Aftershock: The 112th Congress and Post-Crisis Asia
Essay from the NBR Analysis Series

The 112th Congress and Post-Crisis Asia

by Daniel Twining and Edward Gresser
March 8, 2011

This essay examines the 112th Congress and the key policy issues in Asia that this Congress will face.

The new Congress takes over as a much-debated transformation of the world economy accelerates. China and India have emerged from the 2008 financial crisis with a rising share of the global economy and growing technological capacity and military capabilities. Within Asia, their growth has sped up the pace of economic integration and bolstered the confidence of Asian governments. However, this trend has also appeared to increase tension and suspicion among most of the major Asian powers.

Meanwhile, Americans grapple at home with a sluggish economic recovery and an unemployment crisis unmatched since the stagflation era from 1974 to 1982. Traditional allies in Japan and Europe are equally troubled. And looking ahead to the years beyond the 112th Congress, the United States faces an unavoidable era of fiscal contraction, as rising health and retirement costs outpace government revenue— raising questions not only about domestic affairs but also about the sustainability of U.S. commitments in the Pacific.

The 112th Congress will be charged with assessing and responding to these profound shifts in the landscape while also considering a vast array of specific Asia policy questions spanning the region and the spectrum of issues, from the Afghan mountains to the sea lanes of the Pacific, and from currency flows to human rights. Four issues will confront Congress almost immediately: the Korea-U.S. Free Trade Agreement (KORUS FTA), North Korea, policy toward China, and policy toward Afghanistan.

  • The KORUS FTA. This much-delayed agreement, concluded in December 2010, will likely be the 112th Congress’s most important Asia policy vote. The response of Congress to KORUS will test U.S. support for a critical alliance relationship, decide the Obama administration’s ability to pursue an ambitious trade agenda over the next two years in the Asia-Pacific and in global initiatives, and to some extent foretell the United States’ ability to shape the economic and political future of the Pacific region in this new decade.
  • North Korea. The passage of time and the installation of a 27 year-old heir-apparent to President Kim Jong-il appear to be making North Korea more rather than less aggressive, as demonstrated by the sinking of the Cheonan in spring 2010, artillery attacks on civilian territory in South Korea, and the unveiling of a sophisticated new nuclear research program. The risk of war on the peninsula is perhaps higher than at any other time in the past fifteen years. Congress will need to ensure…