South-east Asia-US trade preferences debates beckon

Significance The preferential US trade programme faces renewal or lapse by December 31. South-east Asia’s economies are structured to take advantage of the GSP and many of the products exported to the United States under GSP (such as light manufactures and seafood) are important for South-east Asia’s supply chains. Impacts Vietnam may make another application for inclusion in the US GSP programme. The more authoritarian South-east Asian countries could find it easier to gain US GSP preferences under Trump. The Trump administration could use the GSP as a bargaining chip in trade negotiations or renegotiations.

Subject Outlook for Thai-US-China relations. Significance Chatchai Thipsunaree, Thailand’s permanent secretary in the Ministry of Transport, confirmed on May 17 that construction of the long-awaited Thai-China high-speed railway will begin this year. The project reflects the growing momentum in Thailand’s relations with China, and refiguring of ties with the United States. Impacts Trump administration officials see less strategic imperative in the US-Thailand alliance than previous administrations. China’s growing presence in South-east Asia, particularly on the Mekong, will trigger resistance from affected populations in Thailand. Thai officials will allow Chinese infrastructure projects to proceed despite local protests.


Subject Development of South-east Asian coastguards and their geopolitical implications. Significance Senior coastguard officers from Australia, Japan, the Philippines and the United States will meet later this year to discuss cooperation and capacity-building -- and the assertive actions of China's coastguard in littoral waters. With external partners' support, South-east Asian states are developing their coastguards to fight crime and assert maritime territorial claims. Impacts Fishing activities will probably trigger spats between South-east Asian and China's coastguards. Gradually, inter-operability between South-east Asian coastguards will expand. Tokyo and Washington will use coastguards to deepen ties with South-east Asian countries. There could be frictions between Indonesia's and Malaysia's coastguards over waters around Ambalat.


Subject The outlook for the current migrant crisis in South-east Asia. Significance Over the last three weeks, an estimated 25,000 Rohingya and Bangladeshi migrants have sought to reach Indonesia and Malaysia, on boats mostly abandoned by people smugglers based in Myanmar, Bangladesh and Thailand. Malaysia and Indonesia have received around 3,000 such migrants so far. Seeking a solution, a regional summit will be held in Bangkok on May 29, including representatives from Myanmar, Australia and the United States. Meanwhile, suspected people-smuggling camps discovered in Thailand and Malaysia in May have led to allegations of official complicity. Impacts Amid allegations of official complicity in people smuggling and trafficking, scrutiny of the Thai and Malaysian governments will increase. Discovery of further people smuggling camps in other ASEAN countries, and allegations of official complicity, are possible. Capacity-building for ASEAN states' police forces, and ASEAN itself, is needed to counter people smuggling and trafficking. South-east Asian countries will enhance maritime patrols to search for other migrants.


Subject South-east Asian defence budgets. Significance The pressure of responding to the COVID-19 pandemic is prompting many South-east Asian governments to cut defence spending and postpone or cancel new arms acquisitions. Meanwhile, China and the United States continue to vie for influence in the region. Impacts Piracy attacks will increase across the region as socio-economic distress rises and budgets for navies and coast guards fall. ASEAN unity will fracture as tensions among member states increase. Economic problems will cause political instability across South-east Asia, possibly even leading to military coups in certain countries.


Subject Headwinds for US-ASEAN trade. Significance The Office of the United States Trade Representative (USTR) last month withdrew ‘developing country’ status from several countries, including half the ASEAN states. This 'developing' status to a large extent protects countries that have it from US investigations into their trade practices. Impacts US companies will file more trade complaints against their South-east Asian rivals because the threshold for such complaints will be lower. More US tariffs on goods from ASEAN countries would increase the cost of doing business for South-east Asia. South-east Asian public opinion towards the United States will deteriorate.


2020 ◽  
Vol 96 (1) ◽  
pp. 131-148 ◽  
Author(s):  
See Seng Tan

Abstract This article assesses how south-east Asian countries and the Association of Southeast Asian Nations (ASEAN) have responded to the ‘free and open Indo-Pacific’ (FOIP) strategies promoted by the United States and the other countries in the Quadrilateral Security Dialogue (the ‘Quad’: US, Japan, Australia and India). Their nuanced ripostes imply a persistent commitment to hedging and shifting limited alignments in the face of growing great rivalry and the lack of a clear FOIP vision among Quad members. In the face of external pressure to take sides, the ASEAN states are likely to keep hedging through working selectively with China and the United States. Given the United States' apparent preference to balance China and Trump's disregard for multilateralism, ASEAN's ability to maintain its centrality in the evolving regional architecture is in doubt—despite the Quad countries' (belated) accommodation of ASEAN in their FOIP strategies. However, the success of the US strategy depends on Washington's ability to build and sustain the requisite coalition to balance Beijing. ASEAN has undertaken efforts to enhance bilateral security collaboration with China and the United States respectively. In doing so, ASEAN is arguably seeking to informally redefine its centrality in an era of Great Power discord and its ramifications for multilateralism.


Significance The kings of Malaysia and Thailand, respectively, are at the centre of attention amid their countries’ ongoing political crises. The pandemic-related state of emergency declared by Malaysia’s king has eased pressure on the beleaguered prime minister. Pro-democracy protesters in Thailand continue to press for reform of the country’s monarchy. Impacts Under President Joe Biden, the United States will urge several South-east Asian countries to improve their human rights records. Malaysia’s premier will face pressure from governing partners and opponents alike to call snap elections as soon as the emergency ends. The Thai establishment will steadfastly resist calls for monarchical reform.


Significance All but one of the ASEAN governments voted in favour of the resolution; the Philippines abstained. South-east Asian leaders are attempting to walk a difficult line, seeking to maintain good relations with the Trump administration while upholding their longstanding support for a two-state solution regarding Israel and the Palestinians. Impacts Opposition to the US announcement on Jerusalem could see further boycotts of US businesses in South-east Asia. As ASEAN chair, Singapore will discourage a group statement criticising Washington over Jerusalem. The Jerusalem decision will heighten domestic opposition to any trade deals ASEAN governments may seek with Washington.


Subject Piracy attacks in South-east Asia. Significance An incident of kidnapping for ransom in the Sulu Sea last week and a series of attacks on shipping in the Singapore Strait last month have refocused attention on the persistent problem of piracy in South-east Asia. The safe passage of shipping through the region’s waterways is crucial to global trade. Impacts South-east Asian states will respond to piracy outside the framework of ASEAN. The United States and Japan will take the lead in providing capacity-building support for regional coast guards and navies. Piracy in the region is unlikely to become conflated with the South China Sea dispute.


Significance Washington is highly receptive to these calls. Regardless of who wins the US presidential election next week, a digital trade agreement with South-east Asia will be a strong candidate for the next administration’s trade agenda. Impacts Washington will seek ASEAN endorsement of US principles on digital governance but avoid a trade pact with ASEAN itself. A digital trade pact would allow Washington to influence South-east Asian tax rules for US ‘big tech’. Global technological decoupling would increase if South-east Asian countries embrace US technology standards.


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