T

Counter Definition

Economic engagement can be unconditional or

conditional
Kahler 4 Miles Kahler, Graduate School of International Relations
and Pacific Studies at the University of California, San Diego, and Scott
L. Kastner Department of Government and Politics University of
Maryland, Strategic Uses of Economic Interdependence: Engagement
Policies in South Korea, Singapore, and Taiwan, November,
http://www.bsos.umd.edu/gvpt/kastner/KahlerKastner.doc

Economic engagementa policy of deliberately expanding

economic ties with an adversary in order to change the
behavior of the target state and effect an improvement in
bilateral political relationsis the subject of growing, but
still limited, interest in the international relations literature.
The bulk of the work on economic statecraft continues to
focus on coercive policies such as economic sanctions. The
emphasis on negative forms of economic statecraft is not without
justification: the use of economic sanctions is widespread and welldocumented, and several quantitative studies have shown that
adversarial relations between countries tend to correspond to reduced,
rather than enhanced, levels of trade (Gowa 1994; Pollins 1989). At
the same time, however, relatively little is known about how
widespread strategies of economic engagement actually are: scholars
disagree on this point, in part because no database cataloging
instances of positive economic statecraft exists (Mastanduno 2003).
Furthermore, beginning with the classic work of Hirschman (1945),
most studies in this regard have focused on policies adopted by great
powers. But engagement policies adopted by South Korea and the
other two states examined in this study, Singapore and Taiwan,
demonstrate that engagement is not a strategy limited to the domain
of great power politics; instead, it may be more widespread than
previously recognized. We begin by developing a theoretical framework
through which to examine strategies of economic engagement.
Drawing from the existing literature, our framework

distinguishes between different forms of economic

engagement, and outlines the factors likely to facilitate or
undermine the implementation of these different strategies. With this
framework as a guide, we then examine the strategic use of economic
interdependencefocusing in particular on economic engagementin

three East Asian States: South Korea, Singapore, and Taiwan. We use
these case studies to draw conclusions about the underlying factors
that facilitate the use of a strategy of economic engagement, that
determine the particular type of engagement strategy used, and that
help to predict the likelihood of success. Because our conclusions are
primarily derived inductively from a small number of cases, we are
cautious in making claims of generalizability. Nonetheless, it is our
hope that the narratives we provide and the conclusions that we draw
from them will help to spur further research into this interesting yet
under-studied subject.
ECONOMIC ENGAGMENT: STRATEGIES AND EXPECTATIONS Scholars

have usefully distinguished between two types of economic

engagement: conditional policies that require an explicit
quid-pro-quo on the part of the target country, and
policies that are unconditional. Conditional policies, sometimes
called linkage or economic carrots, are the inverse of economic
sanctions. Instead of threatening a target country with a sanction
absent a change in policy, conditional engagement policies promise
increased economic flows in exchange for policy change. Drezners
(1999/2000) analysis of conditional economic inducements yields a set
of highly plausible expectations concerning when conditional strategies
are likely to be employed, and when they are likely to succeed.
Specifically, he suggests that reasons exist to believe, a priori, that
policies of conditional engagement will be less prevalent than
economic sanctions. First, economic coercion is costly if it fails
(sanctions are only carried out if the target country fails to change
policy), while conditional engagement is costly if it succeeds (economic
payoffs are delivered only if the target country does change policy).
Second, states may be reluctant to offer economic inducements with
adversaries with whom they expect long-term conflict, as this may
undermine their resolve in the eyes of their opponent while also
making the opponent stronger. Third, the potential for market failure
in an anarchic international setting looms large: both the initiating and
the target states must be capable of making a credible commitment to
uphold their end of the bargain. These factors lead Drezner to
hypothesize that the use of economic carrots is most likely to occur
and succeed between democracies (because democracies are better
able to make credible commitments than non-democracies), within the
context of international regimes (because such regimes reduce the
transactions costs of market exchange), and, among adversaries, only
after coercive threats are first used.

