Photo credit: ASEAN - Photo: 2018

ASEAN Refrains from Taking Sides as Trade Dominates Summit

By Kalinga Seneviratne

SINGAPORE (IDN) – Addressing a media conference at the close of the three-day 33rd ASEAN (Association of South East Asian Nations) Summit on November 15, Singapore’s Prime Minister Lee Hsien Loong expressed fears that “circumstances may come” where the regional organization would have to “choose one over the other”.

Though not naming them, he was referring to China and the United States (U.S.) two major trading partners of ASEAN that are currently having a fierce trade war that is impacting on the region.

“It’s easiest not to take sides when everybody else is on the same side,” Lee noted. “But if you are friends with two countries which are on different sides, then sometimes it is possible to get along with both, sometimes it’s more awkward (when) you try to get along with both.”

He added: “if you’re talking about economic co‐operation, theoretically that’s a win‐win. But if the global economy pulls apart into different blocs, and then there are hindrances not just to trade but also to investments.”

ASEAN includes 10 member states encompassing the Southeast Asian region with a diversity of development needs. Cross-border trade and investments have been gathering steam in the past two decades as the regional grouping liberalized laws for such flows.

While the U.S., Europe and Japan were the major trading and investment partners in the past, with China’s economic upsurge there has been a dramatic rise in Chinese influence in the region and for most of the countries, China has become its major investment and trading partner, as well as the source of tourists. Because of its size and proximity, most ASEAN countries are weary of Chinese military and economic might, but they also see China’s rise as a positive factor in the economic sphere.

Philippines President Rodrigo Duterte, who has shifted his country’s alliance away from the U.S. towards China since coming to power two years ago, told reporters here on the sidelines of the ASEAN summit that U.S. military drills in the South China Sea (SCS) is derailing efforts to settle sovereignty and economic development issues in the disputed area.

“China is already in possession (of SCS). It’s now in their hands. So why do you have to create frictions … that would prompt a response from China?” he asked, adding, “America and others should realize that they are there”. He argued that the conflicts between China and its neighbours on SCS could be settled through negotiations between ASEAN and China, without the US or its allies turning up the heat through displays of force as “freedom of navigation exercises”.

Philippines, Vietnam, Malaysia, Brunei and Taiwan have conflicting claims on parts of SCS with China, and in 2016 Philippines won a World Court decision on their claim, which China rejected. However, Duterte has set aside that verdict and have started negotiations with China to jointly develop that region, especially to exploit the oil and gas resources believed to be on the seabed.

In addressing the ASEAN-China summit here this week, China’s Prime Minister Li Keqiang said that he hopes to have an accord sewn up between China and ASEAN on a code of conduct (COC) in SCS within 3 years, which will set out norms of behavior in the seas for all parties. The premier has indicated the first draft of it would be available for presentation to the 2019 ASEAN summit in Thailand.

“There will be complex and challenging negotiations,” predicted Lee speaking to the media after the meeting. “In the meantime, all parties should maintain restraint, keep a conducive and stable environment for COC negotiations to proceed smoothly”, he added.

In August, Philippines’ Foreign Secretary Alan Cayetano said that Duterte has approved a proposal to form a group to study plans for the two countries to conduct a joint exploration in the disputed SCS. He said: “Our job is to provide a framework that is acceptable both to the Philippines and China”. This plan is expected to be adopted when President Xi Jingping visits Manila Inn 2019.

Duterte has often said that such joint development of seabed resources could be a model for regional collaboration to settle disputes in the region, such as the SCS sovereignty issue.

The Chairman’s statement at the end of the ASEAN Summit, “warmly welcomed the continued improving cooperation between ASEAN and China”. Noting the COC moves, it said that ASEAN “welcomed practical measures that could reduce tensions, and the risk of accidents, misunderstandings and miscalculation” in the region.

As ASEAN’s old trading partners in the West seem to retreat into protectionism and trade wars, the group’s leaders showed a determination to complete the Regional Comprehensive Economic Partnership (RCEP). It includes all ASEAN members and its major trading partners in the region such as China, South Korea, Japan, India and Australia, but excludes the U.S. The progress of the ASEAN-led pact has been in the limelight since the Trump administration scuttled the Trans Pacific Partnership (TPP) agreement.

Indonesian President Joko Widodo warned member states that they have to show flexibility if they are to wrap up the agreement (that has many areas of disagreements) and recalibrate ambitions towards achieving a common interest. This needs to be done in an environment of concrete cooperation and a constructive attitude, he argues.

ASEAN’s elder statesman, Malaysia’s 93 year-old Prime Minister Dr Mahathir Mohamad addressing an ASEAN business and investment forum said that the adoption of RCEP would validate the regional organisation’s centrality in the economic integration of the region, but noted that some member states would require assistance in meeting market aspirations of developed economies.

“What we require is fair and mutually beneficial trade and investment cooperation,” he argued, “rather than dominance by anyone”. He also added that the region will miss out from benefitting from the fourth industrial revolution, if the member nations do not develop advanced manufacturing capabilities through investment in high‐tech infrastructure and quality education.

“ASEAN nations should develop capabilities to produce their own goods and services for individual benefit and then export them to other member countries,” he emphasized, pointing out that this new revolution transforms how products are designed, fabricated, used and operated as well as how they are maintained and serviced.

“It will transform the operations, supply chain management and energy footprint, among others, of factories in the region” he noted. “It is imperative that ASEAN is not left behind in this Industry 4.0 wave and must strive to move along and keep pace with these latest developments.” [IDN-InDepthNews – 16 November 2018]

Photo credit: ASEAN

IDN is flagship agency of the International Press Syndicate. –

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