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Trump’s Audacious Vegas Diplomatic Gamble

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By Greg Rushford

January 18, 2020

Meeting in the Vietnamese seaside resort of Nha Trang yesterday, the foreign ministers of the ten ASEAN countries — the Association of Southeast Asian Nations — tentatively decided to accept President Donald Trump’s offer to host a special U.S.-ASEAN summit in the United States. The confab will be held on March 14, in Las Vegas, the Bangkok Post reported.

If all other things were equal, this would constitute a welcome piece of news. Trump has offended diplomats across the region by snubbing top Asian leaders’ summits for the last three years. The venerable Australian national security authority Carl Thayer voiced the frustrations of many when, in 2017, he likened the first Trump snub to an act of “political vandalism.” But now, Trump has signaled that the United States remains interested-and-involved in one of the world’s most dynamic regions. 

But with The Donald, nothing ever seems to be so simple. His awkward diplomatic- and political timing has raised eyebrows in key Asian capitals since Trump first floated the invitation last November. And Trump’s insistence upon the famous Nevada gambling and entertainment city as the venue has raised even more concerns. Plus, hardly for the first time with Trump, there is the distinct whiff of presidential self-dealing and cronyism in the air. 

I’ve been watching this diplomatic drama play out behind the scenes for the last two months. Here’s a quick rundown of the concerns that are being raised in well-connected Asian diplomatic and business circles.  

Awkward timing

First, the manner in which Trump offered to host a summit in the United States was perceived in the region as arrogant. He didn’t even invite the Asian chiefs of state in person, sending instead his national security adviser, Robert O’Brien, to a November 2019 summit of Asian leaders in Thailand. There, O’Brien delivered a letter with Trump’s proposal. Offended at the American president latest snub, seven of the ten ASEAN chiefs of state refused to meet with O’Brien.

Another problem with the timing was the familiar diplomatic ineptness factor that has become normal whenever Trump interacts with fellow world leaders.Top-level summits that involve coordinating the schedules of presidents and prime ministers usually take many months, perhaps a year, as the complex logistical challenges are worked out. Trump, in November 2019, was expecting the leaders of ASEAN’s ten countries to change their schedules to accommodate his, and by March 2020. In response to the raised diplomatic eyebrows, all that Trump’s aides offered, with no further explanation, was that March of 2020 best fit Trump’s schedule.

Of course it did. March 14 is just three days before the Democratic presidential primaries in the key electoral U.S. states of Ohio, Illinois, and Florida. Trump’s prospective Democratic Party challengers will then no doubt be busy fighting each other for the Democratic presidential nomination. They will project the image of mere partisan politicians jockeying for personal advantage.  

By contrast, Trump will be poised to appear presidential, a respected world leader hosting a diplomatic summit involving important Asian top leaders who have come to the United States, to pay their due respects. While he could easily do such in, say, Washington, D.C., Trump appears to have another agenda than projecting a sober image. 

An unserious venue

To be sure, Las Vegas projects anything but the image of presidential sobriety: the famous casinos, the sexy-dancer shows, the tables for high-rollers, the paparazzi with their flash bulbs, and so on. Every ASEAN summit is also well-known for the photo opportunity of the presidents and prime ministers, wearing the host country’s traditional costumes, sometimes a tad outlandish. What are the ten ASEAN leaders expected to do as they pose for posterity in Vegas: wear Elvis costumes? 

And in which luxury hotels and casinos will they choose to stay?

The whiff of presidential self-dealing

When Donald Trump is involved, world leaders can never be sure how to ascertain whether he is seeking to advance legitimate U.S. national security interests, or whether he is mainly looking to advance the Trump brand and his family’s personal financial interests. 

Speaking of branding, it happens that Las Vegas is the site of a Trump International Hotel. 

The Trump Organization’s promotional materials for the hotel boast of “our sleek, gold building” with its 1,282 “exquisitely appointed” accommodations. “This is living to the highest standard — the Trump level of luxury in a city that never disappoints.”

If some Asian leaders would risk putting their country’s sovereign wealth funds on the tables, they might end up disappointed, goes one sotto voce quip from one veteran Asia-watcher when informed of Trump’s preference for Vegas.

The 64-story Trump hotel — the tallest in Vegas, naturally — doesn’t have a casino. It does have, however, lots of Chinese tourists, who have been coming in increased numbers since Trump won the 2016 presidential election, the Washington Post has reported. And the Trump Organization has luxury condos for sale, complete with whirlpool baths, plush beds, and bars.

Such sales opportunities have sparked more sotto voce quips — to the effect that the condos could be of possible interest to Russian speakers who would know how to conceal their ownership behind shell corporations. Trump properties in Florida are crammed with such people, according to an authoritative Reuters investigative report. 

