Vietnam and Philippines Closest of ASEAN Countries to Trade Deal With US, Trade Expert Says
Vietnam and the Philippines are the Southeast Asian countries closest to a trade deal with the U.S., said a former assistant U.S. trade representative on a webinar hosted by the Asia Program of the Carnegie Endowment for International Peace on June 17.
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Barbara Weisel, the U.S. chief negotiator for the Trans-Pacific Partnership and a non-resident scholar at the Carnegie Endowment, said that she expects Vietnam and the Philippines "to move the fastest" on a trade deal with the U.S. Indonesia, Malaysia and Cambodia are "in discussions," she said, but they have not been "face to face in the last couple of weeks," so they may be "behind" Vietnam and the Philippines.
Weisel anticipated that the eventual deals will look like the recent U.S.-U.K. deal, which she called a "framework agreement." She compared such a deal to announcing a "ceasefire" and said that the details will have to be negotiated later.
Southeast Asian countries "unilaterally disarmed" in the face of U.S. pressure because they don't have the economic leverage that China has, she said. They will accept much of what the U.S. has demanded, she said, including "tariff cuts, purchase agreements of various products, LNG, agricultural goods, planes, military equipment, other things," as well as the "elimination of non-tariff barriers, customs enforcement on transshipment from China," and then "economic security issues of investment screening and export controls."
"All of ASEAN have accepted that the U.S. is not going to completely eliminate the tariffs that it's imposed," she said. "The 10% global baseline is going to remain, and they don't expect the U.S. to be flexible on that." In return for capitulation on these issues, she said, they will attempt to negotiate the Section 232 tariffs that the U.S. has put in place "on steel and aluminum, on autos and auto parts, and then all the other investigations that are underway, many of which are on products that are important to ASEAN countries." These products, "minerals, pharmaceuticals, trucks, chips, ... are going to matter to ASEAN countries," and that is where she expects them to try to strike a deal.
Gita Wirjawan, the former minister of trade for Indonesia, said that ASEAN countries are prepared to weather the storm of the Trump administration because they see the tariff actions as "highly episodic." He said that ASEAN countries look to the U.S. "more for security purposes as opposed to economic purposes," whereas, they look at China "more for economic relations purposes." Wirjawan said that he thinks the region is "comfortable with that strategic direction, if there's ever a strategy for this."