Free-flowing US-ASEAN trade to boost global economy – HSBC

A free-flowing trade between the US and the 10-member Association of Southeast Asian Nations (ASEAN) could offset global economic concerns, the Hongkong and Shanghai Banking Corp. Ltd. (HSBC) on Monday said.

“In this time of global economic doldrums, it makes sense to open markets and enable businesses to connect and to capitalize on new economic opportunities. The liberalizing of trade between these two economic powerhouses can go a long way to achieving that,” HSBC senior trade economist Doug Lippoldt said in an emailed statement.

The ASEAN leaders are gathering at Sunnylands, California on February 15 and 16 to meet with US political leaders and discuss cross-border security, defense, trade and broader economic cooperation. The meeting is being hosted by US President Barack Obama.

This follows the US-ASEAN strategic partnership which was strengthened by both parties in November.

ASEAN counts as members Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam.

Lippoldt noted the improved cooperation can generate “win/win outcomes” for both the US and the ASEAN.

“For the US, it means tapping into economies that are growing at two times the pace of the US economy. 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,” Lippoldt said.

The Trans-Pacific Partnership (TPP) trade agreement is now awaiting ratification by its members, including the US and four ASEAN countries – Brunei, Malaysia, Singapore, and Vietnam. The Philippines has signified interest to join the trade agreement.

“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 noted.

“I would hope that Summit discussions will affirm the positive role that TPP can play in expanding trade relations and encourage ratification of the pact by those countries that are members. Moreover, the summit discussions may provide an opportunity for ASEAN members not yet engaged in the TPP to explore the possibility of eventually joining in this high-standards trade agreement,” Lippoldt said.

This revived trade would be a driver to business growth, given conditions that have been broadly sluggish since the 2008-2009 global financial crisis, , HSBC said. – Jon Viktor Cabuenas/VS, GMA News