South East Asian leaders suggest the USA is 'ceding leadership' on trade and investment

The USA is "ceding too much leadership" on trade and investment "to China, Japan, Korea, and India" several South East Asian leaders commented to a delegation of commissioners advising the Washington DC-based Center for Strategic and International Studies on relations with ASEAN who visited the region in July.

According to Murray Hiebert, Deputy Director and Senior Fellow of the Southeast Asia Programme at the Center, "the ASEAN leaders said the United States needs to step up its commercial engagement with the region to prevent ‘a line down the middle of the Pacific’ that could undercut a narrative of vigorous US engagement and hobble the long-term economic role of US corporations."

Mr Hiebert writes that it is therefore "critical for Congress" to pass the three free trade agreements - with South Korea, Columbia and Panama - in September "to signal that the United States intends to remain fully engaged globally on trade and investment ahead of four critical summits in which the president will participate in November. Without those FTA deals in hand, the US commitment to trade will be severely questioned when Obama attends the G-20 summit in Cannes, hosts Asia Pacific Economic Cooperation (APEC) leaders in Hawaii, and participates in his first EAS and third ASEAN leaders’ summit in Bali."

A continued congressional stalemate over the trade agreements will also hamper serious progress on the "cutting-edge Trans-Pacific Partnership (TPP) agreement on trade liberalization, which includes four ASEAN countries (Brunei, Malaysia, Singapore, Vietnam), the United States, and four other partners and will allow other Asian countries to join over time.

"Officials of the countries involved in the agreement say the lack of progress on the existing agreements in Washington undercuts the market-opening offers US negotiators bring to the table out of concern that these could alienate a constituency in Congress needed to ensure support of three FTAs under consideration."

In 2010, ASEAN ranked as the USA’s fifth-largest trading partner with two-way trade reaching $178 billion, up 132% over the previous decade. With less than half of China’s population, ASEAN managed to attract almost the same volume of US exports and US foreign direct investment stock in ASEAN reached $153.3 billion in 2008 - $74.1 billion more than to Japan and $107.6 billion more than to China.

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