US businessmen grouped under the United States-ASEAN Business Council are seeking ways to access the Southeast Asian market, which has a population 620 million, through a Trans-Pacific Partnership (TPP).
Feeling a great need to capitalize on the regional market that has a gross domestic product totaling US$2.2 trillion, the council released a policy paper last Wednesday to provide a number of policy recommendations, including calls for the completion of TPP negotiations by late this year, and for US and ASEAN governments and business sectors to develop two-way trade and investment.
During their three-day visit to Jakarta, council members and executives met with President Susilo Bambang Yudhoyono in a likely attempt to lobby the Indonesian government to join the TPP.
The Indonesian government, which previously showed little interest in the US-led TPP, said in April that it would likely join TPP negotiations, if negotiations on the regional comprehensive economic partnership (RCEP) between ASEAN members and Australia, China, India, Japan, South Korea, New Zealand as well as Indonesia's talks on a comprehensive partnership agreement with South Korea went well.
'With the growing middle-class and a more robust public sector in ASEAN, the US needs to focus on actions that can tackle the challenges of market competition in ASEAN,' said council chairman Evan Greenberg at a press meeting in Jakarta on Monday.
'We also support the idea of a US-ASEAN free trade agreement. Although it will take time, we think that is an aspiration our government and other governments in ASEAN should work on.'
Yudhoyono said separately as quoted by Antara news agency that the council's visit was expected to help 'further strengthen and expand our cooperation and partnership'.
Greenberg was accompanied by senior advisor to the US-ASEAN Business Council Ambassador John Negroponte and US-ASEAN Business Council President Alexander C. Feldman. The council will complete its visit on Tuesday and depart for Kuala Lumpur, Malaysia.
According to Malaysia's International Trade and Industry Ministry's website, although Malaysia has free trade agreements (FTAs) with most TPP members, it is considered a positive step toward deeper integration within the Asia-Pacific region.
The TPP accounts for a third of Malaysia's global trade.
The paper states that completing TPP negotiations provides a strong basis for a subsequent US-ASEAN FTA, as it would pave the way for 'all ASEAN countries to join the TPP, an eventual APEC-wide free trade region, or alternatively, a US-ASEAN FTA'.
ASEAN members are the market for $75 billion and $25 billion in American goods and services exports, respectively, as well as nearly $170 billion in US foreign direct investment.
The paper, however, also highlighted challenges that could 'deter investment', like enforcement of localization of data, intellectual property and manufacturing.
Greenberg also said challenges related to investment in ASEAN varied from one country to another, with different cultural and historical backgrounds as well as economic development. 'Each country, depending on the economic sector, will either be more open or more closed to foreign investment and foreign business, and it really varies quite a bit. Ownership rules vary, local content rules vary and the legal environment varies,' Greenberg. (asw)