Constructive Engagement? The US and the AIIB
| Date | 01 November 2019 |
| DOI | http://doi.org/10.1111/1758-5899.12764 |
| Author | Carla P. Freeman |
| Published date | 01 November 2019 |
Constructive Engagement? The US and the
AIIB
Carla P. Freeman
Johns Hopkins School of Advanced International Studies (SAIS)
Abstract
When the Asian Infrastructure Investment Bank (AIIB) was launched in January 2016, 57 countries signed on to its charter. The
United States was not among them. It does not appear likely that the US will change its position, particularly amid deteriorat-
ing trade relations between the US and China. However, a description of the US relationship to the AIIB that is limited to
opposition and non-membership is not adequate or accurate. This analysis takes a closer look at US interactions with the AIIB,
beginning with its response to the Bank when it was announced through the time of writing in 2019. The main finding of this
reexamination is that relations between the United States and the AIIB have been and remain more multifaceted than the
conventional narrative portrays. Since Beijing announced plans to establish the AIIB, the United States has engaged the AIIB in
ways that presented opportunities for Washington to communicate its preferences with respect to the policies and operations
of the Bank.
When the Asian Infrastructure Investment Bank (AIIB) was
launched in January 2016, 57 countries signed on to its
charter. The United States (US) was not among them. Wash-
ington purportedly counselled its allies not to participate in
the new Bank. Yet many US allies nevertheless chose to join
the AIIB as ‘founding members’, including Australia, France,
Germany, Italy, South Korea Spain and the UK. By 2017,
Canada had also joined. Only Japan, among the key US
allies, has not become a member. India also set aside its
long-held geostrategic concerns about China’s role in Asia
to become a founding member of the AIIB, the Bank’s sec-
ond largest shareholder, and, since the Bank opened, the
leading recipient of AIIB loans. As of July 2019, 100 countries
had signed onto membership in the AIIB, many more than
the 68 countries in the Asian Development Bank (ADB). In
terms of the number of member countries, among other
multilateral development banks (MDBs), the AIIB had risen
to second only to the World Bank, which has 189 members.
The uneasy response of the US to the development of a
new regional development bank (RDB) is not without histori-
cal precedent. The US has generally withheld its support for
proposals for other RDBs until it has been satisfied that poli-
cies and conditions of the new bank were congenial to US
policy interests. For example, the US initially opposed the
idea of an ADB when it was first suggested in the 1950s. It
was only after President Lyndon Johnson’s expansion of US
economic aid to Asia in 1965 that the US extended its sup-
port (McCawley, 2017).
Similarly, it was after it became apparent during then Vice
President Richard M. Nixon’s 1958 visit to Latin America that
there was intense opposition in the region to many US bilat-
eral actions that the US moved to take part in the Inter-Amer-
ican Development Bank (IADB) negotiations (Lichtenstein,
2018). The US delayed its membership in the concessional
lending facility associated with the African Development Bank
(AfDB, the African Development Fund (AfDF), open to non-
African countries for several years until 1976 –membership
in the AfDB came later (Weiss, 2007). Similarly, the US joined
the European Bank for Reconstruction and Development
(EBRD) in 1991 as a founding member, but only after a period
of skepticism. US Treasury officials saw the EBRD as replicat-
ing World Bank functions and were also concerned about
Soviet membership; ultimately the US joined only when it
was satisfied that the EBRD would emphasize private sector
financing and limit lending to the Soviet Union (Weber,
1994).
After considering the aforementioned historical prece-
dence, it is not surprising that the United States decided
not to join the Bank, and that, despite the talk that Wash-
ington might reconsider its decision, this does not appear
likely, particularly amid deteriorating trade relations between
the US and China. However, a description of the US relation-
ship to the AIIB that is limited to opposition and non-mem-
bership is not adequate or accurate. This analysis takes a
closer look at US interactions with the AIIB, beginning with
its response to the Bank when it was announced through
the time of writing in 2019. The main finding of this reex-
amination is that relations between the United States and
the AIIB have been and remain more multifaceted than the
conventional narrative portrays.
Since Beijing announced plans to establish the AIIB, the
United States has engaged the AIIB in ways that presented
opportunities for Washington to communicate its prefer-
ences with respect to the policies and operations of the
Bank. For example. there were meetings between Jin Liqun,
as the president-designate of the AIIB, and the US Treasury
Global Policy (2019) 10:4 doi: 10.1111/1758-5899.12764 ©2019 University of Durham and John Wiley & Sons, Ltd.
Global Policy Volume 10 . Issue 4 . November 2019 667
Special Section Article
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