ASEAN Monitor - June 2017

Beacon of Free Trade in an Era of Protectionism

The emerging anti-trade and anti-globalization sentiments around the world has not registered well with ASEAN. After all, the Southeast Asian bloc has increasingly been pushing for enhanced regional economic integration as well as free trade. ASEAN initiated the Regional Comprehensive Economic Partnership (RCEP) in 2012 – a proposed trade pact currently being negotiated by ASEAN +6 (Australia, China, India, Japan, New Zealand and South Korea). The ASEAN Economic Community (AEC) was established in December 2015 in order to lower tariffs and ease cross-border flows of capital and labor. Some ASEAN countries are also part of the Trans-Pacific Partnership (TPP). However, with the United States officially out of the Trans-Pacific Partnership, the remaining participants are scrambling to pick up what has been dropped and shattered. Currently, ASEAN and the wider region’s hopes are pinned on RCEP, which accounts for a population of around 3.5 billion people and a GDP (PPP) of around $50 trillion. Beyond the RCEP, ASEAN is also seeking other free trade agreements with partners such as the EU. In a recent event on the “Future of Asia” in Tokyo, ASEAN Secretary-General Le Luong Minh stressed that ASEAN will “continue to embrace globalization, free trade and open regionalism.” With protectionism and anti-globalization mood prevalent across the world, it is apt for ASEAN to stress its commitment to continued economic integration and open trade – after all, for a region deeply embedded in global supply and value chains, a threat to globalization and free trade cannot be taken lightly.