Unconditional engagement strategies are more passive in

that they do not include a specific quid-pro-quo. Rather,
countries deploy economic links with an adversary in the
hopes that economic interdependence itself will, over
time, effect change in the targets foreign policy behavior and
yield a reduced threat of military conflict at the bilateral level. How
increased commercial and/or financial integration at the bilateral level
might yield an improved bilateral political environment is not obvious.
While most empirical studies on the subject find that increased
economic ties tend to be associated with a reduced likelihood of
military violence, no consensus exists regarding how such effects are
realized. At a minimum, two causal pathways exist that state leaders
might seek to exploit by pursuing a policy of unconditional
engagement: economic interdependence can act as a constraint on the
foreign policy behavior of the target state, and economic
interdependence can act as a transforming agent that helps to reshape
the goals of the target state.
Perhaps the most widely accepted theoretical link between economic integration and a reduced danger of military violence centers
on the constraints imposed on state behavior by increasing economic exchange. Once established, a disruption in economic relations between
countries would be costly on two levels. First, firms might lose assets that could not readily be redeployed elsewhere. For example, direct
investments cannot easily be moved, and may be lost (i.e. seized or destroyed) if war breaks out. Second, firms engaged in bilateral economic
exchange would be forced to search for next-best alternatives, which could impose significant costs on an economy as a whole if bilateral
commercial ties are extensive. In short, economic interdependence makes war more costly, meaning that states will be less likely to initiate
armed conflict against countries with which they are integrated economically. Constraining effects of economic interdependence may also
arise more indirectly: as economic integration between two countries increases, an increasing number of economic actors within those two
countries benefit directly from bilateral economic ties, who in turn are likely to supportand lobby forstable bilateral political relations.
Economic integration, in other words, creates vested interests in peace (Hirschman 1945; Russett and Oneal 2001; Levy 2003). These interests
are likely to become more influential as economic ties grow (Rogowski 1989), suggesting that leaders will pay increasing domestic political
costs for implementing policies that destabilize bilateral political relations. Domestic political institutions might act as important intervening
variables here. For example, these effects may be most likely to take effect in democracies, which provide actors who benefit from trade clear
paths through which to influence the political process (Papayoanou 1999; Gelpi and Grieco 2003; Russett and Oneal 2001). Democracies, of
course, likely vary in the influence they give to commercial interests, as do authoritarian polities (e.g. Papayoanou and Kastner 1999/2000).
Recently, scholars have questioned whether the increased costs of military conflict associated with economic interdependence necessarily act
as a constraint on state leaders. Indeed, without further assumptions, the effects appear indeterminate: while economic interdependence
increases the costs of conflict for the target state, it also increases those costs for the engaging state. On the one hand, increased costs for the
target might make it less willing to provoke conflict, but on the other hand, the increased costs for the engaging state may paradoxically
embolden the target state, believing it could get away with more before provoking a strong response (Morrow 1999, 2003; Gartzke 2003;
Gartzke et al. 2001). This critique suggests that for an unconditional engagement policy exploiting the constraining effects of economic
interdependence to work, leaders in the target state must value the benefits afforded by economic integration more than leaders in the
initiating state (on this point, see also Abdelal and Kirshner 1999/2000). Such asymmetry is most likely to arise when the target states
economy depends more heavily on bilateral economic exchange than the sending state (Hirschman 1945), and when domestic political
institutions in the target state give the benefactors of bilateral exchange considerable political influence (Papayoanou and Kastner 1999/2000).
The second mechanism through which economic interdependence might effect improved political relations centers on elite transformation that
reshapes state strategies. This transformation can be defined as both an elevation at the national level of goals of economic welfare (and a
concurrent devaluation of the old values of military status and territorial acquisition) and a systemic transformation of values away from the
military orientation of the Westphalian order. Such arguments have a long heritage, including both Joseph Schumpeter's analysis of
imperialism as an atavism that would be superseded by more pacific bourgeois values, and interwar idealists, who sometimes based their
arguments on the material transformations underway in the international system. How economic interdependence creates transformed (and
more pacific) elites is less clear. Learning may take place at the individual levelthe cases of Mikhail Gorbachev and Deng Xiaoping come to
mindbut such learning must often take place before policy encourages increased interdependence. Processes of creating shared values and
identity and economic influences on broader social learning are more difficult to trace. A different and perhaps more plausible transformational
route follows from the vested interests argument outlined above. What appears to be social learning is in effect coalitional change:
internationalist elites committed to economic openness and international stability supplant or marginalize nationalist elites wedded to the
threat or use of military force. Whether a society is a pluralist democracy or not, interests tied to the international economy become a critical
part of the selectorate to whom political elites must respond. Etel Solingen (1998) outlines such a model of transformation in regional orders
when strong internationalist coalitions committed to economic liberalization create zones of stable peace. The barriers to a successful
unconditional engagement strategy that aims to achieve elite transformation in the target state would appear substantial. Strategies in this
vein are likely to encounter substantial resistance in the target state: most elites probably dont want to be transformed, and they certainly
dont want to be replaced. Faced with likely resistance, initiating states pursuing this strategy must be prepared to open economic links
unilaterally (i.e. without the cooperation of the target), hoping that the prospect of bilateral economic ties will generate a latent coalition of
groups desiring a peaceful environment in which they could take advantage of those ties, and that eventually a political entrepreneur will
mobilize this latent coalition in an effort to challenge the existing order. Because transformational strategies may require long time horizons
and may also incur repeated disappointments, they are perhaps most likely to be successful when a broad and stable consensusone able to
withstand changes in governing partyexists within the country initiating such a strategy (see, for example, Davis 1999).

