that, while the United States did not “take sides on competing sovereignty claims,” it did have an interest in freedom of navigation.
Q4: What about economic and trade issues?

A4: President Aquino has sought support from foreign investors to inject momentum into his administration’s Public-Private Partnership program to encourage more foreign investment. His stop in the United Kingdom before coming to Washington is expected to yield some big investments in energy and infrastructure.

Aquino will seek greater investment by American businesses as well during his trip here.

The two sides will also discuss the possibility of the Philippines joining TPP, an initiative that now includes Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, the United States, and Vietnam. The United States has encouraged the Philippines to join TPP. Aquino will be accompanied by some of his country’s top business leaders. If these executives embrace the concept of a balanced relationship and understand that sustaining a strong alliance requires a dynamic and forward-leaning economic relationship, they could provide the additional encouragement and political cover that Aquino needs to sign onto the initiative.

Aquino is also expected to call on the U.S. Congress to pass the Save Our Industries Act (or SAVE Act), which would lift tariffs on Philippine-made garments that use American textiles. The measure is projected by the Philippine government to restore hundreds of thousands of manufacturing jobs in the Philippines and result in over $1 billion in apparel exports to the United States. The U.S. administration says it would prefer that the Philippines join TPP, which is expected to reduced trade barriers across broad sectors of the economy, rather than ask Congress to pass a bill that would benefit one sector in country.

Ernest Z. Bower is a senior adviser and director of the Southeast Asia Program at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Prashanth Parameswaranis a researcher with the CSIS Southeast Asia Program.

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