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Worldwide Locations

Why Are Current American Relations with Asia More Stable than with Europe?

Economic Imperatives

The difference in economic growth patterns between Asia, Europe and the Middle East must also contribute to the difference in treatment and results. US trade with Asia passed that with Europe in 1979, and has never looked back. Europe’s direct investment links with the US are huge, but the contrast in economic growth rates are striking. The EU community as a whole has been stagnant in recent years, as has Japan, but China, India and Southeast Asia are growing rapidly. Their growth is fueled by domestic consumption, foreign investment and trade. The US is the major trading and investing power for the region.

Economic interests provide a certain ballast for the relationships in the region. If we did not have such a high level of trade and investment in China, for example, we would have been blown off course by the P-3 incident in 2000, the bombing of the Belgrade Embassy and other incidents during the 90’s. But an influential business lobby pressured the Administration to adopt a cooler approach, which brought us back to equilibrium.

Our economic relationships in South Asia, so far, lack the weight to act as effective ballast, but the growth of the Indian economy plus strong relationships between Indians and Americans in the Information Technology area can change that over time. At the same time, the sense in both India and Pakistan that their confrontation had deprived them of the benefits that inter-regional trade and investment had brought East Asia in recent decades, has contributed to the momentum behind the current efforts a détente.