Southeast Asia finds itself stuck again between the world’s trade heavyweights – the United States and China. The region’s countries cannot economically afford to side with one over the other even as tariffs, sanctions and the spectre of conflict begin to affect their economies.
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Enter Europe, which has not been especially active in improving trading relations with the region. Reversing years of stalled efforts at Europe-Southeast Asia economic partnerships is among the shrinking number of options available to buffer both regional economies from the effects of a spreading trade war.
A more economically integrated European Union and Southeast Asia could eventually rival trade levels seen on either side of the Pacific. However, that is only if officials can overcome the entrenched regional interests that currently thwart international cooperation.
At the recent Shangri-La Dialogue, French President Emmanuel Macron called for Europe and Asia to not only strengthen security ties, but also to work on de-risking supply chains and negotiating more free trade agreements. But the road from rhetoric to practical application is fraught with obstacles.
So far there has been little to show for region-to-region efforts. Talks between the EU and Association of Southeast Asian Nations (Asean) for a trade and investment agreement were put on hold in 2009. Bilateral deals followed, with negotiations concluded between the EU and Singapore in 2014 and with Vietnam in 2015.
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The timing for renewing efforts could not be better. The Trump administration is dismantling the rules-based international trading system. Even if US federal court rulings put up roadblocks, US President Donald Trump’s push for tariffs is likely to persist. There are other legal means to keep up the pressure, with more trade impediments likely later this year.