BANGKOK: Southeast Asian leaders will dissect the impact of the US-China tariff war this weekend at a Bangkok summit, with Beijing determined to drive forward a trade pact sweeping in 40 percent of global commerce — but excluding America.
Disputes in the flashpoint South China Sea and Myanmar’s treatment of Rohingya Muslims are also likely to make the agenda at the two-day Association of Southeast Asian Nations (ASEAN) meeting starting Saturday in the Thai capital, reports AFP.But commerce will dominate, with the trade war between the world’s two biggest economies pushing some major manufacturers to flee China to Southeast Asia and casting doubts over the future of free trade.
US President Donald Trump has imposed tariffs on $200 billion of Chinese goods, from sneakers and socks to washing machines and furniture, prompting Beijing to hit back with levies on $60 billion of American imports.
“One of the biggest beneficiaries is ASEAN,” said Drew Thompson, a research fellow at the Lee Kuan Yew School of Public Policy in Singapore, in reference to the gains Asia’s low-cost manufacturing nations stand to make from trade tensions between China and the United States.
Firms including Brooks Running Company and washing machine maker Haier have already started migrating from China, seeking friendlier, lower-tariff markets in Vietnam, Thailand or Indonesia.
With the spat grinding on, Beijing is intensifying its drive to sign a massive trade pact that sweeps in Southeast Asia.
The Regional Comprehensive Economic Partnership (RCEP) includes all 10 ASEAN economies, plus India, Japan, South Korea, Australia and New Zealand.It links about half the world’s population and is seen as a way for China to draft the architecture of Asian-Pacific trade, following a US retreat from the region.
Shortly after his election, Trump pulled the US from the Trans Pacific Partnership (TPP) — which would have been the world’s largest trade deal —slamming it as an American “job killer”.
Backers hoped to sign the RCEP deal by the end of this year.
But negotiations have become sticky with Australia and New Zealand pushing for “high quality” environmental and labour protections.
India is also seeking guarantees the deal will not force its market open to duty-free goods from its main economic rival China through Southeast Asia.
In seeking to draw its own perimeters, New Delhi is the “glaring objector” to the free trade deal, Thompson added.
Expectations of concrete progress in Bangkok have dimmed — although RCEP negotiators are scheduled to meet on Saturday.
In the absence of a deal, observers worry the short-term gains for ASEAN from the US-China trade war may soon be consumed by falling global growth rates.
“If China and the US continue and the world economy suffers… then it’s just bad news for everybody,” Fred Burke, managing partner at law firm Baker McKenzie in Vietnam, which specialises in investment, told AFP.
As usual, bitter disputes over competing claims in the South China Sea are likely to surface in Bangkok after a collision between a Filipino and Chinese ship in the resource-rich waterway.