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US assault on Russian arms exports could misfire in Asia

Washington risks alienating friends in ASEAN and boosting China

| North America
China canceled the USS Wasp's visit to Hong Kong after the U.S. imposed sanctions for buying weapons from Russia.   © Reuters

When it comes to security in Asia, U.S. President Donald Trump should beware the law of unintended consequences.

His administration has identified Russia and China as the two greatest threats to the U.S.-led world order. Yet Washington's efforts to curb Moscow's global arms sales may have the unintended effect of obstructing some Southeast Asian countries' attempts to resist Beijing's relentless advances; they may even enhance China's influence.

On Sept. 20, the U.S. imposed sanctions on a Chinese government agency responsible for purchasing foreign arms. The weapons in question were supplied by Russia -- the S-400 surface-to-air missile system and 24 SU-35 fighter jets.

The sanctions were an outcome of the Countering America's Adversaries Through Sanctions Act, which Trump reluctantly signed into law in August. The law aims to "counter aggression" by Russia (as well as by Iran and North Korea) by imposing sanctions on countries having dealings with the Russian military and defense industry.

Naturally, Russia and China responded angrily. Moscow accused America of undermining global stability, while Beijing said the sanctions amounted to interference in the internal affairs of two sovereign states. In retaliation, China refused permission for a U.S. warship to visit Hong Kong.

The sanctions will have little impact on the burgeoning Sino-Russian nexus. Although they prevent the Chinese agency from obtaining export licenses to America, or accessing the U.S. financial system, China has not been able to import weapons from the U.S. since 1989, and arms transactions between Moscow and Beijing do not involve U.S. banks.

More importantly, Washington's attempts to penalize Moscow may unintentionally assist Beijing's regional ambitions because some Southeast Asian countries (as well as India) rely on Russian military kit to deter China, especially in the South China Sea.

America is the world's largest vendor of military equipment. According to the Stockholm International Peace Research Institute, a Swedish think tank, U.S. global arms sales amounted to $76.33 billion between 2010 and 2017. Russia was in second place, racking up a respectable $54.66 billion.

In Southeast Asia, however, Russia is number one. Between 2010 and 2017, Russian defense companies made sales worth $6.64 billion in the region (12% of their global sales) compared with America's $4.58 billion (6% of their global sales).

Vietnam is Russia's biggest customer in Southeast Asia. From 2000 to 2017, 78% of Russia's arms exports to the region were bought by Vietnam. Myanmar accounted for 11% and Indonesia 10%. Thailand, Laos and Malaysia made up for the other 1%.

As Southeast Asian countries expand their defense budgets in an increasingly contested geopolitical environment, both the U.S. and Russia want to increase regional defense sales.

Singapore is a close strategic partner of the U.S., so Russia will not get a look in there. But Vietnam, Indonesia, Myanmar and even U.S. allies such as Thailand and the Philippines are looking to increase Russian defense purchases.

This is because Russian companies are known to provide advanced, durable equipment at lower cost than their American counterparts. Russian kit meets their needs at reasonable prices, and Russian weapons have been successfully battle tested in Ukraine and Syria. Unlike America, Russia does not tie arms sales to countries' human rights records.

Indonesia discovered the awkward consequences of U.S. policy in this regard in the 1990s when Washington imposed an arms embargo in response to Jakarta's human rights violations in East Timor and western New Guinea. The largely U.S.-equipped Indonesian military found itself short of spare parts and munitions.

More recently, in October 2016, the U.S. State Department canceled the sale of 26,000 assault rifles to the Philippines because of congressional criticism of extrajudicial killings in President Rodrigo Duterte's "drugs war." And although America lifted an arms embargo on Vietnam in 2016, the country's poor human rights record makes it unlikely that Congress would approve big ticket sales.

Jim Mattis, the U.S. Defense Secretary, opposed CAATSA because it conflicts with the Trump administration's 2017 National Security Strategy, which says that countering Chinese and Russian influence in Asia requires the U.S. to strengthen relations with some countries that buy Russian kit, including Vietnam, Indonesia and India.

Mattis asked Congress for waivers that would allow countries friendly to the U.S. to buy Russian weaponry without facing sanctions, which he said would deepen their dependence on Russia and prevent them from buying U.S. arms.

Congress offered a partial compromise. Under the National Defense Authorization Act, which Trump approved in August, the president can ask for a waiver from CAATSA on national security grounds, so long as it does not involve significant transactions with Russia.

However, Trump also needs to show to Congress that the country buying Russian arms is committed to reducing defense procurement from Moscow, or is cooperating with the U.S. on matters "critical to United States strategic interests."

Demonstrating the former will be difficult. Southeast Asian countries that already have Russian equipment are locked into close defense relationships with Moscow for decades. Some countries cannot afford American weapons. And most of the 10 states in the Association of Southeast Asian Nations do not want to become overly dependent on one supplier.

What can Southeast Asian states do?

While many would like to foster self-reliance by developing their indigenous defense industries, financial and technological obstacles have so far proved insurmountable. Foreign arms purchases will be indispensable for the indefinite future.

They could buy from European suppliers, but European arms are expensive, and supplies are subject to possible cancellation because of public outrage over human rights abuses.

A third option would be to turn to China. Chinese arms companies have not so far been major players in Southeast Asia. According to SIPRI, China sold only $1.88 billion worth of arms to the region between 2010 and 2017, with Myanmar accounting for 66% of the total. Chinese military equipment used to be a byword for poor quality and bad after-sales service. But that is changing. Beijing is selling submarines to Thailand and warships to Malaysia, and the Philippines is looking at a range of equipment.

It would be ironic if the Trump administration's attempts to limit Russia's weapons exports deepened some ASEAN states' dependence on Moscow and helped lift Chinese arms sales to other Southeast Asian countries, thereby undermining U.S. efforts to counter Beijing's expanding regional influence.

Ian Storey is a senior fellow at the ISEAS-Yusof Ishak Institute, Singapore.

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