American business enthusiasm in Southeast Asia is bent but far from broken even as the region grapples with a new trade framework and less US government involvement, according to a survey by the American Chamber of Commerce in Singapore.
Eighty percent of executives see their firms’ level of trade and investment in the Association of Southeast Asian Nations rising over the next five years, with just 3% seeing it decreasing. Respondents were most upbeat about Indonesia (92%) and Vietnam (86%). They’re optimistic about sales, too, with 56% expecting higher profits this year compared with 2016.
Even though the United States pulled out of the Trans-Pacific Partnership (TPP) -- a regional agreement that would have given Asian nations from Japan to Malaysia preferential access to the US -- the American business lobby group is encouraging the 11 remaining members to push ahead with the accord.
“Asean is still a very important place to us, an opportunistic market to invest" and will rise, Steve Okun, chair of the AmCham TPP Task Force, said in a phone interview. “It’s very important that we have a regional framework that gets to these 21st century business issues. It doesn’t matter in terms of setting up the framework if the US government is in or out.”
As TPP talks move forward without the US, Okun said trade agreements between a group of countries should be favored over the bilateral pacts that the Trump administration has promoted.
“You should have both bilaterals and multi-party, plurilateral agreement,” he said. The latter have greater impact than bilateral deals and “having this spaghetti ball of agreements that doesn’t come together,” he said.
While the Regional Comprehensive Economic Partnership -- a trade accord that includes Asean countries, China, India and others -- would be a step forward for US businesses, it pales in comparison to TPP as it doesn’t include standards for labour, environment, and competition with state-owned enterprises, Okun said.
“The best option is TPP, with or without the United States,” he said.