In summary, we have distinguished between three

types of economic engagement: conditional engagement
(linkage); unconditional engagement seeking to utilize
the constraining effects of economic interdependence;
and unconditional engagement seeking to utilize the
transforming effects of economic interdependence. We
have also outlined a number of expectations, mostly drawn from the
existing literature, regarding the conditions likely to facilitate the use of
these various strategies. In the remainder of this essay we examine
the engagement policies of South Korea, Singapore and Taiwan, and we
use these cases to draw conclusions concerning the conditions
facilitating the strategic use of economic interdependence.

Perfer our interpretation because we actually define engagement

which can be both unconditional and conditional. .

Non voter because of the fact that the neg limits aff great and hurts
our education.
There is no way to quantify an large increase and so we create the best
interpretation because we are allowing for more education in this
round.

CP secrecy
Perm do the plan and the counterplan because of the fact that we
can do both and prevent the net benefit. And if you look at the net
benefit theres no impact to policiticization so our perm serves as a
good way at looking at policy because we make things transparent for
all countries so there we hold china accountable.

WTO
PERM DO BOTH THE PLAN AND THE COUNTERPLAN, THERE IS NOTHING
HOLDING BACK THE AFF AND THE NEG COUNTERPLAN FROM
FUNCTIONING IN THE SAME WORLD BECAUSE OF THE FACT THAT WE
GO THROUGH THE USFG.

The BIT is stalled over the negative list

Koh Gui Qing and Greg Roumeliotis, 6/20/16, Reuters, top us
official says more work needed on china investment rules,
http://www.reuters.com/article/us-usa-china-investmentidUSKCN0Z62NK, mm