So where would the ASEAN leaders and their entourages be expected to stay? Who would occupy the “ultra luxurious” presidential suites that the Trump Organization boasts of? Where would the U.S. Secret Service and the plethora of American diplomatic and security aides stay? Where would U.S. tax dollars come into the picture? The answers to such questions have not been made public.

It’s worth recalling how Trump backed off his plans to host this year’s G-7 summit of world leaders at his National Doral golf resort in Florida, but only after a public outcry against the president’s obvious financial conflicts of interest. That was last October.

But once the president gets a notion in his mind, he is famous for not letting go easily. A month after the G-7 embarrassment, Trump quietly offered to host still another important summit in the United States. This one would have brought the corporate leaders of the top-level Asia Pacific Economic Cooperation forum to the United States — again, this March, again in Las Vegas. That idea was quickly shot down by the offended Malaysians, who are chairing APEC this year. 

On November 7, the Straits Times newspaper in Singapore reported that Trump’s offer to host an APEC summit in Vegas “was not a good idea,” as Malaysia’s foreign minister, Saifuddin Abdullah, put it. Apparently, that was that. Since that press report, nothing has been heard of hosting any APEC summits in Vegas this year.

The cronyism factor

Nobody is considered to be closer to Donald Trump and his family than billionaire Sheldon Adelson. (The Adelsons are worth an estimated $40-plus billion, according to various published speculations).

Adelson’s importance to Trump was on public display last week, when the president held a ceremony in the White House to celebrate the recently inked “Phase One” U.S.-China trade deal. A wide array of leading American political-and business leaders were in the audience, along with Adelson and his wife Miriam. They are,Trump declared, “two very good friends” and simply “great people.”

Conspicuously, Trump praised the Sheldon and Miriam Adelson before mentioning Henry Kissinger, a covey of sitting U.S. senators, son-in-law Jared Kushner, television demagogue Lou Dobbs, and the heads of such blue-chip American corporations as Boeing, Honeywell, Mastercard, and Dow Chemical. 

Ambitious Mega Donors

Trump has good reason to like the Adelsons.They gave him perhaps $10 million in campaign cash to help him win his 2016 presidential race, plus another $5 million and chump change for the January 2017 Trump inaugural party — and then upwards of $100 million to back Republican congressional candidates in the 2018 elections. 

Sheldon Adelson is well known in Asia. His breathtaking Marina Bay Sands that illustrates Singapore’s skyline was highlighted in the movie Crazy Rich Asians. He also has casinos in Macau, which cater to Chinese tourists. 

Adelson may be 85 years old and reportedly ailing, but he is still ambitious. The gambling magnate has been working hard to obtain a casino license in Japan. Toward that end, his friend Donald Trump is thought to have pressed Adelson’s Japanese aspirations with Prime Minister Shinzo Abe, according to a well-researched report by ProPublica’s Justin Elliott that was published late last year.

The ambitious octogenarian has also been hoping to open a casino in North Korea. That country is presently an impoverished wasteland, but one which Trump has also said he believes has potential high-value real estate opportunities. 

Adelson is also well-known in Asia as one of Israel’s strongest supporters. He is a fervent defender of Trump’s hardline policies towards Iran’s ayatollahs, and was thrilled when Trump moved the United States Embassy in Israel to Jerusalem. To ASEAN leaders of countries that have substantial Muslim populations, this could be the most awkward aspect of Trump’s Vegas proposals. 

Some Asia watchers contacted for this article said they found it somewhat of a stretch to imagine the prime ministers of Thailand or Malaysia, or the president of Indonesia, or the sultan of Brunei — all countries with substantial Muslim populations — rubbing shoulders with the likes of Donald Trump and Sheldon Adelson in Las Vegas. And it is near impossible to imagine that, one way or the other, Adelson would not be involved in an ASEAN summit held in his city. 

And that’s where matters presently stand. The final decision on whether to attend a US-ASEAN summit in Las Vegas on March 14 will be made by the chiefs of state of the ten ASEAN countries, the January 17 article in the Bangkok Post reported. 

Who would show up, and who might not, is a matter of intense speculation.

Philippine President Rodrigo Duterte, for one, has vowed not to travel to the United States for any reason. (At least, everyone blames congressional Democrats, not Trump, for that one. Duterte is understandably concerned over recent legislation that could deny his entourage entry visas, on human-rights grounds.)

Trump forgot another thing — nobody seems to know what the agenda for a US-ASEAN summit would be. 

Toward that end, all eyes will be on Vietnam, which is chairing ASEAN this year. Will the leadership in Hanoi seize the opportunity to work with the Americans to press the Chinese hard over Beijing’s illegal aggression in waters of the South China Sea that are rightfully within the exclusive economic zones of such ASEAN members as Vietnam, Malaysia, and the Philippines?  

