- 8 months ago
Can ASEAN thrive by trading more with itself? Thailand’s Trade Representative Umesh Pandey shares his insights on regional supply chains, digital trade, and how Southeast Asia can strengthen its economic bloc from within.
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00:00Hello and welcome to the special show of ASEAN in conjunction with ASEAN Summit, 46th ASEAN Summit in Kuala Lumpur Convention Center and with me right now I'm on it with Umesh Pandey, Thailand Trade Representative. Umesh, welcome to Kuala Lumpur.
00:25My second round in as many months, I think. Oh, second round, okay. Alright, so first of all, um, how does Thailand envision, especially its leadership in strengthening intra-ASEAN trade?
00:42Yeah. Intra-ASEAN trade is something that I have said many times over the past few months, actually. It's been six months since I took up this position.
00:53Intra-ASEAN trade accounts for about just above 21% at the moment, which in any given circumstance is considered very low.
01:02Even your Prime Minister, actually, at the plenary session said that the 21.5% is disappointing. It's exact words. I am 100% with him.
01:12In any given trade between region, that should be at least twice as much. At least 50% higher, twice as much.
01:22You cannot have a 21.5% intra-ASEAN trade and hope to take the world on your stride.
01:29Today, our population is equal to that of the EU, entire EU. Our purchasing power is rising by the day, by the hour, forget about by the day.
01:41We have a situation where our population is increasing.
01:47You know, economy, in terms of economic growth, according to ASEAN's projection as well, this year is 4.7%.
01:55The last year is 4.8%. The entire ASEAN region. There are some stronger, there are some weaker, and it depends on each country.
02:04Maybe because of tariffs, in lateral tariffs, it may come down slightly, maybe just about 4%.
02:11But still, relatively very good numbers, if you come to think about it.
02:15So those are things where intra-ASEAN trade would be able to push that number higher, or at least help sustain that number, not bring it below that 4% growth.
02:28I hope the entire ASEAN region's growth this year is not below 4%. That's my hope, okay?
02:35Thankfully, because, obviously, the unilateral trade tariffs have already been pushed until at least June, end June.
02:44So we'll have six months to work things out.
02:48So, yeah, hopefully, intra-ASEAN trade is necessary to push it forward.
02:55Yeah.
02:55Umish, we know that ASEAN, we have, like, multi-culture, and our economies are so different, you know?
03:07I mean, differ to each other.
03:08For example, like Singapore, we have a high income, as a high income, and also we have middle to low, we have, like, Cambodia, like, Laos.
03:19But basically, how we want to make sure that a trade between intra-ASEAN can move forward and look for strategic collaboration or sectors or even industries that can give benefit to the whole
03:37ASEAN as a region.
03:41Good point.
03:42It's a collaborative.
03:44We have to have a collaborative effort.
03:46We cannot be in, we cannot be competition.
03:50We can, okay, I always say this.
03:53If you're in competition with each other, when things are going good, you should always be in competition with each other.
03:59Competition helps drive growth and innovation.
04:03Yeah.
04:03Okay?
04:04But when times are tough, families, I said this in the past in interviews, where even families, rivalries and families are there.
04:13When somebody else comes and has a quarrel with you or fight with you, the family gets together.
04:20Similarly, today, we have won the few times that I can, I'm trying to look for a more diplomatic word to say.
04:32I'm an ex-journalist.
04:33So, it's difficult to get diplomatic words out of my mouth.
04:37Let's put it this way.
04:39ASEAN was formed at the peak of kind of a Cold War, 1960s, okay?
04:46When there was rivalries of power, we formed ASEAN forefathers, thought about some way to look at how we can form an alliance among four, five, six, five countries in order for us to be able to be a neutral power or keep that neutrality, centrality of ASEAN.
05:08Today, you are back to, if I can be blunt with you, we are back to square one.
05:16We are back to that similar situation.
05:19Not same, similar situation.
05:20Yes.
05:21And if you look at that, today we have 10 members.
05:25Hopefully, by October, we'll have the 11th member on board.
05:29Hopefully, by next two, three years, we'll have the 12th member, PNG, hopefully will be on board.
05:34But, yes, once we have that neutrality, once we take it further, then we can look at ways to manage things.
05:43But, if you go back to the question that you asked me where, as I said, competition is good when times are hunky-dory.
05:49When things are good, we can be in competition.
05:52It's good.
05:53When times are bad, we can look at being complementing each other.
05:56You are good at something.
05:58Malaysia is good at something.
05:58Thailand is good at something.
05:59We do that, what we are good at, you do what you are good at.
06:03Indonesia is good at something, let them do it.
06:05Philippines is good at something, let them do it.
06:08So, again, these kind of meetings are there where discussions happen and say, hey, how are we going to do, how are we going to take this further?
