American Thought Leaders - An Impending Disaster for America in the Pacific?–Grant Newsham

Episode Date: February 27, 2024

In the pending $95 billion security aid bill, most of America has been focusing on U.S. aid to Ukraine, Israel, and Taiwan. But few noticed that key funds for another region were removed—an action that could give communist China control of much of the Pacific.Grant Newsham is an expert on Asia-Pacific, a senior fellow with the Center for Security Policy, and author of “When China Attacks.”Views expressed in this video are opinions of the host and the guest, and do not necessarily reflect the views of The Epoch Times.

If they don't get this right, they will be known as the people who handed the Pacific to China. In the pending $95 billion security aid bill, most of America has been focusing on USAID to Ukraine, Israel, and Taiwan. But few noticed that key funds for another region were removed, an action that could give communist China control of much of the Pacific. Every president of these nations has a blank check from China on his desk. They haven't cashed them yet. And all they have to do is say to the United States, yes, we have a treaty, but we don't think it applies. What is really at stake here? Today,

I sit down with Grant Newsham, an Asia-Pacific expert, a senior fellow with the Center for Security Policy, and author of When China Attacks. It's not just in jeopardy. This is in extremis. We're about to lose. This is American Thought Leaders, and I'm Jan Jekielek. Grant Newsham, such a pleasure to have you back on American Thought Leaders. Glad to be here. Thanks very much. Grant, you brought something to my attention recently, which I find incredibly concerning. The U.S. has a relationship with these compact countries, Micronesia, Marshall Islands, and

Palau, govern about 6 million nautical miles of territory that essentially has been under U.S. military control, in defense, of course, since World War II. And that may be in jeopardy. And I just find that absolutely astonishing. Tell me about this. Sure. Well, it's not just in jeopardy. This is in extremis, which means that we're about to lose. And these three countries that you've mentioned, they're right in the middle of the Central Pacific, and they occupy a huge amount of terrain. It's about as big as the continental United States. So think of a map of the Pacific, and you look at Hawaii, and then you go west, and you will run into the Marshall Islands and then Federated States of Micronesia and then Palau. And when you're at Palau you're

almost at the Philippines. So you have this very long corridor, this huge territory where the Americans have, since World War II, we have had total control, total dominance of this area because these countries have signed treaties with us, the Compacts, which say that in exchange for financial aid and some other benefits, these countries will allow the Americans to have sole and exclusive military access to their territory and the right to keep any other foreign military out of the region. And this is a privilege that we've had that we've seemed to have taken it for granted. And we have thought, well, it'll always be ours because we have a treaty. And we are now

in danger of losing this. And to the point that you could have foreign military start to come in, or that we would not be welcome there, we would not have the free access. Try conducting military operations in the Pacific all the way to the Asian mainland without having a secure Central Pacific. These countries are a high-speed corridor, is one way to look at it, that gives the U.S. military access to Asia and back, and also access to move north to Japan, south to Australia. If you don't have control of that, then you're going to have a very hard time defending anything in the Pacific. And you will eventually find yourself really defending the United States from, at best, Hawaii and quite possibly the American West Coast. You know, that's astonishing. These people

actually serve in the U.S. military. That's actually part of the deal, as I understand, at significantly higher rates than most states, actually. These are very pro-American people, traditionally at least. Oh, very much. And the thing that always comes up today, we're spending incredible amounts overseas. There's just a new bill sending, I don't know, I forget how many tens of billions to support Ukraine. There's a lot of spending and people are asking. There's a lot of questions being asked. So what is in jeopardy and what is the price tag for what you're talking about? I should explain that the reason why this is in danger is because

parts of the treaties that deal with the financial aid America gives these three countries and the other support services. These have been up for renewal. The treaties have been signed, but Congress hasn't passed them. So they're not going anywhere. And the amounts of money we're talking about in terms of finance, it's about $120 million a year for the next 20 years. I just want to remember that, like a million, right? Because generally when we talk about these sorts of aid scenarios,

we're always talking billion, right? Oh, you're right. We think that unless it's a billion, it isn't really much money. We're talking millions here, $120 million. And the legislation, which is currently in Congress, or the Senate has passed it and now Congress will decide on it, this is a $95 billion sort of security assistance bill, and about $60 billion goes to Ukraine. And the legislation actually had provision to pay the $120 million a year for the three compact states, which is what they call them. And it was mysteriously removed under obscure circumstances at a meeting, I'm told, between Chuck Schumer, Mitch McConnell, and Susan Collins of Maine, and Patty Murray of Washington. It was in the, before this meeting, the provisions to pay for the compact states was in there,

