|ASEAN Analytical Update | December 3, 2019
Authors: Riley Smith, Mario Masaya, Marcella Suwandhi, and Taylor Dumaine
|ASEAN ANALYTICAL UPDATE|
Outcomes of the 35th ASEAN Summit and Associated Meetings in Bangkok
The Chair of this year’s summit, Prime Minister Prayut Chan-o-cha of Thailand, also highlighted the ASEAN Outlook on the Indo-Pacific (AOIP), which was introduced initially at the 34th ASEAN Summit in June 2019. This strategy framework is meant to compliment other frameworks proposed by the United States, India, Japan, and Australia. Multiple summits were held on the sidelines of the ASEAN Summit, including talks on the Regional Comprehensive Economic Partnership, the East Asia Summit, individual ASEAN+1 summits, and the Indo-Pacific Business Forum (please see additional details below).
7th ASEAN-U.S. Summit
On November 4, the 7th annual ASEAN-U.S. Summit was held. The head of the U.S. delegation, White House National Security Adviser Robert O’Brien, and the representatives of the ASEAN Member States reaffirmed their commitment to promoting peace and stability in the region as well a collaboration in cybersecurity and energy. The Chairman’s Statement highlights the importance of cooperation between the United States and ASEAN on infrastructure projects throughout the region, such as the proposed Blue Dot Network, which aims to promote high-quality standards for infrastructure development.
The Chairman’s Statement also mentions the US-ASEAN Business Council, highlighting the Council’s work in spearheading the ASEAN SME Academy to develop Micro, Small and Medium-sized Enterprises (MSMEs) and the US-ASEAN Internship Program. During the summit, O’Brien relayed an invitation from U.S. President Donald Trump for ASEAN Member State leaders to attend a U.S.-ASEAN “special summit” in the United States early next year. No other details on this summit have been released yet, and there has been no official response on summit attendance from ASEAN leaders.
This year’s ASEAN-U.S. Summit saw the lowest level representation from the U.S since the summit began seven years ago. It was also the lowest level representation of any country attending the East Asia Summit. In accordance to diplomatic protocol, seven of the 10 ASEAN Member States sent their foreign ministers to the meeting instead. Only the Prime Ministers of Thailand (the current Chair of ASEAN), Vietnam (the next Chair of ASEAN), and Laos (which currently oversees ASEAN-U.S. relations) attended the meeting. In response to the United States’ downgraded representation at the summit, some commentators and analysts speculated as to the seriousness and reliability of the United States’ commitment to the Indo-Pacific. However, U.S. Commerce Secretary Wilbur Ross, who was in Bangkok heading a business development mission, defended the United States’ position, saying that U.S. President Trump was “fully committed” to the Indo-Pacific, citing the attendance of 24 senior U.S. officials and eight U.S. government agencies at the Indo-Pacific Business Forum.
14th East Asia Summit
The 14th East Asia Summit took place in Bangkok on November 4 between the 10 ASEAN Member States, Australia, China, India, Japan, New Zealand, Russia, South Korea, and the United States. The summit serves as an opportunity for the 18 nations to discuss political, security, and economic issues.
The leaders in attendance expressed their continued commitment to the East Asia Summit, noting that this year was the 15th year of the gathering. Areas of cooperation that were discussed included energy, sustainability, connectivity, trade, and infrastructure. The Chairman’s Statement noted the multiple meetings surrounding energy cooperation and sustainability initiatives throughout the year, and the implementation of regional initiatives to tackle environmental concerns, specifically the adoption of the Bangkok Declaration on Combating Marine Debris in ASEAN Region and the ASEAN Framework of Action on Marine Debris. Prime Minister Lee Hsien Loong of Singapore called for updating trade rules and practices to better align with the demands associated with the growing digital economy.
A majority of the summit focused on defense and security issues. Issues surrounding the Korean Peninsula, Rohingya Crisis, and the South China Sea were all discussed, although language was for the most part vague as to not provoke members in attendance. The Chairman’s statement affirmed support for already established international laws and conventions such as the 1982 United Nations Convention on the Law of the Sea (UNCLOS), but did not make any accusations regarding these polarizing international issues. Representatives vowed to scale up anti-terror efforts to address terrorism, radicalization, and transnational crime through increased cooperation.
On November 4, all 10 Heads of State/Government for ASEAN Member States and Australia, China, India, Japan, South Korea, and New Zealand met for the 3rd RCEP Summit in Bangkok. The Regional Comprehensive Economic Partnership (RCEP) is a free trade agreement between sixteen Asian nations that brings the existing five ASEAN+6 Free Trade Agreements into a single framework. By decreasing tariff rates, increasing investment protections and introducing new regional trade modernizing commitments in services and e-commerce, RCEP is expected to deepen intra-regional trade and help incentivize the expansion of global supply chains to and within Asia. If signed, RCEP would be the world’s largest free trade deal, as its members account for nearly a third of global domestic product and almost half of the world’s population.