06:19And leaders talk to each other.
06:22There are so many bilaterals happening.
06:23I am attending 3 or 4 in the afternoon today and another 2 or 3 at least tomorrow.
06:28So, we are looking at all these issues where we can work things out so that we can hammer them out.
06:35Let's put it this way.
06:36And hopefully, hopefully, keep our fingers crossed, we are able to get some kind of a solution.
06:42I hope so.
06:45Most of data shows that most of our produce are most likely same.
06:53Similar.
06:54Similar.
06:54Sorry.
06:55Yeah.
06:55Most likely, yeah.
06:56Similar.
06:57So, how to make sure that sectors and industries compete in a healthy way and make sure that it drive intra-ASEAN trade, especially in coming years?
07:11Okay.
07:12So, say, suppose today, you as a country, I take you as a country, okay?
07:17Let's say Malaysia and Thailand.
07:18Let's put this for two countries.
07:20Malaysia has taken a leap forward to go into certain areas of industries where we have kind of lag behind.
07:29I'll be straight up with you.
07:32Take the semiconductor industry.
07:33Semiconductor, yeah.
07:35Let's...
07:36Semiconductor has 15 to 20 different supply chains, if not more, okay?
07:42You may want to be in the very high end.
07:46See, I'm just making this up, okay?
07:47I don't know where you want to stand or where your government stance is.
07:51If you want to be on the top notch with a value chain, then when Thailand now is looking to do the similar thing,
07:57we should not look into that very high end because we...
08:02Why create that extra competition?
08:06Yeah.
08:06In that value chain, if there are 20 different ones, we can take the second most...
08:12Obviously, had my...
08:14I don't even know what...
08:16I should not even say this, but had my previous government taken this up,
08:19previous government meaning the government of...
08:23The government from 2019 to 2022, okay?
08:25Sorry.
08:26I'm not going to name names, but had they taken up this idea and pushed forward with the truly high end supply chain,
08:34then I would say a different scenario where I would say, let us take the highest end, you take the second tier.
08:40But today, you have left ahead of us.
08:44So we should...
08:45Normally, if I can advise, I would say, let's go to tier 2 or tier 2.3 or 2.5.
08:52Not, you know, just...
08:53In order to make sure...
08:54Just to make sure that you don't be in competition.
08:56Similarly, when I talk about the automotive industry, we are, again, where our strength is today.
09:01Yes.
09:02Because ICE, we are very strong, you know, electric, we are coming on pretty strong supply chain of automotive industry in Thailand is very strong.
09:10Very strong, very strong, the strongest in, I would even say in Thai, Asia, forget about...
09:14Yeah, yeah.
09:15So, when countries such as Malaysia is looking into that area or Indonesia is looking into it, then try to utilize the supply chain that's there.
09:24And that will help create the intra-Asian trade more.
09:30Going back to question one, okay?
09:33Yeah.
09:33While not being in competition, yet increasing the intra-Asian.
09:37So you don't cannibalize on each other.
09:39You want to build something?
09:40Build.
09:41Yeah.
09:41But use our supply chain.
09:44Compliment.
09:45Similarly, complement each other.
09:46That's, again, going...
09:47I'm connecting the various questions for you.
09:49Yeah.
09:49And that way we can help each other rather than kill each other.
09:53I'm sorry.
09:53We cannot be killing each other at this moment of time.
09:56Not at this moment of time.
09:57Of course, yeah.
09:57Sorry.
09:57Yeah.
09:58I'm agreeing.
09:58Not anytime, but...
10:01But, Imej, basically, what are the biggest, especially non-tariff barriers currently that may be hampering intra-Asian trade?
10:10And what's being done to resolve these non-tariff barriers?
10:16I think NTBs are issues that have been kind of a stumbling block for the entire region.
10:25NTBs on customs, custom clearance, you know, shipment.
10:30All those are issues that we have been discussing behind the scene.
10:37We have been looking into it.
10:40The private sector keeps on giving us feedback.
10:43We keep on asking.
10:44There are ways of using digital mechanisms to clear it up.
10:50My Prime Minister, during the primary session today, announced that we look forward to implementing some of these digital, what's called DFAT, is it?
11:01By the end of this year, hopefully, okay?
11:02If things go as planned, because we are the chair.
11:04So, once these things are in place, hopefully, it will expedite the process.
11:10NTBs, we need to kind of...
11:16I understand where each country is coming from for NTB, where on agri-products, every country wants to protect its home turf.
11:26Obviously, politics has its ups and downs and goods and bads, and sometimes political, again, I'm looking for a more diplomatic word.
11:40You have to pacify your political base.