and after the meeting, it was gone. And $120 million, you just can hardly believe how little money that is in the context of the U.S. budget. For example, in Afghanistan, we were paying about $48 billion a year for operations, $48 billion. And this was every year for a good long while. So we ended up spending about a trillion dollars. If you've paid $120 million a year for 20 years to the compact states, you will have spent something like $2.3 billion versus the $45-48 billion we were spending a year in Afghanistan. Which is just, again, we get lost in these numbers, but that's $48,000 million versus versus 120 million. That's how it is. And keep in mind

that Afghanistan was a country of no strategic significance to the United States, none. And now we're talking about three countries that occupy really the center of the Pacific Ocean and are indispensable to America's defense position. So we talk about how we defend against the People's Liberation Army. We keep China sort of in check by defending along the line from Japan to Taiwan to the Philippines and down to Malaysia. And that's our first so-called first island chain. And we always talk about how we have this great relationship with Japan.

Japan is building up its military. The Philippines, we're doing more with them. They're taking their military seriously. We're helping the Taiwanese out more than we ever have. Well, you can do all this all you want. You can do it as well as you want. But if you don't look at what's happening in your rear area, you're going to lose. But the amounts of money we're talking about, it's just embarrassing that we're actually

arguing about it. And it strikes me that when this provision was removed from the legislation, and that it presumably was done to save money. And this is a bit like in a hospital. If they want to save some money, so they want to reduce their electricity costs, so they start pulling plugs out of the wall. And, yeah, you'll save some electricity, but what if one of the plugs is the one that keeps the life support systems, the life support machines going? You've lost a whole lot more than just the little bit you're

going to save. And the people in these countries want us to live up to our promises. And as you said, they serve in the U.S. military at higher per capita rates than almost any U.S. state. And they have this long association with us. They have a real affection for the United States. I mean, go there and you will see it immediately. And there's really an irritation, almost a bafflement, at getting stiffed by the U.S. government. And they thought they had a deal. And they know the amounts of money aren't much. Well, and I just want to add, you know, I've had the former president of Micronesia on the show, President Penuelo, has been explaining in intricate detail the level of Chinese Communist Party, of PLA subversion in these states, particularly in Micronesia, of course, which is kind of astonishing, actually. This is not being done in a vacuum.

This is being done in a context where the Chinese regime has been putting all sorts of effort into co-opting these countries and basically getting them on their side. And, of course, a lot of it through just money talks. And that's how they've done a lot of their diplomacy, even though it's kind of being revealed in many places to be short term. If you're running out of money, then you're looking to the next best offer, I guess. And they don't want that, really. But I guess some of them want that. The CCP always comes bearing these very attractive gifts, let's say. Oh yeah, the senior officials in some of these islands have been overheard

actually saying, we don't do this by choice. We do it because we don't have any alternative. What you pointed out is important to note that it's not just the Americans not being willing to pay this tiny amount of money. It's the Chinese are there waiting to slip in. And they have already been they've been doing this for 30 years at least. And the Chinese commercial presence in all of these countries is immense to the point they they dominate the main industry, which is fishing in each of these places. And that commercial presence, it's not just sort of fisheries, but the street corner shops, so much of the commercial activity has a Chinese presence.

And that leads to political influence. And the political influence is, of course, greased with bribery of all sorts in these places so that you can buy a constituency. And you also have people in each of these islands who think, well, China's the best alternative. They promise they're going to send tourists and fill up the hotels. In fact, they have done it in some cases and then cut it off when they weren't happy with what the governments did. But nonetheless, this is where the economic bounty, the wherewithal is seen as coming from. There's not a whole lot of Americans on the ground in any of these places,

but you do find a considerable number of Chinese of all sorts. You know, one of the things that just straight, I have to mention this. Someone pointed this out and it just resonated with me in a different scenario, but I keep thinking about it in this scenario. It's like, can our leaders really understand that things, there are second order effects to any action or inaction, right? And so, you know, let's say you're very fixated on, and it makes sense, right, on Middle East, Russia, Ukraine, these things deserve attention.

That's true. Forget about this part of the world, but the effect of that can be so massive. Like a small intervention could lead to a massive cost. This is essentially what we're arguing, but it's like we lost that ability to see that is the question that effectively this person was posing. I keep seeing that in all sorts of milieus. Well, you do wonder if we ever had that ability. I'm not so sure that it's not human nature

to just focus on the immediate thing and not so much see what the ripple effects are going to be. But this is one where there's enough empirical evidence to tell us what's going to happen. And you've got really 30 years of Chinese activity. You have Chinese statements of what they intend to do, which is to push us out of the Pacific, for starters. They're fighting a political war. They haven't fired a shot, but you can see how they have subverted the populations and shifted them away from the United States. It doesn't help when the nation's best friend doesn't seem to be all that interested. In fact, the expression benign neglect was actually coined many years ago by somebody who was talking about these

