Today’s post takes a look at how ASEAN’s external trading partners fared after last week’s ASEAN Economic Ministers (AEM) meeting and subsequent ASEAN meeting with dialogue partners held in Manado, Indonesia. Several partners came in with proposals for expanded free trade agreements, while others proposed greater economic cooperation.
China had a pretty successful meeting, mainly due to the economic traumas experienced by the EU and US. By not facing roiling markets, China looked like a more stable economic partner by comparison, adding heft to its joint proposal with Japan for an East Asia FTA and East Asia Comprehensive Partnership. ASEAN members also agreed to study the increased use of the Chinese yuan in regional trade. Finally, any ASEAN meeting with China where the South China Sea/Spratly Island dispute did not take center stage will be considered a good meeting by Beijing.
Japan had a good meeting just by remaining relevant. Of course, in economic matters, Japan will always have a key role in ASEAN, because of the heavy Japanese industrial investment in the region. But at this meeting, staying relevant also required teaming up with China, something unthinkable years ago.
The US had an overall positive experience. The US sponsored the first official AEM-private sector meeting, with discussion of major policy objectives of trade facilitation, standards and conformance, and customs procedures. On the other hand, the joint China-Japan FTA proposal both puts pressure on the US to deliver on the Trans Pacific Partnership, which will be difficult given domestic US politics, even though the China-Japan proposal will take years to even get started.
India pushed for completion of its FTA agreements on investment and services, whose negotiations have been ongoing due to complexities in those sectors. If those FTA talks get resolved soon, then India will have had a good meeting. If not, then it will be more of the same.
Australia, New Zealand and Korea did not have much at stake, so not having as much to propose or announce did not affect them much at the AEM meeting.
The EU did not participate, as it is not an ASEAN dialogue partner, and so by that reason alone, could be said to have lost out on what happened in Manado. On the other hand, unlike the US, the EU is pursuing FTA talks with Malaysia and Indonesia, and will soon complete FTA talks with Singapore. After its detour in direct FTA talks with ASEAN as a group, perhaps the EU’s bilateral approach will pay off. Watch for the EU to announce FTA talks with the new Thai government soon.