11:45And at times, if you allow free flow of goods and services, services, okay, but goods such as agri, it agitates the population base, the masses, which could create problem for any country.
12:01So, yes, those are, to a certain degree, understandable, but NTBs on other higher-end products, I disagree with.
12:10That should be brought down.
12:13Umesh, I would like to bring our discussion into SMEs and also digital economy, because this is moving forward, and how we can make sure that, for example, like cross-border transaction,
12:27QR payment among the people can be used across countries in ASEAN, how can intra-ASEAN trade, basically, be made more inclusive, especially for SMEs and digital entrepreneurs?
12:45Intra-ASEAN, in terms of financial transactions, has already been taking shape.
12:53Intra-ASEAN, we have QR payments with Singapore, Malaysia, and I think India as well, and Indonesia as well, and we are looking at other countries as well.
13:04So, that's, yeah, financial, it's in place.
13:07Intra-ASEAN, so, once you have it with all these countries, the main kind of economic pillars, I would say, of ASEAN, then the others will follow it.
13:18Intra-ASEAN, I think that should not be a big issue.
13:21Intra-ASEAN, I think it should make things much easier, and obviously, that complements along with what you're talking about, the digital payment system, and transactions being easier.
13:34Intra-ASEAN, I think even on the financial sector, with us, with us meaning the Stock Exchange of Thailand, and the Singapore Stock Exchange, and I think even the KL Stock Exchange, we have a collaboration, where we have a kind of network where we can, we're looking at it.
13:53Intra-ASEAN, so, in terms of digital, and in terms of financial markets, we are looking at more inclusiveness, how far we'll get, that's anybody's guess, I think it's going to take any such discussion, usually involves a lot of Western powers of each country, see, I'm still not a politician, okay?
14:20Intra-ASEAN, I think at the end of the day, when you get to this, the vested interest of the region and the country should be paramount, and no matter whose vested interest, whichever vested interest groups are trying to push it away, one should avoid that.
14:50One should avoid it, for the sake of the country, for the sake of the future growth. And that's, that's my, my, my take on it. So, yeah, hopefully I'm not answering your question directly, because there's still, things are being worked out, but some of the digital payment things are already in place.
15:06So, it should, should be, should be helpful for, for a long term.
15:10We should mention about politics just now. Yeah, we can't run from geopolitics and also global trade, realignment, protectionism.
15:22Has there been a realignment yet? Not yet, man.
15:26Okay. In light of rising global protectionism and also new tariffs, etc., how can ASEAN, in a big context, how can ASEAN better insulate itself and strengthen intra-regional trade flows?
15:42I think what's happening upstairs, that's, that's, that's, that's the best way. I think the fact that all the leaders today are raising the issue of how we can join hands, how we can remain strong, in unity is our strength.
16:02Yes. And that is the ASEAN way. I think that's the only way you can, you can come out with something that's tangible. You know, one of the, I would not name, one of the prime ministers said either ASEAN hangs together or each one of them is hanged one by one.
16:24And that, and that, to me, stands out as a way to simply say, let's get our act together or we'll hang. Okay. Yeah. You said it, I didn't say it.
16:36One more thing that I would like to bring to our conversation is about bilateral and multilateral because we know that the concept that being proposed or used by Americans now that no more negotiation under multilateral but, okay, each country need to come to see me and discuss further.
17:01Okay. Okay. It's fine. But do you optimize or what's your thought on as a block, ASEAN as a block to negotiate with United States on the tariffs or it's better to be each and single country to discuss with their trade representatives and it comes with solution.
17:23You answered the question yourself. No, if you, if you, I'm ex-journalist, so I read, okay, when people ask you questions, I, you answered the question in the first half of your question when you said the United States, you're mentioning the name, not me, okay, United States wants each country to come and negotiate.
17:44Multilaterally. No, no, bilaterally. Bilaterally. So that's, that's answering your question, okay.
17:49ASEAN as a grouping still believes in multilateralism. Multilateral way of dealing has been our strength, will remain our strength and will continue to be our strength.
18:07If a country is looking for unilateral, oh no, yeah, bilateral, then you as an ASEAN group cannot push your way into negotiating with that country on a multilateral basis.
18:24You'll have to listen. If you're the country that's saying, I only want bilateral, I cannot have 10 or 15 countries along with me and say, hey, deal with me or, you know, just walk out.
18:35Yeah, we can't do that. I'm sorry, but that's a fact. So if a certain country is not willing to, and I'm not naming that country, I'm being a politician for a change, then we cannot push our way into negotiating on a multilateral basis.
18:52It has to be bilateral. But we as ASEAN, believe in multilateralism and we remain committed to that.