three states and the nations in the Central Pacific, Palau, Federated States of Micronesia, and Marshall Islands. It's, you know, we just leave them, you know, we'll give them a little help, but otherwise just leave them just leave them to the island life. Well, the Chinese are here offering them something better. And vacuums tend to get filled, and we've left a vacuum there. And I would note that it's not as if the People's Liberation Army is going to show up tomorrow. But what you could easily find if these agreements are not kept is that in these countries, as I said, there are people whose patience is not unlimited. And every president of these nations has a blank check from China on his desk. They haven't cashed

them yet. And all they have to do is say to the United States, yes, we have a treaty, but we don't think it applies. At that point, what do the Americans do? Do they send in the Marines? Do we occupy these places to keep these people who don't want us there in check? What do you do? It takes so little to avoid all of that, the second-order effect, the ripple effects. Of course we wouldn't do that. It's kind of an unthinkable situation at this point. I mean, in my mind, the bottom line is, what needs to happen here? Well, what needs to happen is that Congress in Capitol Hill and also the White House needs to get involved here. They can't just say like they

are, oh, it's Congress's fault. Well, the White House didn't take care of this issue long enough in advance so that it could be worked out before the last minute. And for them now to say, well, it's Congress's fault and it's the Republicans' fault. It's just wrong. But what needs to happen is the Congress in particular needs to restore the provisions in this bill that the Congress is now going to consider. They need to restore those provisions at the full funding, not some part of it, but all 120 million a year, as I said, it's about 2.3 billion over 20 years. They need to put all of that back in immediately and to have the measures passed and to get us sort of back on track with these three island nations. And this is where the leadership of, I'd say, the Congress and the Senate needs to realize that they are in the position where if they don't get this right, they will be considered the people who gave the Pacific to China. And to pay for this mistake,

it is as it usually is, it's going to be a lot of sailors and Marines and Army and Air Force people who are going to die. And this is something that doesn't take a genius to figure out. So for this tiny amount of money, you can avoid an awful lot of trouble. Because if you don't do this, you're going to end, if things continue as they are in the Pacific, you're going to have to fight your way back. And this is the same place we had to fight through to get to Japan in World War II. It's going to cost lives, and it just costs so little. The people there want us, and it's just baffling that we cannot get this done. This is where congressional leadership and the leadership of the Senate need to get this fixed.

All this fixation on Ukraine, Israel, Taiwan, yes, this is important. Make no mistake. But if you can't do this bit as well, well, we're going to lose in Asia. And it doesn't matter what we do for Ukraine, Israel, or anywhere else. If you don't get these tiny agreements and just tiny amounts of money allocated, that we are going to be in a position in Asia, in the Pacific, that makes the retreat from Afghanistan look pretty good by comparison. And it's unfortunate that we have got to this. And once again, the White House has a role in this as well. You know, if they were arguing

over a small amount of money, well, is there a reason the administration couldn't say, you know, somewhere in all of this federal spending, well, we've somehow found 120 million a year that, you know, we can offset, which is what it's called for. So I'd say it's not just Congress's fault. White House has a role. It's almost been a bipartisan achievement. But one thing I would note in all of this is that to get the bill, the relevant part of the legislation, where it needs to go. It had to pass through about 12 congressional committees,

and even committees on Capitol Hill. Basically, all the work's been done. And it is incredible work that was done by legislators and their staff. It was astonishing to see how well they did. And this was Democrats and Republicans who all understood the importance. And at the very last minute, it pulled out. And I know there's a lot going on, of course, on Capitol Hill. And maybe someone just didn't notice that this was really important. But regardless, it needs to be put back in. But I really do credit where it's due, and there are a lot of people on Capitol Hill who did very good work to get it where it is.

In football terms, it's about on the one-inch line, and they just can't get it over. In fact, I guess the coaches have called the wrong play, in fact, and sort of pushed it back to the six-foot line, six-yard line. But there's no reason this cannot get done. But it really does need to, and I'm not inclined to hyperbole, because most things, either they don't matter as much as people say they do, or they can wait a while. But this is one where the only people who are happy about the state of affairs

are the people in Beijing. And if I was them, I would be delighted at what's going on because they can say, look, these Americans don't even like you enough to pay, but we're here, and what do you need? It strikes me like this is something that the CCP would be very interested in lobbying against somehow. How would they be achieving that if indeed they are doing that?

