Biden must forge stronger trade ties with ASEAN

Author: Kevin Rutigliano, Thammasat University

On October 26, 2021, US President Joe Biden attended a virtual summit meeting between the United States and ASEAN – the first time in four years that the United States has engaged at the highest level with the 10-member bloc. During his speech, Biden said Washington was committed to ASEAN’s central role in the Indo-Pacific region.

He also announced plans to provide $ 102 million in spending to expand the strategic partnership between the United States and ASEAN, which will go to 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 presence and remarks at the summit indicate that Southeast Asia East is a higher priority for the current administration. But Biden will need to deepen his trade ties with the region to convince ASEAN countries that the US commitment to Southeast Asia will be lasting.

Washington continued to build security relationships with traditional regional partners, such as Thailand, Singapore and the Philippines, and consolidate security ties with Vietnam. He also continued to conduct freedom of navigation operations in the South China Sea to combat Chinese behavior there.

But the formation of AUKUS – a trilateral security alliance with the UK and Australia – and growing engagement with the Quad signify an evolution of the United States towards ad hoc multilateralism.

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

Washington has fallen behind Beijing on trade relations with ASEAN. Over the past decade, China has dramatically increased bilateral trade with ASEAN countries through the implementation of the ASEAN-China Free Trade Agreement, which entered into force in 2010. In 2009 , trade between ASEAN and China stood at 178.18 billion US dollars, compared to about US $ 685.28 billion in 2020. Total trade between ASEAN and the United States has increased of 148.78 billion US dollar to about 362.2 billion US dollars during the same period.

China and ASEAN are part of the Regional Comprehensive Economic Partnership (RCEP), the world’s largest free trade agreement, which covers 30% of the global economy. RCEP will likely strengthen China’s economic influence in ASEAN after it takes effect in 2022. By comparison, the United States has only one free trade agreement with an ASEAN country, Singapore.

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

The rest of the pact kept a version of the deal through the CPTPP, which came into effect in 2018. Joining the CPTPP would increase the United States’ economic influence in Southeast Asia. The United States would increase its trade ties with the four ASEAN countries in the agreement and its economic ties with the ASEAN countries that have not yet joined the pact.

Thailand, the Philippines, Indonesia, South Korea and the United Kingdom all have expressed interest by joining the CPTPP. Adding the United States would likely make the trade deal more attractive to those countries. Such an expanded CPTPP would represent over 45 percent of global GDP, allowing the CPTPP to shape global rules and standards in the future.

The Biden administration has given no indication that the United States will join the CPTPP, in part due to the protectionist political climate in their country. Instead, Biden announcement during the East Asia Summit that Washington will begin discussions on a regional economic framework with its Indo-Pacific partners. Although the statements indicate that the framework would likely include cooperative initiatives on technology, infrastructure standards and supply chains, cooperation in these areas is already underway in the region.

In September 2021, China has applied for membership in the CPTPP. The 11 CPTPP members are expected to approve China’s entry. Given China’s currently strained relations with Japan, Canada and Australia, this is unlikely to happen anytime soon.

But China’s candidacy for the CPTPP is a shrewd diplomatic gesture. It promotes the image that China supports economic integration in the Indo-Pacific and highlights the continued absence of the United States from the pact. This is particularly important given that ASEAN countries tend to consider economic ties as more important than traditional security cooperation.

The United States may need to join the CPTPP as soon as possible to provide an economic alternative to China and demonstrate to ASEAN the long-term commitment of the United States to the region. Otherwise, the United States might find itself less economically relevant in the Indo-Pacific as China’s influence grows.

Kevin Rutigliano is Senior Lecturer in the International Studies Program (ASEAN-China) at Thammasat University.

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