18:59Of course, Umish, lastly, finally, finally, sorry. My last question is to you. What is your, maybe your key message to ASEAN business leaders or maybe the government itself as we chart the ASEAN Economic Community
19:18community, 2025 and beyond, and now soon to be ASEAN Community Vision 2045 for another 20 years, your key message to ASEAN, especially in the context of among the business leaders?
19:33I think, I think, very good question and very good points. We have, I have been covering ASEAN since 2004, if I remember correctly, as a journalist.
19:44I believed in ASEAN, 2015 was the day I said, you know, this is where ASEAN would be. We will be together. Okay, we will be, uh, did it happen? Yeah. So, so it did, it did take place. But I think what is required now is enhanced integration.
20:09Okay. We have integrated, yes. Okay, I'll give my, my country, okay?
20:16Thai companies have invested heavily in Malaysia, Vietnam, Indonesia, Myanmar, Laos, Cambodia. It's pretty decent. Yeah. Pretty decent.
20:29Malaysian banks have come in here in Indonesia. Singaporean banks and Singaporean companies, some of them have, obviously,
20:39banks have gone very soon. So, in terms of integration, yes. Manufacturing and mine, and, call it, okay, I would not say mining, but manufacturing and other, other industries, not so much.
20:56Hmm. My companies, my, Thai companies have gone. Yeah. Across the region. Singaporean, not so much. Malaysian, so, so. Yeah.
21:05Yeah. Indonesian, so, so, sorry. Yeah, yeah, yeah, no worries. So, there are, there are, it cannot be a one-way street. I think, in terms of integration, every country has to take that extra,
21:20they have to walk the extra mile, to be able to integrate better into that. Some countries say, oh, the market size is big enough, you cannot expand.
21:32Yeah. Yes, but, you can, it still expands part of it, test the market. Yeah. If a product, say, you know, I'll just make, say, some, something, some product that's edible product.
21:45Hmm. If a product that you're catering to, and you have, say, suppose, I'm just making this number up, 50 million population, I'm not going to say a bigger number,
21:53because then you'll figure out which country I'm talking about. So, if you have 50 million population, it's a young population.
22:00Today, Thailand has a population base of 67, 68 million, and it's aging, so average population of 40.
22:08And then, if your edible product is catering to younger generation, you look at something that's, for the older generation.
22:15Yeah. And you expand a small portion of that into my country.
22:19Hmm. To get it. It's, it helps. Yeah.
22:23You know, you're looking for food processing. Okay. You're looking for food security. Okay.
22:28I'll give certain countries, including your country, you want the food security. Singapore wants food security.
22:33Yes. Indonesia wants food security. What's the best way of food security? Set up a plant in a food secure country for processing food so that you can store it.
22:45Yeah. Which is one of the most secure in terms of food security in this region, Thailand.
22:50Yeah. Right. Come on. Come and put your plants there. It'll help secure your food security. You ship it back to your country.
23:00Yeah. Processed food as well. It's a win-win for you and for us. Yeah.
23:05So, again, these are things where integration will and needs to be taken forward. And that has to come from the business sector and ability to push that through.
23:16I'm, I'm, I'm, I'm glad, you know, one of your, one of your, one of your companies, last time I was here, about two months ago, made a commitment to, to setting up about 20 to $30 million plant in Thailand for food processing.
23:31Oh.
23:32And, sadly, I'm here. Not, sadly, I'm here. We are having food, uh, Typhix. It's a food, food, uh, fest. Not fest, but it's a exhibition.
23:43Exhibition. Okay.
23:44Uh, in starting tomorrow. And this person is flying there tomorrow. Uh, I think it's night to hold meetings and to find out how, which companies we should join up.
23:54So, these are things where, where, where we can help each other, complement each other. And, again, back to this question one.
24:02Again, all that leads to greater intra-Asean trade. Intra-Asean investment, intra-Asean trade. Who benefits from it? The 670 million ASEAN people.
24:14So, at the end of the day, the private sector has to take that effort, make the effort, push for it, see where the value is, see where you can push things through, and then take it forward.
24:24The government always is a facilitator. We can pitch, we, we can pitch, you know, we can pitch things day in, day out to you.
24:32Yeah. But you, with the money, are the ones who are going to make the decisions. And you have to think, yeah, and you have to think, what is aligned with your country's best interest?
24:43What's aligned with your interest? What's aligned with your shareholders' interest? And if it all makes sense, come. We'll facilitate things.
24:53Of course, complementing each other. Exactly. At the end of the day. And it gives benefits to all of us.
24:58Thank you so much, Umesh. Thank you.
25:01Thank you for your time. And, of course, we look forward for more time with you and to discuss further, especially looking forward into Asean Community Vision 2045.
25:10Thank you for now. I'm Haris Ashraf Haslan. Stay tuned. Continue with us in Estrawani.
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