Diplomatic Pouch / February 19, 2016
By Larry Luxner
The markets might be obsessed right now with China’s economic slowdown, but the real story is Southeast Asia, which remains one of the world’s fastest-growing regions.
That’s according to Alexander Feldman, president and CEO of the Washington-based US-ASEAN Business Council Inc. (USABC), which advocates on behalf of trade and investment with the 10-member Association of Southeast Asian Nations (ASEAN).
On Wednesday, USABC hosted a full-day conference, “Asia’s Best Kept Secret: The ASEAN Economic Community,” in San Francisco. The event immediately followed President Obama’s Feb. 15-16 summit with all 10 ASEAN heads of state at the Sunnylands estate in Rancho Mirage, Calif.
Among the speakers at USABC’s event: Dino Djalal, Indonesia’s former ambassador to the United States; John Galligan, head of global government affairs at Microsoft Corp.; Atchaka Sibunruang, Thailand’s minister of industry; Leocadia I. Zak, director of the U.S. Trade and Development Agency; Tony Fernandes, founder and group CEO of AirAsia; and keynote speaker Le Luong Minh, ASEAN’s secretary-general.
“This conference is to elevate the economic relations between ASEAN and the U.S. in the aftermath of the president’s U.S. summit,” Feldman told the Diplomatic Pouch. “It’s to emphasize and underscore how important this relationship is today and in the future, with the ASEAN Economic Community coming into full force, and ASEAN continuing to grow as a region.”
Among other things, the USABC conference focused on raising awareness about ASEAN among U.S. opinion makers; offering ASEAN economic leaders a platform to promote their vision of the ASEAN Economic Community and the opportunities it will create; and giving top business executives a chance to engage government on their needs and ideas for the future of ASEAN.
Feldman is a leading expert on the business relationships between the United States and ASEAN, whose 10 members represent the nation’s fourth-largest export market — ranking only behind Canada, Mexico and China — with two-way trade in goods and services reaching $254 billion in 2015 and accounting for more than 370,000 U.S. jobs.
Feldman, a former assistant secretary at the State Department, has been with USABC since 2009, but has been involved in the ASEAN region for more than 25 years. USABC, founded in 1984, now has 152 member companies on its roster including Fortune 500 firms such as Coca-Cola, ExxonMobil, General Electric, Intel, UPS, FedEx and Google.
“China is an important market, but our concern is not about China, it’s about American leadership,” he said. “And if you look where American business puts its money down, $226 billion in cumulative investment is in ASEAN countries, which makes it the No. 1 destination of FDI in Asia, but bigger than U.S. FDI in China, India and Japan combined.”
Laos, which this year took over the rotating chair of ASEAN from Malaysia, is one of the bloc’s poorest countries. President Obama will make history in September when he becomes the first U.S. leader ever to visit the landlocked nation of six million.
At present, ASEAN nations are home to 630 million people with a combined GDP of $2.4 trillion. Indonesia alone, with 253 million inhabitants and an $870 billion economy, accounts for about 40 percent of the bloc’s total population and economic muscle.
Southeast Asia is currently enjoying a surge in prosperity, with ASEAN member states seeing an average 5.2 percent in annual GDP growth last year. Per-capita GDP has skyrocketed from $2,647 in 2008 to $4,130 in 2014 — with especially impressive gains for the club’s four newest members: Cambodia, Laos, Myanmar and Vietnam.
Feldman says the region stands to become even more prosperous once the Trans-Pacific Partnership (TPP) takes effect. In fact, one of USABC’s priorities this year is lobbying for passage of the highly controversial TPP, which links the economies of the United States and 11 other countries.
Four ASEAN members (Brunei, Malaysia, Singapore and Vietnam) have already signed onto the TPP — while another three (Indonesia, Philippines and Thailand) have indicated they’re interested in joining.
The Obama administration and many Republicans support TPP, but most Democrats oppose it. So do the top three presidential candidates: Donald Trump, Hillary Clinton and Bernie Sanders.
Feldman, dismissing that opposition as “election-year politics,” observed that “when Bill Clinton ran against George W. Bush in 1992, he was against NAFTA. Then when he became president, he passed it.”
Similarly, he said, Obama opposed free trade when he ran for president in 2008, but then when he got into the White House, his administration pushed through free-trade pacts with South Korea, Panama and Colombia.
“TPP has been a long-term negotiation, and I don’t think short-term passage or even non-passage will sink this agreement,” he told us. “Even if the United States doesn’t get around to passing it anytime soon, Japan and the others can move forward. It will be challenging for American leadership, but people who have looked at the history of U.S. trade agreements realize that one administration negotiates something, the other passes it.”