00:00ASEAN has long championed a unified economic front.
00:04But when it comes to negotiating tariffs, especially with the US,
00:08critics argue that member states appear to act alone.
00:11With each ASEAN country subject to different tariff regimes,
00:15does it make more sense to negotiate bilaterally on their own
00:19or come together as a bloc with a collective leverage?
00:23Prof. Chandray Mugan Tangavellu,
00:25head of the Jeffrey Chia Institute on Southeast Asia, weighs in.
00:30So the US is not committing to a serious rule-based,
00:35market-based trading dimension itself.
00:37So where does this lead to ASEAN?
00:39ASEAN still needs a coalition.
00:41ASEAN still needs the biggest trading framework itself.
00:45So how much does the US trade to ASEAN actually account for?
00:48Maybe 20% of the total ASEAN trade with US.
00:55But there are 80% that is built on, 90% or 85% is built on this framework
01:02that is very important for us.
01:04So from a long, enduring, sustainable, and inclusive growth that we can create,
01:11it's the 85% that is based on a rule-based, market-based,
01:14and a coalition-based framework.
01:17So ASEAN follows this framework very carefully.
01:20That's the reason why, on April 10th, ASEAN, under Malaysian partnership,
01:26released the statement that fairly they believe that the negotiation from a coalition point
01:33of view, ASEAN point of view, is very important.
01:36And they emphasize the importance of WTO.
01:39They emphasize the importance of rule- and market-based trading area,
01:42which actually underpins how businesses need to do their work.
01:45Chandra added that while some ASEAN countries have been pursuing bilateral tariff deals
01:52with the US, most prefer collective negotiations through ASEAN for better leverage.
01:59So with the current framework, if bilateral FTAs and countries go on themselves
02:05and negotiate with that ASEAN, it doesn't actually help them.
02:10Because the whole framework of ASEAN, as I mentioned, is built on businesses
02:14participating in this framework, from either the flying geese in the 70s and 80s,
02:20currently the global value chain itself.
02:23So bilaterally, if countries negotiate, it is an important thing, I guess,
02:28because countries are trying to mitigate the short-run effect of the trade diversion
02:35that the US has put itself in terms of high tariff, that of 39% on Cambodia
02:44and then 38% on Vietnam and so on and so forth,
02:47on top of whatever the tariff line is.
02:50It's on top add-on component.
02:53So at that tariff rate, there's no trade at all.
02:55There's no margin for businesses to participate.
02:59So only three countries are bilaterally negotiating.
03:01And ASEAN really put up a statement that fairly there are many frameworks
03:05that can negotiate with the US and bring the US back into the negotiation table itself.
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