00:00Bilateral trade between China and ASEAN, the Association of Southeast Asian Nations, has
00:05seen huge growth since the launch of a free trade area in 2010. China has been ASEAN's
00:10biggest trading partner for 16 years, while the 10-nation bloc has also been China's biggest
00:16trading partner for the past five years. And last year, the value of trade between China
00:21and ASEAN rose to nearly $1 trillion. Rajiv Biswas, CEO of Asia Pacific Economics, Singapore-based
00:28economic research group.
00:29I think when we look at the history of ASEAN in the last 20 years, the cohesion between
00:38ASEAN countries in terms of economic development has been a very successful outcome. And also
00:44their trade integration and efforts to improve investment flows have resulted in the GDP of
00:52ASEAN doubling since 2010. So that's a very positive outcome built on these foundations
00:58of continuous efforts by ASEAN governments to work closer together and to reduce barriers
01:07to trade.
01:08When we look at ASEAN countries, though, when it comes to these U.S. tariffs, different
01:13countries facing different ones, also with different economic priorities at home, how can
01:18they best operate in a united way?
01:20I think the U.S. is pursuing bilateral negotiations with each of the countries. So it's difficult
01:29for ASEAN to be presenting a unified negotiation front to the U.S. So it will be bilateral talks
01:39between each of the countries and the U.S. But I think what ASEAN leaders have been discussing
01:46at the ASEAN summit is to how to strengthen intra-ASEAN trade. That's very important already. About 25% of ASEAN trade is amongst their own member countries. And also how to strengthen trade agreements with other partner countries, such as the regional comprehensive economic partnership, otherwise known as ASEAN.
02:15ASEAN is RCEP. CPTPP is also a regional trade agreement where a number of the ASEAN countries are members. And also a big outcome that we've seen ahead of this summit was an agreement between ASEAN and China called CAFTA-3, which is going to be a very important foundation for strengthening trade between ASEAN and China, which is already huge.
02:43China is the biggest trade partner for ASEAN. So that's a very important new agreement.
02:49Well, I want to talk a little bit more about that relationship between ASEAN countries and China. Again, these trade tensions perhaps changing that relationship. What do you think it will mean for that?
02:58I think when we look at what ASEAN is faced with in terms of the challenges from much higher U.S. tariffs on many of the countries in ASEAN, for example, Vietnam's facing a potential reciprocal tariff rate with the U.S. of 46%.
03:18Indonesia, the biggest economy in ASEAN is facing a reciprocal tariff of 32%.
03:24So these are very damaging potential tariffs. They're not final yet. So we'll have to see what the outcome of the talks are.
03:33But I think what it means for ASEAN is that they're working very hard to look at how to diversify their trade and reduce their reliance on the U.S.,
03:43which is certainly a very important export market, and try to build up South-South trade and diversify their exports to other important markets, such as China, of course,
03:55and then the Middle East is also very much at the forefront of ASEAN focus.
