Diplomatic Pouch / June 3, 2010
By Larry Luxner
Asia’s fastest-growing trade bloc is pursuing an aggressive U.S. promotional strategy — one that earlier last month targeted two jurisdictions: Washington state and Washington, D.C.
The Association of Southeast Asian Nations (ASEAN) is comprised of Brunei, Burma (Myanmar), Cambodia, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand and Vietnam. These 10 countries enjoy some of the world’s healthiest economies and boast a combined gross domestic product of $1.5 trillion.
On May 5, ASEAN’s flourishing ties with the United States were celebrated at a dinner organized by the US-ASEAN Business Council and underwritten by corporate heavyweights Oracle, Philip Morris International, Microsoft, Chevron, Oracle, Coca-Cola, Caterpillar and Freeport-McMoRan.
The event at Washington’s Four Seasons Hotel attracted 220 diplomats, business executives and other dignitaries, including trade ministers from the 10 ASEAN member countries.
“ASEAN stands between China and India at the center of global trade routes, but in the minds of the public, it often stands a distant third,” said Alexander Feldman, president of the US-ASEAN Business Council. “As we first proposed this road show to the trade ministers in Bangkok last August, we had one goal: to show why Southeast Asia cannot be overlooked, and to place it firmly on the map in the minds of U.S. policymakers and business leaders as well as the general public,” he added.
“ASEAN represents nearly 600 million people across 10 diverse, vibrant developing nations. Those 600 million people are building, purchasing, innovating and creating — and driving the growth of one of the world’s most important economic regions. In 2015, the Southeast Asian Economic Community will draw those 600 million people even closer, into a single economy that straddles the crossroads of global trade, and will provide untold opportunity for American business.”
According to Feldman, the average ASEAN citizen consumes twice the value of U.S. products annually as the average Chinese, and nine times as much as the average Indian.
Feldman also noted that the Southeast region is the largest destination in Asia for U.S. foreign direct investment, drawing three times as much FDI from the United States as China, and nearly 10 times as much as India.
“As ASEAN continues to develop, it will face challenges. Its infrastructure needs to grow. Those 600 million people will need better health care. Food security will lead to hard decisions on biotechnology and genetic engineering. Energy production will need to be greatly increased to meet the needs of a growing middle class and further commercial development. And the need to connect the people and countries of Southeast Asia will lead to the development of new and better roads, ports and bridges, both physically and increasingly virtually — through high-speed broadband connections,” Feldman explained.
“All these infrastructure projects will need to be financed as there are more important needs than can be financed by Southeast Asian government budgets alone,” added Feldman. “These are all areas U.S. companies have experience working in. As ASEAN completes its regional integration, we will need to move from a country-by-country strategy to finding solutions that address the region’s unique challenges as a whole.”
The visiting nine-member ASEAN delegation included Indonesian Trade Minister Mari Pangestu; Pehin Dato Seri Setia Lim Jock Seng, second minister of foreign affairs and trade of Brunei; Pan Sorasak, secretary of state of Cambodia’s Ministry of Commerce; Nam Viyaketh, minister of industry and commerce of Laos; Dato Sri Mustapa Mohamed, Malaysia’s minister of trade and industry; Thomas G. Aquino, senior undersecretary of the department of trade and industry of the Philippines; Nguyen Cam Tu, Vietnam’s vice minister of trade and industry; and Surin Pitsuwan, secretary-general of ASEAN.
The star of the evening was Indonesia’s Pangestu, who spoke following short introductions by Joseph Alhadeff, Oracle’s vice president of global public policy, and Deputy U.S. Trade Representative Demetrios Marantis.
In her impeccable English — perfected during her years as a student at the University of California-Davis — Pangestu laid out the case for paying attention to Southeast Asia, which saw $180 billion in two-way trade with the United States in 2008.
In fact, Southeast Asia’s total trade has skyrocketed from around $400 billion in 1993 to over $1.7 trillion in 2008 — and U.S. foreign direct investment in Southeast Asia reached $150 billion in 2008, making it the largest destination for American FDI in Asia.
“The reason for our road show is to remind all of you in the United States that there is a region called Southeast Asia,” she said. “People know Indonesia, Malaysia, Thailand and Vietnam, but they don’t make the connection that we are one region that has gone through a process of economic integration.”
What Pangestu says carries great weight, given that Indonesia alone has a population of 227 million — nearly 38 percent of ASEAN’s total. It’s also where President Obama lived much of his childhood, and where he’s likely to spend three days during a long-delayed Southeast Asian trip next month.
“Starting our road show in the state of Washington was a correct decision,” she said. “Seattle is home to a lot of familiar companies — Boeing, Microsoft and Starbucks among them — and it’s the place where the first APEC [Asia-Pacific Economic Cooperation] leaders summit was held. It’s also a gateway to the Pacific.”
Pangestu added that “we were able to meet the governor, local officials and congressmen who were very engaged with us. Sen. Jim McDermott, who we’d have difficulty seeing here in D.C., gave us an hour of his time, discussing trade policy.” But Indonesia’s trade minister also emphasized that this engagement needs to go beyond government-to-government relationships.
“It must also involve stakeholders. We face this on a daily basis,” Pangestu said. “It’s important to have these kinds of people-to-people links, because it makes it less likely to have miscommunication.”
She added that “trade policy does tend to run into domestic political issues, so bringing in the constituency we believe was a very good recommendation,” said Pangestu, whose delegation also met with three other Democratic lawmakers in the nation’s capital: Sen. Max Baucus of Montana, Rep. Sandy Levin of Michigan, and Rep. John Tanner of Tennessee.
“We need to do it again and again and again. I think our experience with the state of Washington also emphasized the need to go outside Washington, D.C. In our next road shows, we have a lot of other states to cover. We must strategically address the issues and see every action plan as a way forward, which promises to bring us to a higher level of U.S.-ASEAN engagement.”