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Announcement on "Enterprise for ASEAN Initiative" Marks New Chapter in US-ASEAN Relations
President Bush's Announcement Hailed by Business as Bold Step Forward
(Washington, DC) The US-ASEAN Business Council today hailed President Bush's announcement of the Enterprise for ASEAN Initiative, a far-reaching pledge to enhance economic cooperation between the United States and ASEAN, as a crucial step forward in strengthening U.S. relations with Southeast Asia. Announced today at a meeting between President Bush and ASEAN heads of government in Los Cabos, Mexico, the EAI will set the stage for vastly expanded trade and investment between the United States and ASEAN (the Association of Southeast Asian Nations).
"This initiative demonstrates that the U.S. is committed to ASEAN, not just in the context of the War on Terrorism, but in expanding trade and investment relations and growing our economies." Said Ernest Z. Bower, President of the US-ASEAN Business Council. "It sets the vision for US-ASEAN relations in the 21st century, and is a big down payment on our future, both in terms of our safety and security as well as our economic well-being."
The Enterprise for ASEAN Initiative is a proposal by the Administration under which the U.S. Trade Representative (USTR) will open the door to the prospect of free trade agreements (FTAs) with all interested ASEAN countries. Talks leading toward such agreements would be conducted on a bilateral basis with those countries that are committed to market liberalization and market-oriented reform, and would be held at a pace acceptable to both parties.
Earlier this year, the US-ASEAN Business Council released a paper recommending that the Administration develop a roadmap to identify the steps needed to move toward a free trade agreement with ASEAN, pointing out that both sides would stand to gain a great deal in this effort. The ASEAN countries will benefit significantly from greater access to the U.S. market, as most countries in the region are highly trade-dependent, and ASEAN's total foreign trade exceeds its total GDP. About 20% of the region's exports each year are destined for the U.S., while 12-14% are bound for Japan, and the EU absorbs about 15-16%.
For its part, the U.S. will have the opportunity for greater access to a tremendously important market. In spite of the uneven recovery from the 1997-98 financial crisis, U.S. exports to ASEAN last year were $44 billion, more than double the value of U.S. exports to China. ASEAN hosts $53 billion in U.S. direct investment, five times as much as in China, and slightly more than U.S. investment in Mexico.
Under the Enterprise for ASEAN Initiative, any country interested in an FTA with the U.S. must be a member of the World Trade Organization. The United States would work with those countries that are not yet WTO members - Cambodia, Laos, and Vietnam - to help them meet the requirements for accession. Any potential FTA partner would also have to conclude a Trade and Investment Framework Agreement (TIFA) with the United States. The U.S. already has TIFAs with Indonesia and the Philippines, and signed one with Thailand on October 23, 2002. Preparatory work for a FTA with any ASEAN country would be undertaken through the TIFAs, under which senior trade officials from both sides would consult on a regular basis. Ultimately, any FTA would be modeled on the US-Singapore Free Trade Agreement, on which negotiations are expected to wrap up before the end of this year.
The EAI follows a complementary initiative announced recently by Secretary of State Colin Powell. The "ASEAN Cooperation Plan," announced by the Secretary at the ASEAN Post-Ministerial Conferences in Brunei this past August, will focus U.S. assistance and resources on supporting ASEAN's efforts to integrate its newer members into the grouping; on enhancing the capacity and resources of the ASEAN Secretariat; and on increasing cooperation in vital transnational issues, including HIV/AIDS, and trafficking in persons.
The ASEAN Cooperation Plan itself came on the heels of a US-ASEAN anti-terror declaration, also signed in Brunei in August. In addition, in Bangkok in April 2002, U.S. Trade Representative Robert Zoellick met with the ASEAN Economic Ministers (AEM), the first time in more than a decade that a USTR-AEM meeting had been held.
Mr. Bower noted that, "Even prior to September 11, the Bush Administration recognized the importance of ASEAN to U.S. interests, and had begun taking measures to fortify our relations with the region." He pointed out that an interagency dialogue on improving and developing relations with ASEAN actually began shortly after President Bush took office. "The Administration's focus on, and outreach to, the ASEAN region will pay long-term dividends."
The US-ASEAN Business Council is America's leading private business
organization dedicated to promoting increased trade and investment between
the United States and the member nations of ASEAN. The Council's
membership includes approximately 150 of the Fortune 1000 American
companies with trade and investment interests in the ASEAN region, and the
council's members are represented in diverse industries, including
aerospace, agribusiness, automobiles, computers and information
technology, consumer goods, energy exploration and development, express
delivery services, financial services, health care and pharmaceuticals,
software, and telecommunications. For information on the US-ASEAN Business
Council or general information on the ASEAN region, please contact John
Goyer at jgoyer@usasean.org or visit the Council's Web site at
www.us-asean.org.
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