Obama seeks to hitch U.S. economy to Asian growth

By Laura MacInnis and Caren Bohan

CORONADO, California | Fri Nov 11, 2011 9:04pm EST

(Reuters) - With Europe mired in crisis, President Barack Obama is launching a charm offensive this week to hitch the U.S. economy to opportunities in Asia he hopes can help power the recovery he needs for re-election.

Obama, who was born in Hawaii and spent part of his childhood in Indonesia, will host leaders of the Asia-Pacific Economic Cooperation forum, including Chinese President Hu Jintao and Japanese Prime Minister Yoshihiko Noda, in Honolulu this weekend to seek to improve trade ties across the region.

He will then travel to Australia to announce plans to boost the U.S. military presence in the region and will be the first American president to attend the East Asia Summit in Bali, where he will heap attention on the Philippines, Thailand, Malaysia and Indonesia as well as India.

The campaign to cozy up to Asian powers large and small comes at a critical moment for the U.S. economy, whose recovery is at risk because of a spiraling debt crisis in Europe that dominated a summit of Group of 20 leaders in France last week.

"To have this trip happen when you have nothing but crisis in Europe and nothing but opportunity in Asia, you couldn't have more of a juxtaposition," said Victor Cha, who advised President George W. Bush on Asian affairs.

Georgetown University professor Charles Kupchan said he expected the Asia swing to be "much more upbeat" than the trip to Cannes had been for Obama, whose re-election chances in November 2012 hinge on his economic record.

Executives from companies such as Boeing, Caterpillar, General Electric and Time Warner Cable are also attending the APEC summit in Hawaii to help Obama make the case that closer ties with Asia will help create U.S. jobs.

"When you look for rays of light, where is growth going to come from, one of the main answers is exports to Asia," Kupchan said. "It is something that this president needs to focus on, particularly in an election season."

Obama and his wife Michelle were scheduled to arrive in Honolulu later on Friday.

En route to Hawaii, they stopped at Naval Base Coronado near San Diego to attend the Carrier Classic college basketball game being held on the flight deck of the USS Carl Vinson, the aircraft carrier used for burial at sea of al Qaeda leader Osama bin Laden in May.

During the trip, Obama will not be able to leave the European financial crisis behind entirely.

Asia-Pacific finance ministers meeting before the leaders' summit fretted about Europe's lack of strong action to deal with crises in Greece and Italy and talked of ways to bolster their economies to minimize spillover.

PACIFIC POWER

Obama will also seek to reassert the U.S. role as a Pacific power, shifting more of its budget-stretched military resources to Asia as it pulls out of Afghanistan and Iraq and worries less about security in Europe.

Obama wants to make clear at the summit that "the United States is all in as it relates to the Asia-Pacific region" despite U.S. budget constraints, senior White House aide Ben Rhodes told reporters.

"We believe we can ... play our role in terms of having a robust force posture even in a time of fiscal austerity in cuts in a defense budget," said Rhodes, a White House deputy national security adviser.

In Australia, Obama is set to announce an agreement for more than 2,000 U.S. Marines to train and do joint exercises from Darwin, a city with a large military presence on the country's northern coast, according to an Obama administration official familiar with the plans.

The cooperation deal is seen as a stepping stone to a more permanent presence for the United States in Australia, which could eventually see U.S. vessels stationed in Perth or nearby that could respond faster to regional threats or humanitarian emergencies than they could from Hawaii or California.

"This is part of a big push to put the United States back into the Asian game after a decade or so in which it has been preoccupied with the Middle East," Kupchan said.

Obama is likely to avoid direct references to China when making the announcement, although the agreement is widely seen as a way for the United States to act as a check on Chinese power and defuse conflicts over waterways and disputed islands.

"It is sending a very clear message that the United States is not ceding Asia diplomatically to China," said Cha, the former Bush adviser who is now a scholar at the Center for Strategic and International Studies.

(Additional reporting by Rob Taylor in Canberra; Editing by John O'Callaghan)