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Biden must build stronger trade ties with ASEAN

Kevin Rutigliano
11 Dec 2021 00:00:00 | Update: 11 Dec 2021 02:12:58
Biden must build stronger trade ties with ASEAN

A couple of months back, US President Joe Biden attended a virtual US–ASEAN summit meeting — the first time in four years that the United States engaged at the highest level with the 10-member bloc. During his speech, Biden said that Washington is committed to the central role ASEAN has in the Indo-Pacific region.

He also announced plans to provide US$102 million in spending to expand the US–ASEAN strategic partnership, which will go toward economic, climate, health and education programs.

The United States had not met with ASEAN at the presidential level since former president Donald Trump attended a meeting in Manila in 2017. Biden’s attendance and remarks at the summit signal that Southeast Asia is a higher priority for the current administration. But Biden will need to deepen trade ties with the region to convince ASEAN countries that the US commitment to Southeast Asia will be long-lasting.

Washington has continued to build up security relations with traditional regional partners, such as Thailand, Singapore and the Philippines, and consolidate security ties with Vietnam. It has also continued to carry out freedom of navigation operations in the South China Sea to pushback against Chinese behaviour there.

But the formation of AUKUS — a trilateral security alliance with the United Kingdom and Australia — and increasing engagement with the Quad signify a US shift towards ad-hoc multilateralism.

ASEAN’s reaction has been ambiguous, with some members concerned that these initiatives could undermine ASEAN’s central place in the regional architecture. Despite these concerns, the United States remains the top security partner for most ASEAN countries.

Washington has lagged behind Beijing when it comes to trade ties with ASEAN. Over the past decade, China has significantly increased bilateral trade with ASEAN countries through the implementation of the ASEAN–China Free Trade Agreement, which went into effect in 2010. In 2009, trade between ASEAN and China stood at US$178.18 billion, compared to an estimated US$685.28 billion in 2020. Total trade between ASEAN and the United States grew from US$148.78 billion to an estimated US$362.2 billion during the same period.

Both China and ASEAN are part of the Regional Comprehensive Economic Partnership (RCEP), the world’s largest free trade agreement, which covers 30 per cent of the global economy. RCEP is likely to further entrench China’s economic influence in ASEAN after it goes into effect in 2022. By comparison, the United States only has one free trade agreement with an ASEAN country, Singapore.

To increase economic ties with ASEAN countries and push back against Chinese economic influence in the region, the United States should rejoin the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Under the Obama administration, the United States tried to increase its trade with the region through the Trans-Pacific Partnership, a 12-member free trade agreement including four ASEAN countries — Brunei, Malaysia, Singapore and Vietnam. But president Trump withdrew from the deal in 2017.

The remaining members of the pact kept a version of the deal alive through the CPTPP, which went into effect in 2018. Rejoining the CPTPP would increase US economic influence in Southeast Asia. The United States would increase its trade ties to the four ASEAN countries in the agreement and economic ties to ASEAN countries that have not yet joined the pact.

Thailand, the Philippines, Indonesia, South Korea and the United Kingdom have all expressed interest in joining the CPTPP. The addition of the United States would likely make the trade agreement more attractive to these countries. Such an expanded CPTPP would represent over 45 per cent of world GDP, which would enable CPTPP to shape global rules and standards moving forward. Biden’s high-level diplomacy carries some important elements.

First, the Biden administration wants to re-build trust with US allies and competitors. Biden believes that ‘in international relations, all politics is personal because it’s all ultimately based on trust’ and ‘personal relationships are the only vehicle by which you build trust’.

Second, Biden seeks to facilitate a convergence of interests with other nations rather than egoistically pursuing US self-interest. He prefers frank interlocution to flesh out his counterparts’ interests, concerns and expectations, so that both sides can easily find common ground to overcome differences and cooperate for mutual benefit.

Third, the Biden administration has arranged diplomatic activities with a professionalism unthought of during the Trump administration. The logic is to reassert US leadership on the world stage through amending ties with allies and partners, and by placing pressure on competitors through dialogue — with US allies and partners at his back.

Biden seeks to strengthen an international coalition of like-minded major countries, reassuring allies that they will always have the support of the United States. Biden has also conveyed a clear message to Washington’s strategic competitors — namely China and Russia — that the United States will compete, collaborate and confront to maintain adherence to the rules-based liberal international order.

At the same time, Biden has ‘acted from the heart’ by conducting parallel diplomatic efforts with geopolitical competitors such as Russia. In June, he discussed strategic stability with Russian President Vladimir Putin by giving him an equal footing, describing the United States and Russia as ‘two great powers’.

The Biden administration has given no indication that the United States will join CPTPP, partly due to the protectionist political climate at home. Instead, Biden announced at the East Asia Summit that Washington will begin discussions on a regional economic framework with its partners in the Indo-Pacific. While statements indicate that the framework would likely include initiatives for cooperation on tech, infrastructure standards and supply chains, cooperation in these areas is already happening in the region.

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