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SEAN will likely face another round of the US-China rivalry when the leaders of the world’s two largest economies meet at the East Asia Summit (EAS) in Bali this week after the APEC meeting this weekend.

Although the immediate battle between China and the US will be on the shape of the region’s trade and investment architecture, US President Barack Obama will deliver a speech on the US’ intention to increase its military presence in Asia and speak on closer defense ties with Australia in Darwin before visiting Bali.

Economic cooperation will be the principal item on the agenda for the EAS, as the region has yet to feel the effects of the eurozone crisis.

However, how economic cooperation will play out in the region will likely lead to a showdown between China, the US and other regional players, including ASEAN.

With US voters expressing growing dissatisfaction with high unemployment and the economic slowdown at home, Obama is under pressure to find markets for US products and investment opportunities for US business while he is overseas.

Obama’s critics have knocked the president for leaving amid another fight over budget with Congressional Republicans.

Since APEC’s 2009 meeting in Singapore, Obama has focused on developing the Trans-Pacific Partnership (TPP) agreement, aiming to open Asia-Pacific markets to the US.

The US-led TPP talks also include Australia, Brunei Darussalam, Chile, New Zealand, Peru, Malaysia, Singapore and Vietnam.

China has contested its exclusion from the framework, saying that it preferred to negotiate accords that met World Trade Organization standards.

Meanwhile, China has been pushing ASEAN behind the scenes to agree to a regional free trade agreement to counter the TPP.

The TPP also faces strong opposition from Japan, another important regional player, despite backing from Prime Minister Yoshihiko Noda. Japanese businesses, including farmers, for example, worry they will lose ground under the TPP.

Japan has also proposed negotiating a free trade agreement with ASEAN to counter the TPP.

“Japan and China have pushed ASEAN to decide which regional economic framework we want to accept,” Rahmat Pramono, the director of ASEAN economic cooperation at the Indonesian Foreign Ministry, said.

Japan and China, according to some officials, have agreed to merge their proposals into an ASEAN Plus 5 FTA that includes the 10 ASEAN member nations plus Australia, China, Japan, New Zealand and South Korea.

Meanwhile, ASEAN officials, especially those from Indonesia, said they feared that the TPP would erode ASEAN’s central role in building a regional architecture, as the presence of four ASEAN members in the TPP would damage the association’s unity.

Those fears have given rise to ASEAN’s own proposal for a regional economic framework that would be launched by ASEAN leaders as a stand-alone declaration at the close of ASEAN summit on Friday.

One official who declined to be named said the framework would consist of general FTA articles containing elements of FTAs previously signed by ASEAN with its dialogue partners. Any country that wanted to join the ASEAN regional economic cooperation agreement would have to become a party to the framework, the official said. “We will have an economic TAC [Treaty of Amity and Cooperation] for those who want to join the economic free trade agreement with ASEAN,” the official said.

With ASEAN insisting on maintaining its central role in the region, Obama will have to compromise, as both sides have garnered huge economic gains in doing business with each other.

According to a draft of the US-ASEAN joint statement to be released after Obama’s meeting with ASEAN’s leaders, total trade between both sides showed a sharp rebound in 2010, increasing 24.4 percent to US$186.1 billion, up from $149.6 billion in 2009, making each the other’s fourth-largest trade partner.