Leaders from the member countries of the Association of Southeast Asian Nations (ASEAN) will be in Washington, D.C., May 12 and 13 for a Special Summit with President Biden. The Summit is the first of its kind to be held in Washington and is only the second of its kind to be held in the United States. The Administration should be commended for convening it; the Summit is timely, these countries are important, and U.S. economic and strategic interests in the region are extensive.
The Summit is timely because the Indo Pacific region, of which ASEAN is a central part, is moving forward without the U.S. – especially on trade. The Regional Comprehensive Economic Partnership (RCEP) involving ASEAN, Korea, Japan, China, Australia, and New Zealand is the most visible new regional trade pact, but it is complemented by dozens of bilateral and mini-lateral agreements involving ASEAN members and key partners. None of these include the United States.
The Biden Administration has also rejected calls to return to the Comprehensive and Progressive Agreement on the Trans-Pacific Partnership (CPTPP), from which President Trump withdrew the United States in 2017. The longer we sit on the sidelines, the further behind we will fall.
These are vitally important markets for American exporters. The ASEAN countries collectively purchased nearly $100 billion worth of U.S. goods last year and $35 billion in U.S. services exports. U.S. investment in the region surpasses that in China, Korea, and Japan combined.
The strategic dimension of the U.S.-ASEAN relationship is plain. As Senate Foreign Relations Committee Ranking Member James Risch recently said, “It is imperative we work with partners in Southeast Asia, particularly members of ASEAN, to uphold a free and open Indo-Pacific,” adding: “Critical to this U.S.-ASEAN engagement is pursuing a strong economic agenda. That needs to be a priority for the United States.”
Strengthening economic ties
That economic agenda is taking the form of the Administration’s proposed Indo Pacific Economic Framework (IPEF), which envisages a series of agreements on “fair and resilient” trade, supply chain resilience, infrastructure and decarbonization, and tax and anticorruption policies. The IPEF is an important and laudable effort, and to the extent that it strengthens trade rules, increases certainty and confidence, and facilitates investment, it is worth championing. The U.S. Chamber has made detailed recommendations on IPEF’s form and content.
However, as it stands, the incentives for some ASEAN countries to join are unclear and, in any event, it falls short of forward-leaning trade policies that have the force of domestic law. This Administration, or its successor, will have to confront that fact sooner or later.
ASEAN wants economic engagement with the United States and is looking for signals of commitment. The previous Administration’s abrupt withdrawal from the TPP left lingering mistrust in the region. To their credit, top Biden Administration officials, including Vice President Katherine Harris, Secretary of State Antony Blinken, Secretary of Commerce Gina Raimondo, Secretary of Defense Lloyd Austin, U.S. Trade Representative Katherine Tai, and others have made a flurry of visits to the region to rebuild that trust.
In introducing a resolution on the Summit last week, Senate Foreign Relations Committee Chairman Bob Menendez said, “…we commend the Biden administration in organizing the upcoming U.S.-ASEAN Special Summit, which demonstrates our strength as a reliable and active partner in South East Asia and our commitment to ASEAN centrality.” He is right to credit the administration for the initiative, even if more needs to be done truly demonstrate U.S. reliability as an economic partner to the region.
Harnessing the private sector
As we confront daunting global challenges, it is often the private sector that is innovating and driving solutions to address some of our toughest problems — like energy security, supply chain disruptions, and the digital transformation. During the Summit, the U.S. Chamber and ASEAN leaders will discuss the central role that businesses can play as we work to strengthen economic ties.
As the U.S. Chamber noted in a statement when the Summit was announced, “We particularly commend the Administration for holding this Summit even amid the ongoing conflict and crisis in the Ukraine; in fact, doing so at this time demonstrates the seriousness of the American commitment to Southeast Asia. Engaging these countries is critical to revitalizing and expanding ties across the Indo-Pacific region, which in turn is central to American economic and strategic interests.”
This week’s Summit is a rare opportunity to deepen our relationship, build greater confidence, and promote mutual prosperity with a vitally important part of the world. It’s an important first step, and we are glad to be part of it. But the more critical stage is what happens next.
Story By John Goyer, U.S. Chamber of Commerce
John Goyer is executive director of Southeast Asia at the U.S. Chamber of Commerce. Goyer focuses on issues of market access, investment barriers, regulatory and other issues that pose challenges for U.S. business in Southeast Asia.