If so, there is a real opportunity for Donald Trump, despite his unfortunate diplomatic style, to shine. Trump could work to accomplish something that his predecessor in the Oval Office, Barack Obama, utterly failed to deliver. Obama stood by passively while Xi Jinping’s China weaponized the South China Sea — clearly in violation of international law. 

Stay tuned.

America’s Philippines Blunder

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America’s Philippines Blunder
Failing U.S. trade policy exacerbates Manila’s doubts of Washington’s security promises.

By GREG RUSHFORD
July 28, 2016 12:46 p.m. ET

U.S. Secretary of State John Kerry on Wednesday discussed the “full range” of economic and security issues with Rodrigo Duterte, the Philippines’ newly elected president. The visit comes in the wake of The Hague’s July 12 ruling that Chinese actions in the South China Sea violate Philippine rights.

Mr. Kerry’s diplomatic mission was to assure Mr. Duterte that Manila can count on Washington’s mutual-defense promises. But there are also Mr. Duterte’s doubts that the U.S. can support the Philippine trade and economy.

When Mr. Duterte was sworn in to office on June 30, U.S. Trade Representative Michael Froman announced a new trade policy that upends important economic growth plans in the Philippines. It threatens to wipe out an estimated $100 million annual boost to Philippine exports of travel goods such as luxury handbags, wallets and backpacks. It also complicates Philippine investment aspirations to create some 75,000 travel-goods-related jobs in the next five years.

At first glance, Mr. Froman’s announcement gives no hint of the economic controversy it has sparked. He says that President Obama wants to make “a powerful contribution to lifting people out of poverty and supporting growth in some of the poorest countries in the world, while also reducing costs to American consumers and businesses.” The policy benefits 43 least-developed beneficiary countries, such as Cambodia and Haiti, and 38 African nations. Pursuant to the U.S. Generalized System of Preferences (GSP) program, these countries will no longer have to pay stiff tariffs of up to 20% on handbags, wallets and other travel goods exported to the U.S.
The U.S. decision to give preferential treatment to the industry’s small players, while blindsiding the most competitive producers, is perplexing. Cambodia, for instance, holds a modest 0.4% of the U.S. market, producing mostly backpacks. Africa’s total travel-goods exports to the U.S. amount to roughly one hundredth of one percent market share. As a result, the policy gives just two countries—China and Vietnam—a combined 90% share of the $5 billion U.S. travel-goods market.
It is unlikely that preferential treatment will prompt least-developed countries to boost their exports. Even with 15 years of duty-free access to U.S. clothing markets under the African Growth and Opportunity Act, 40 African countries combined to export less than 1%, or $1 billion, of garments each year to the U.S. The Philippines alone exceeds Africa in clothing exports by more than $100 million.

Diplomats from other countries and industry giants in the U.S., such as Coach, Columbia Sportswear and Kate Spade, have written to Mr. Froman asking for an explanation. On Wednesday 14 members of U.S. Congress, including 10 from the powerful Ways and Means Committee that has jurisdiction over trade, also issued a strong letter to the U.S. trade chief. But Mr. Froman has yet to offer any economic rationale for the decision, nor is there any evidence on the public record to support it.

Developing countries with larger market shares of the travel-goods industry, such as India, Indonesia, Pakistan, the Philippines, Sri Lanka and Thailand, must now reconsider their plans to expand their investments. Major U.S. players such as Coach and Michael Kors, which looked to U.S. trade officials to provide financial incentives to shift production away from China, will now put those investment plans on hold. China is thus poised to keep its 85% share of the U.S. travel-goods market.

Vietnam, as a communist country, is not eligible for the GSP preferences. But in the Trans-Pacific Partnership trade deal, the U.S. agreed to give the Vietnamese—who now hold a 5% market share—the same duty-free treatment withheld from GSP-eligible countries. Pakistan’s Prime Minister Nawaz Sharif thought he had received assurances directly from President Obama last year that U.S. trade officials understood the “importance” of increasing enhanced market access for Pakistan’s GSP-covered exports. Diplomats I have spoken to chafe at the unfairness.

Viewed through the Philippine lens, the failure to connect economic cooperation with the security aspect of Obama’s pivot to Asia is glaring. Cambodia, apparently thanks to financial inducements from Beijing, has been the spoiler whenever the Philippines has sought solidarity from its partners in the Association of Southeast Asian Nations in standing up to China in the South China Sea.

Asked repeatedly for his side of the story, Mr. Froman asserted through a spokesman that “travel goods are a product particularly well-suited to be produced in least-developed countries.” He declined to explain further.

While the broader security relationship will survive, it is worth noting that in international economic diplomacy, like in personal relationships, unnecessary smaller slights erode trust. With the Chinese watching on the sidelines and eager to buy their way out of their South China Sea mess, this is not a wise time to rub the volatile new Philippine leader the wrong way.

Mr. Rushford edits an online journal that specializes in international economic diplomacy.