China's latest proposed list of industries that would be

off-limits to foreign investors shows more work is needed
to agree on a new investment treaty with the United
States, U.S. Commerce Secretary Penny Pritzker said in an interview on Monday. Reaching
an agreement over the so-called 'negative list' of businesses in
China that are out of bounds to foreign investors is crucial in sealing a treaty
between Beijing and Washington that would lift investment flows between the
worlds two largest economies. The issue has been made more
prominent by a wave of Chinese acquisitions of U.S.
companies that have raised questions over the inability of
U.S. companies to buy assets as freely in China. In less than six
months of 2016, China's appetite for overseas acquisitions has already outgrown last year's record, as
deal-hungry mainland buyers chase global assets such as real estate, chemicals and high-end technology.
Chinese negotiators sent the latest revised draft of the negative list to their U.S. counterparts last week.
U.S. officials have said in the past that the number of sectors on the list that are closed to foreigners
needed to be greatly reduced for an investment deal, also known as the Bilateral Investment Treaty, to be
reached. "We are evaluating the list that we have been given (by our Chinese counterparts) and there is
more work to be done," Pritzker told Reuters on the sidelines of an investment summit in Washington DC,
declining to comment on whether an investment treaty can be signed before November, as some have
hoped. "We are not going to lower the standards of our typical bilateral investment treaty just to make a
deal," she said, adding that a review of Chinas trade status as a non-market economy - defined as one

The latest negative list

submitted by Chinese negotiators has not been made
public, although sources told Reuters previously that the
number of items on the list in earlier drafts had fallen to
between 35 and 40, from around 80 previously.
controlled by the state - will be driven by U.S. laws.

Negotiations stalled now need to further reduce

restrictions on investment
Behsudi 6-17-16 Adam Behsudi is a trade reporter for POLITICO Pro
(U.S., China talks ratchet up a BIT,
http://www.politico.com/tipsheets/morning-trade/2016/06/us-chinatalks-ratchet-up-a-bit-214880)

The United States and China

U.S., CHINA TALKS RATCHET UP A BIT:

have exchanged
updated negative list offers in their bilateral investment treaty negotiations, POLITICO has learned. The new offers will
likely be a point of discussion as U.S. and Chinese negotiators close out a weeks worth of meetings today, although the

committed at
last week's high-level Strategic and Economic Dialogue to
updating market access this week. Beijing last updated its negative list, which lists
gathering in Washington is not being considered a formal round of talks. The two sides

sectors excluded from investment liberalization, in September. U.S. Treasury Secretary Jack Lew on Thursday said he had

[China] certainly led us to expect

a list that would be the basis for working together going
forward, even though it wouldnt be the final end result. I
not seen a full analysis of Chinas revised offer. "But

hope thats the case when our experts go through the list, but the jury is out because it still really is happening in real

Lew
said he still hoped the two sides could strike a deal before
President Barack Obama leaves office on Jan. 20 and wanted to see
as much progress as possible before U.S. and Chinese leaders meet in September.
But I dont think we have any interest in an agreement
for the sake of an agreement, so it will either be a good,
ambitious agreement or it will not happen, he said. Up
until this last round, the negative lists that weve seen
have not been sufficiently ambitious to open enough of
the economy for the BIT to have a successful path
forward, Lew said, meaning they would not get the
necessary two-thirds votes in the Senate to win approval.
time, he said at an event hosted by the American Enterprise Institute. LEW HOPING FOR BIT UNDER OBAMA:

BIT not inevitable requires Senate ratification once

negotiations are concluded
Bergsten 2015 senior fellow and director emeritus, is the founding
director of the Peterson Institute for International
Economics (C. Fred, A BILATERAL INVESTMENT TREATY AND
ECONOMIC RELATIONS BETWEEN CHINA AND THE UNITED STATES,
https://piie.com/publications/briefings/piieb15-1.pdf)

The US administration is aggressively pursuing all the

negotiations cited earlier, at both the megaregional and plurilateral levels. However,
its ability to win congressional support for any or all of
those efforts is uncertain. The administration sought approval of Trade Promotion

