This week’s economic discussions at the US-ASEAN Summit in California could be a step towards improved cooperation and an opportunity to boost business in the face of stiff economic headwinds, according to HSBC.
The two-day summit, which concluded Tuesday, saw leaders of the 10 Association of Southeast Asian Nations (ASAEN) countries meet US political leaders to discuss issues of cross-border security, defence, trade and broader economic cooperation. It marked the first time a US-ASEAN Summit has been held on US soil and followed the elevation last November of US-ASEAN ties to a strategic partnership.
Among the trade and innovation agreements announced by president Obama was a programme he called “US-ASEAN Connect”, under which the US will set up “hubs” across the region to connect entrepreneurs and business people.
He also stressed the US’s commitment to helping nations join the Trans-Pacific Partnership (TPP) trade deal, which already includes four ASEAN members. US secretary of commerce Penny Pritzker announced workshops in which the other six ASEAN countries could further learn about “the provisions and requirements” of the deal, which aims to reduce trade barriers and raise labour standards in some developing countries.
“In this time of global economic doldrums, it makes sense to open markets and enable businesses to connect and to capitalise on new economic opportunities,” said HSBC’s senior trade economist, Doug Lippoldt. “The liberalising of trade between these two economic powerhouses can go a long way to achieving that.
“Improved cooperation between US/ASEAN can generate win/win outcomes. For the US, it means tapping into economies that are growing at two times the pace of the US economy. For ASEAN countries it means reaching a large consumer base in the US that continues to increase spending as well as accessing a market that is an important source of inputs that can help ASEAN countries increase their manufacturing competitiveness.”
The US, which ranks fourth as an export destination and import source for ASEAN, could expect to improve its two-way trade if leaders are able to translate the strategic partnership into concrete action in favour trade liberalisation, comments HSBC.
“US-ASEAN trade ties are in line to be buoyed by the TPP,” added Lippoldt. “We think that (it) can affect trade by removing not only at-the-border barriers to trade, but also behind the border barriers such as misaligned regulations that can impede trade in services or discourage investment and technology transfer.”
The international trade deal is described as the most significant since the formation of the World Trade Organisation in 1995.
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