You know, I've wondered about that because they lobby for everything else. And in this case, I don't know if it's just the short-sightedness, the just stupidity that's behind this. You know, I don't know if there's a sort of malevolent influence involved here. I think often there is. You see it, for example, on efforts to control technology exports to China or financial investments. There are lobbyists who are all over the place. You saw that phalanx of American lobbyists behind the TikTok CEO when he testified before Congress a few months back. They've got their people on their payroll. But in this case, I don't

understand exactly even why they would need to do it. I understand why they would want to, but it seems as though we're doing this to ourselves. And this is one where it shouldn't even be an issue. Exactly what is the argument against funding this? The U.S. government can't afford $120 million? It's so silly. We've, as I said, the $48 billion to Afghanistan every year, and even now we're paying millions to the Taliban, supposedly for humanitarian assistance things. We've had our borders opened up,

and apparently in the last two years about $20 billion has been paid to, I think, provide cash cards to the illegal immigrants. Probably a little more than that, but yes, migrant support aid. That's right, that's opened the books, not estimate, that's what they found. So the money is there.

And so, say, I don't know what the argument against it would be. Save money? You know, to show responsible fiscal stewardship? You know, that would be like stand-up comedy to try to argue that. And to argue, well, we don't really need the relationship with these three countries in the Pacific, which secure our rare area, which is indispensable to our entire defense position, and also to try and replace the

defense benefits we get from that secure control of the Pacific. A rough estimate, nobody has ever challenged me, is that you would have to start at about $100 billion if we had to actually militarily defend the position that we get from the COFA agreements. $100 billion. And all we're asking, all that's being asked is $120 million a year. So I'm perplexed. Why do you think war with China under the CCP is inevitable? Because essentially, that's one of the assumptions in what you've been arguing here. It is inevitable, I think, unless the Chinese Communist Party wakes up one morning and decides it wants to be nice. It's because China wants it. But also, I would point out that the kind of war we're talking about, if you think of everything that's

happened to date, where the Chinese have got a real strong presence in each of these three countries, but also every island country in the Pacific, not just these three, and they've done it without firing a shot. And as I said, it's political warfare. It's the commercial influence, political influence, the bribery, intimidation in some cases, and the propaganda, and pointing out things like, well, the Americans aren't really reliable. Well, we're proving that case for them. But this is all being done non-kinetically, without shooting. And the shooting part only comes at the last stage, if it's even necessary. If these countries just tell us, look, we don't think the treaties apply, we don't want you here.

In fact, we need Chinese police support. We need Chinese to help us guard our waters. We are in a very difficult position at that point. So what I point out is Chinese behavior is clear what they intend to do, but also they have said what they intend to do, which is to push us out of the Pacific, for starters. It was probably, goodness, have been 15 years ago roughly, that a Chinese admiral said to the then commander of Indo-PACOM, Admiral Keating, he said, well, you can have east of Hawaii and we'll take west. How's that for a deal? And the Chinese always telegraph their

punches. So, you know, this is where we are. You have this assertive, aggressive, hyper-nationalistic dictatorship, totalitarian dictatorship, which wants to push us out and dominate us. And if that continues, and we don't check it, and also counterattack, that we are ultimately going to come to a point where we either fight or submit. It's unfortunate. I thought history had ended about 30 years ago and we had won. Those people were wrong. But human nature doesn't change, and I think we can see what's coming.

Final thought as we finish, Grant? One thing I do want to stress this again, because I've seen it, I actually saw it in action. And it really changed my impression about Capitol Hill over the last few years dealing on Pacific Island matters. I must say, I thought that in general that you would find layabouts and good-for-nothings up on Capitol Hill. But I have been impressed, and I hate to say it, but I have been impressed really with the quality of so many of the legislators that I've come across and also their staff. And I say to get these three treaties where they needed to be was something that I'm impressed with. And now they just need to finish it off. This is one where you look around the world and you see that America goes a lot of places where people either don't want us or they don't really care or they're indifferent, and we're just desperate to make friends with them.

So we do all sorts of things to try to ingratiate ourselves with them. In the Central Pacific, in these islands, these are people who want us there. And there's not so many places where you can say that. These are people who have had the trust in us that they have allowed us to take care of their national defense. No other countries on Earth have ever done that. And these are people who are our friends, and we should treat them like that. And I will state this again, that if this isn't done, that the people who are responsible for it, they can point fingers anywhere they want, but they will be known as the people who handed the Pacific to the Chinese,

to the Chinese communists. And if worse comes to worse, and it probably will, once again, it's going to be these Americans from flyover country who pay the price for it. So I hope we really do the responsible thing now. There's a lot of people watching, and the Pacific matters as much, if not more, than any other place that they're arguing about up on Capitol Hill. Well, Grant Newsham, it's such a pleasure to have had you on.

Well, thank you very much for having me. I appreciate it. Thank you all for joining Grant Newsham and me on this episode of American Thought Leaders. I'm your host, Jan Jekielek.