SOUTHEAST ASIA TRADE 2008 - SEA Change 2008 – South East Asia in an era of change

By: | at 07:00 PM | Channel(s): International Trade  

In November the US presidential elections were watched with great interest in South East Asia. The election of Barack Obama, who had spent part of his childhood in Indonesia, has raised the hope, if not the expectation, of better relations with the US. Yet even as this article is being written the terrorist attack in Mumbai, India and a coup in Thailand, set against the global economic mess, begs the question of what can or will change in 2009.By George Lauriat, AJOTThe key economies of South East Asia such as Malaysia, Singapore and Thailand are all export oriented and dependent of Foreign Direct Investment (FDI) for growth. In fact all the Southeast Asian nations (excepting Myrammar also known as Burma) are among the top fifty most export dependent nations. The US has a big stake in Southeast Asia from both the trade and security perspectives. The US annually exports around $50 billion in goods to ASEAN (Association of Southeast Asian Nations) per year. Only Canada, Mexico, Japan, and the European Union (EU) surpass US exports to ASEAN. In addition, US FDI in ASEAN tops $100 billion, exceeding investments in higher profile countries such as China, Japan, and India. From a security perspective the US has strategic interests in the Philippines and Thailand while nations like Malaysia and Indonesia with large moderate Muslim populations are a potential bridge the Islamic world as a whole.
However, the relations between ASEAN and the US have been uneven during the Bush years. Over the past two decades a change in foreign relationships has impacted trade and politics. In 1960s, Japan and the US had influence, by the 1970s it was the US, Japan and the new giant China and now with the PRC’s trade and diplomatic initiatives, the order might be China, US and Japan. In trade terms, Southeast Asian states have been able to piggyback on China’s enormous global export drive, particularly into Eastern Europe, the CIS and Russia. This westward shift of freight has buoyed Suez Canal traffic and movements through north European tier ports like Bremerhaven and Hamburg.
The US relationship with ASEAN probably reached the low-water mark when in July 2005, when Secretary of State Condoleezza Rice chose not to attend the ASEAN Regional Forum. The US delegation had not missed attending this meeting since the inception in 1994. Since that low-water mark, diplomatic progress has been made in trade and investment that bodes well for the new US administration. One key element was the appointment by President George W. Bush of Scot A. Marciel as America’s first ambassador for ASEAN Affairs. In a September meeting sponsored by Center for Strategic International Studies Ambassador Marciel said of the relationship between ASEAN (and South East Asia as a whole), “Recently, they [ASEAN] have focused on how we can cooperate on energy security, food security, the environment, and of course, economic development. Sure our numbers in the polls sometimes slip, and some in the region are occasionally critical of our policies and approaches. But overwhelmingly, they want increased and skillful engagement, rather than to grow apart from the US. Of course, we want closer ties too. The ASEAN region is also of crucial importance to the United States. On the economic side this interest is clear. By 2015, ASEAN plans to be a single market of 550 million people. Collectively it is our fifth largest export market with rapidly growing economies. ASEAN economic integration is strongly supported by the American private sector, which has already invested USD100 billion there.”
Global train wreck: Prospects for Trade in 2009
The impact of the global credit crunch and financial train wreck that has ensued has already been felt in Asia. In some respects, Southeast Asia is better placed to weather the mess than most but it is a matter of “U” or “V”. U or V, for forecasters, is whether this recession is going to be a deep and short-lived recession or shallower and longer lasting recession, or as some economists have gluml

George Lauriat's avatar

American Journal of Transportation