The Latest on Southeast Asia: August 3, 2023

With its growing population and booming economies, Southeast Asia is emerging as a crucial hub for trade and commerce and presents great promise for economic partnerships. The Biden administration’s Indo-Pacific Economic Framework demonstrates a reinvigorated interest in the region after a short lull in U.S.-ASEAN relations. Domestic and international trade experts, however, criticize the IPEF for not going far enough, arguing that lack of market access and concrete deliverables will yield few tangible benefits and disincentivize buy-in from partner nations.

The United States, despite its avoidance of traditional trade mechanisms, demonstrates its resolve to deepen its relationships through sustained overtures to regional partners. Rather than broader free trade agreements with negotiated market access, the United States manages economic ties with ASEAN partners on a sectoral, case-by-case basis. Vietnam represents a pertinent example of growing U.S. economic engagement in the region. On July 20, U.S. treasury secretary Janet Yellen visited Hanoi to meet with top officials, where she highlighted the record-high two-way trade between the two countries and reiterated the United States’ intention to deepen its economic and security ties with Vietnam. She also expressed the U.S. commitment to supporting Vietnam’s renewable energy initiatives as part of the Just Energy Transition Partnership (JETP).

Secretary Yellen’s trip comes on the heels of U.S. secretary of state Antony Blinken’s visit to Vietnam in April, where he and Vietnamese prime minister Pham Minh Chinh discussed the possibility of deepening U.S.-Vietnam ties. With the upcoming G20 conference in New Delhi scheduled in September, President Biden revealed that PM Pham wanted to meet with him on the sidelines of the conference. President Biden and PM Pham may discuss opportunities to upgrade the U.S.-Vietnam partnership from a comprehensive partnership to a strategic partnership.

While the United States under the Biden administration has avoided traditional free trade agreements, European partners are actively pursuing them. European Commission President Ursula von der Leyen visited Manila from July 31-August 3, the first visit by a sitting president in the span of the nearly 60-year-old EU-Philippines diplomatic relationship. Trade and economic policy were at the forefront of her visit; notably, she announced that she would restart free trade agreement negotiations with the Marcos administration after talks lapsed under the Duterte administration. This announcement follows the resumption of the EU-Thailand free trade agreement negotiation process announced in March 2023. The European Union is not alone in its pursuit of expanded trade relations in the region; the United Kingdom recently signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in July 2023. While European partners expand their relationships with ASEAN nations through more traditional engagement on free trade, the United States diverges from the beaten path by offering a flexible, though piecemeal, approach to enhanced partnerships.

Japhet Quitzon is a research associate with the Southeast Asia Program at the Center for Strategic and International Studies (CSIS) in Washington, D.C. 

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