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MANILA, Philippines – Trade talks during the US-ASEAN Summit in California this week could boost businesses amid a lethargic global economy, according to the Hongkong and Shanghai Banking Corporation (HSBC).
"Improved cooperation between US and ASEAN can generate win-win outcomes. For the US, it means tapping into economies that are growing at two times the pace of the US economy," said HSBC senior trade economist Doug Lippoldt in a statement.
"For ASEAN countries, it means reaching a large consumer base in the US that continues to increase spending as well as accessing a market that is an important source of inputs that can help ASEAN countries increase their manufacturing competitiveness."
HSBC's statement was released on the eve of the US-ASEAN Summit, set to be held in Southern California on February 15 and 16. It will be the first time that the summit will be held on American soil.
US President Barack Obama and 10 ASEAN leaders, including Philippine President Benigno Aquino III, seek to build on last November's elevation of US-ASEAN ties to a strategic partnership.
The ASEAN as a whole represents a powerful economic bloc and could expect to improve its two-way trade with the US if leaders are able to translate the strategic partnership into concrete action in favor of trade liberalization, Lippoldt said.
The US currently ranks 4th as an export destination and import source for the ASEAN as a bloc, while it ranks as the Philippines' third largest partner, accounting for 13% of total trade based on data from the Philippine Statistics Authority (PSA).
Pushing TPP
Looming over the discussions will be the recently signed Trans-Pacific Partnership (TPP) led by the US and featuring 11 other nations, which account for almost 40% of global output and 25% of global exports of goods and services.
At present, 4 ASEAN countries are included in the deal: Brunei, Malaysia, Singapore, and Vietnam.
"US-ASEAN trade ties are in line to be buoyed by the Trans-Pacific Partnership. We think that the TPP can affect trade by removing not only at-the-border barriers to trade, but also behind-the-border barriers such as misaligned regulations that can impede trade in services or discourage investment and technology transfer," Lippoldt said.
He added that the summit discussions may provide an opportunity for other ASEAN members to explore the possibility of eventually joining the TPP.
The Philippines previously expressed a desire to join the trade deal, with Aquino raising the matter in a bilateral meeting with Obama on the sidelines of the APEC Economic Leaders' Meeting last year.
Experts have pointed out, however, that the Philippines would need to modify its constitution, specifically provisions restricting foreign ownership, in order to be granted entry.
Beyond economic matters, geopolitical issues such as tensions with China over the South China Sea (West Philippine Sea) are expected to be discussed at the summit. – Rappler.com
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