While most of the countries negotiating RCEP reportedly hoped that an agreement would be finalized during the 35th ASEAN Summit, India ultimately pulled out of the agreement over domestic economic concerns. Specifically, India expressed concerns over the potential influx of lower-cost Chinese goods into the Indian market. India currently runs a large trade deficit with China and wanted concessions from Beijing to prevent such a scenario from happening in return for signing the agreement. Such a protectionist stance is not uncommon for India. India and the other 15 members of RCEP have noted that there is still room to work together to include India in the agreement.
With India’s withdrawal, all 16 members of RCEP adopted the “ASEAN-X” principle and agreed to move forward, releasing a joint statement saying that the remaining 15 members have concluded “text based” negotiations on twenty chapters of the agreement and are planning to sign the deal in 2020 in Vietnam. Several leaders, including Prime Minister Prayut Chan-o-cha and Prime Minister Mahathir Mohamad of Malaysia, have expressed their firm belief that the final agreement will be completed before the end of 2019 and signed early next year. India could choose to join the trade deal later, and the joint statement added that “all RCEP participating countries will work together to resolve these outstanding issues in a mutually satisfactory way.” Exact details of RCEP, such as tariff rates and provisions on intellectual property and trade of services, have not been announced yet.
RCEP initially was proposed in 2012 and was based on a framework developed by the 10 ASEAN Economic Ministers. Negotiations formally started in 2013. While RCEP has often been framed as a “China-led” initiative, this has primarily been in comparison to the TPP/CPTPP, which included the United States up until January 2017. In fact, seven Asian nations are members of both agreements, and ASEAN, Japan, and Australia provided much of the leadership in shaping RCEP. Some have seen the progress made on concluding RCEP as a victory for multilateral trade deals at a time of rising trade tensions and an increasing focus on bilateral deals, especially by the United States.
Indo-Pacific Business Forum
Over 1,000 business and government officials attended the Indo-Pacific Business Forum (IPBF), which took place alongside the East Asia Summit and the ASEAN-U.S. Summit in Bangkok on November 4. The U.S. Chamber of Commerce and the Thai Chamber of Commerce co-organized the event, in collaboration with the American Chamber of Commerce (AmCham) in Thailand, the U.S. ASEAN Business Council, and the U.S. and Royal Thai governments. The U.S. Trade and Development Agency (USTDA) sponsored the forum. U.S. Commerce Secretary Wilbur Ross led a delegation of 40 U.S. businesses and high-level government officials to the forum, aiming to highlight the commitment of the United States to the Indo-Pacific. This commitment was echoed by the nearly 200 U.S. business executives that also attended the forum. In addition to Secretary Ross, representatives from the State Department, Export Import Bank (EXIM), USTDA, Overseas Private Investment Corporation (OPIC), and the U.S. Agency for International Development (USAID) attended the event. For information on the role that the Council played in supporting the IPBF, please see the Advocacy section below.
The theme of the event centered on the three pillars of the Free and Open Indo-Pacific (FOIP) strategy: energy, infrastructure and the digital economy. The United States has announced a several key initiatives to support these economic pillars in the region. Asia Enhancing Development and Growth through Energy (Asia EDGE) is a government wide effort to grow sustainable and secure energy markets in the region through developing partnerships, supporting innovation and investment enabling policy and regulatory frameworks, improving energy trading relationships, an expanding access to affordable and reliable energy. In terms of infrastructure, the United States has invested US$47.9 million in the Infrastructure Transaction and Assistance Network (ITAN) to bolster private sector investment in high quality infrastructure development and improve partner countries’ project planning and management capacity. Lastly, the Digital Connectivity and Cybersecurity Partnership (DCCP) provides technical assistance and capacity building support to strengthen the digital economy in the Indo-Pacific. The DCCP focuses on strengthening connectivity, cybersecurity, and smart cities by supporting investment in digital infrastructure, technology innovation, and public private partnerships. The DCCP also works to improve regulatory frameworks regarding information and communications technology initiatives.
In his keynote address to the forum, Secretary Ross outlined key figures on trade and investment between the United States and Southeast Asia. Multiple partnerships and business initiatives were announced during the forum to enhance regional cooperation. These included:
Secretary Ross also highlighted the FOIP’s economic pillars during the U.S. business development mission, which took place alongside the IPBF, that he led to Thailand, Indonesia, and Vietnam. The United States is actively engaging in areas of digital connectivity, cybersecurity, infrastructure, and energy. The U.S. Government is looking for ways to support increased U.S. public and private sector investment to and from the region to not only take advantage of the growing market in Southeast Asia, but also to provide an alternative to China’s growing influence.