Authority (TPA) in early 2014 but was rebuffed, notably by leaders of its own Democratic Party in Congress,
and did not make much of an effort to reverse that outcome. (The somewhat similar failure throughout
2014 of the administrations efforts to win congressional support for the International Monetary Fund [IMF]
reform package that President Barack Obama agreed to at the G-20 summit in Seoul in 2010, while on a
substantively different issue, also falls within the domain of foreign economic policy and hence is another
disquieting sign.) No votes have been taken, and no specific agreements submitted recently for
congressional ratification, so no definitive conclusions can be reached. Moreover, the administration has
indicated in early 2015 that it will be making a major new effort to win political support for its trade
initiatives. However, the administrations inability to win Hill approval for its negotiating program, at least
for now, may have dampened the enthusiasm of some of its negotiating partners in both TPP and TTIP.
There has always been a close linkage between the international and domestic dimensions of US trade
negotiations, dating back to the Kennedy Round in the General Agreement on Tariffs and Trade (GATT) in
the 1960s when Congress rejected important parts of the package that the administration of the day had
worked out with the European Common Market (as it was then called). But todays uncertainties are
particularly acute in light of the ongoing backlash against globalization in the United States and polls that
reveal substantial public doubt about new trade agreements, the widely perceived (if partially inaccurate)
weaknesses of the economy and the job market, and large (if substantially reduced) trade and current

If
the BIT is concluded as a treaty, as is typically the case, it
would require congressional ratification via a two-thirds
vote of the Senate (as opposed to the simple majority, albeit of both House and Senate,
that must approve an FTA). Such a majority is difficult to achieve in the
Senate on any issue at this point in time. Even if the USChina negotiations are successful, the BIT ultimately faces
an important hurdle within the US political process ; hence there
account deficits. A unique feature of a BIT in US domestic politics could amplify these uncertainties.

has been talk of converting the BIT into a bilateral investment agreement, which would be treated like an
FTA in Congress, on the grounds that the House would have keen interests in some of the deals more farranging components, but such an effort is unlikely to survive the Rules Committees and is thus unlikely to
succeed.

Relations

Pivot argument doesnt make sense because the Asian pivot was to
focus on other coutnries in the Asian pacific so even if the pivot fails it
has nothing to do with Engaging with china because the Obama
adminstation pivoted toward Asia in order to combat a china rise, so
those dont do anything.

The BIT spills over to other forms of cooperation

prevents conflict
Jonathan Masters, 10/29/13, Council on Foreign Relations, the
renewing america interview: Jon Huntsman on the wisdom of boosting
US-China economic ties, http://blogs.cfr.org/renewing-

america/2013/10/29/the-renewing-america-interview-jon-huntsman-onthe-wisdom-of-boosting-u-s-china-economic-ties/, mm

BIT negotiationswhich he thinks

could take anywhere from five to ten yearswould help counterbalance other
bilateral challenges, such as Taiwan or cybersecurity.
Theres always something going on in the U.S.-China
relationship that causes stresses and strains. My biggest challenge
as ambassador was making sure there were enough offsetting collaborative issues that
can keep us from being completely confrontational. And
thats where something like the bilateral investment treaty really
goes a long way in keeping us at the table, working productively toward
Aside from the mutual economic benefits, Huntsman says

something thats more aspirational. My big gripe today about the U.S.-China relationship is we dont have
enough in the way of aspirational work; we dont have enough in the way of big picture, visionary
undertakings that keep us out of trouble.

A BIT boosts relations that solves tensions in the SCS

Robert Held, 6/29/16, Asia Times, China: Why reciprocity in market
access is pivotal, http://atimes.com/2016/06/china-why-reciprocity-inmarket-access-is-pivotal/, mm

The net outcome of bringing BIT negotiations to a fruitful

conclusion would signal a greater amount of trust between the
worlds two largest economies. And considering their ongoing
geopolitical competition around the South China Sea, that
may go beyond the economic realm. Indeed, a BIT would
alleviate a variety of issues for both countries. First, it could
be a sensitive way of compelling China to commit to its own goals of
opening up these sectors to competition and private international
investment. Second, according to the US-China Business Council (USCBC), a highquality US-China BIT would give American companies
better access to Chinas market, and equal rights as Chinese firms, [and] provide
American companies with a better opportunity to expand in China. Third, a BIT could help
alleviate Chinese concerns over the activities of the
Committee on Foreign Investment in the United States
(CFIUS). China has a long history of complaining about the CFIUS blocking its investments into the US, but
a BIT could lead to greater transparency in the review process and clarification of review criteria for both
private firms and SOEs.