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ASEAN Calls for Unity Amidst US - Sino Rivalry


ASEAN leaders and delegates pose for a photo during a working lunch on the sidelines of the 33rd ASEAN summit in Singapore, Wednesday, Nov. 14, 2018.

Singapore urged regional leaders gathering Wednesday for a regional summit to unify and warned against threats to multilateral cooperation and international norms.

“The existing free, open and rules-based multilateral system, which has underpinned ASEAN’s growth and stability, has come under stress,” said Singapore’s prime minister Lee Hsien Loong at the opening ceremony of 33rd Association of Southeast Asian Nations (ASEAN) summit and other related gatherings.

"It is unclear if the world will settle into new rules and norms of international engagement or whether the international order will break up into rival blocs," he warned.

Lee urged the ten member countries of ASEAN to remain united and said that given challenges such as trade uncertainties and technological disruptions, multilateral cooperation is now “more urgent than ever.”

ASEAN Centrality

ASEAN is facing increasing external pressures including the escalating U.S. – Sino rivalry in the region. Its members are concerned trade tensions between Washington and Beijing could trigger protectionist measures by other countries.

U.S. President Donald Trump’s “America First” foreign policy and his shunning of multilateral frameworks is also causing anxiety for a region dependent on global free trade.

Katherine Tseng of the National University of Singapore’s East Asian Institute said Trump is causing "great concerns if the aim is to de-emphasize ASEAN centrality."

The ASEAN centrality concept refers to ASEAN's role in the regional security architecture, regional order, and the power dynamics among external powers that have interests in the region.

Tseng added that to member countries, ASEAN centrality is a must to defend the region from “undue foreign intervention.”

“With the risk of trade fight escalating with the two largest economies, I suppose there’s more urgency among the ASEAN 10 to work together,” said Song Seng Wun, an economist in the private banking unit of CIMB in Singapore. From the prime minister, he said, “the message is that we have to help ourselves first and look for opportunities wherever they may be.”

Anything that raises costs without adding to global growth impacts places such as Southeast Asia, Song said. Many Southeast Asians are poor and hope foreign trade will bring jobs.

Bilateral Agreements

ASEAN has free trade agreements with all of the major economies in Asia-Pacific, including China, Japan, India, South Korea and New Zealand. In the past it has said it is open to a free trade agreement with the United States. But the Trump administration has signaled a preference to deal with ASEAN countries bilaterally on trade.

On the sidelines of the U.S. – ASEAN Summit in Singapore, Vice President Mike Pence, who is representing the administration on behalf of President Donald Trump, held a series of bilateral meetings with leaders.

With Prime Minister Nguyen Xuan Phuc of Vietnam, Pence pushed for further reduction of trade barriers. Pence said that while the U.S. - Vietnamese economic relationship is “strong,” he wanted to discuss “how we might have a more fair and reciprocal trade arrangement going forward.”

In Tokyo, the first stop of his week-long Asian tour, Pence also kept pressure on Japanese Prime Minister Shinzo Abe to reduce Japan's trade surplus with the United States.

Regional Comprehensive Economic Partnership

Meanwhile ASEAN and its major trading partners continue to work on what potentially may become the world's largest trade deal, without the United States.

The Regional Comprehensive Economic Partnership (RCEP) is a proposed free trade agreement between the ten member countries of ASEAN and six Asia-Pacific states including China, Japan and India, with which the regional bloc has existing free trade agreements.

Amid anxiety over a potentially increasingly protectionist environment triggered by the U.S. – Sino trade war, ASEAN and partners have agreed to redouble efforts to conclude RCEP but failed to agree on key terms in Singapore.

Chinese Premier Li Keqiang, who is rallying support for the deal at the summit, said he hoped the deal would be signed and implemented by 2019.

"It is going to deliver real benefits to the people of our region," Li said in his speech to ASEAN leaders, adding that China is now “the standard bearer of global free trade.”

TPP

Analysts see RCEP as a way for Beijing to fill in the vacuum left after the United States, under President Trump, last year pulled out of the Trans Pacific Partnership (TPP), the free trade agreement between 12 Asia-Pacific countries.

Angela Mancini, head of the Southeast Asia consultancy group Control Risks, sees the U.S. exit from the TPP as a big loss. She said the United States spent a lot of time and energy trying to get into the Asia Pacific market, to help write the rules of free trade and then “unilaterally gave that up.” Other countries in the region, like China, are “moving into that space,” she added.

TPP was a signature foreign policy initiative of the Obama administration.

Briefing reporters before Pence’s trip to Asia, a senior Trump administration official said that TPP and multilateral deals they’ve had in the past have “not delivered on the promise that were made by those who negotiated them.”

The remaining 11 TPP countries are pushing through with the deal without the United States.

The U.S. – ASEAN Business Council, a lobby group for American businesses, is watching closely the progress of RCEP. The council’s Marc Mealy said he understands President Trump’s preference for bilateral agreements but urged the administration to consider whether it would be in “America’s interests to really look at doing a U.S. – ASEAN free trade agreement one day.”

ASEAN has a population of 630 million, with a combined GDP of $2.4 trillion. The 10 countries - Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam - are the fourth largest export market for the United States, and the number one destination for U.S. foreign direct investment in Asia.

Nike Ching, Ahadian Utama and Ralph Jennings contributed to this report.

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