The 47th ASEAN Summit has seen the signing of several trade and ceasefire deals. Cynthia Ng and Hafidzi Razali unpack the message behind these moves and what it means for Malaysia as chair.
00:00The 47th ASEAN Summit moves into day two and it's already shaping up to be a defining one, witnessing trade and ceasefire deals.
00:09What's the strategic message behind these moves and what does it mean for Malaysia as chair?
00:13Estorawani correspondent Cynthia Ng unpacks this at the Kuala Lumpur Convention Centre.
00:19Joining me on the sidelines of the ASEAN Summit is Hafizi Razali.
00:24He is the CEO and founder of Strategic Council.
00:28So, great to have you here, right here at KLCC.
00:30It has been quite a hectic few days, I would say.
00:33So, let's start with that.
00:34We saw a ceasefire agreement.
00:37We had Trump visiting Asia for the very first time since he returned to office.
00:43And we also had a US-Malaysia trade deal finalized.
00:48Let's talk about your impressions on what has happened so far.
00:50Some are calling it a diplomatic win for Malaysia.
00:54Would you agree?
00:55I would agree so mainly because we are able to resolve and speak on various issues, be it regionally or globally.
01:03And of course, with the inclusivity that we practice, not only that Malaysia has strengthened relations with our ASEAN member states,
01:11but also with our dialogue partners, Japan, South Korea, China, and continue to ensure that the bridge with the United States remains intact.
01:19But more importantly is to be collaborative in the sense that now we are also including the president of G20, South Africa, president of BRICS, Brazil.
01:29And we have also engaged the European Union quite extensively.
01:33So, I think it has been a diplomatic win for sure.
01:36And the outcome of it, as we can see from the summit in the past few days, there are a lot of documents that have been agreed on that centers on not just trade and economic development,
01:47but also on other issues such as research and development, human capacity, some technical arrangements as well.
01:54So, yeah, overall it has been a very good championship for Malaysia and the double-edged situation about that is how do you ensure that the championship momentum is continued by the successor of Malaysia's championship, which is the Philippines.
02:07All right. I want to hone in on Trump's visit first because this is, of course, the biggest highlight of the ASEAN Summit.
02:14Do you see his visit to this part of the world is in some ways a renewed sense of U.S. engagement towards this region?
02:25And what stood out to you the most in terms of his tone and language when you saw Trump here?
02:31Right. President Trump has always been objective in what he wants to achieve.
02:35And obviously, as part of the arrangement of him coming here as well is to oversee the peacemaking arrangement between Thailand and Cambodia.
02:43And now we have the KL Peace Accord, of which Malaysia was very instrumental in making sure that both parties actually speak to each other.
02:50But more strategically is for them to ensure that there is an understanding on what more can be done in terms of the U.S.-ASEAN trade alignment.
02:59Because obviously now Trump will have his domestic needs to be fulfilled as well, particularly in ensuring that the trade imbalances are resolved by the end of his presidency in the near future.
03:13But more importantly is for Malaysia, we also had the opportunity to resolve some of the uncertainties on terrorists, particularly.
03:20And yesterday we saw the statement of which Malaysia has managed to ensure that its territories are not increased.
03:2719% is still high compared to what we had in the past years before Trump.
03:31But it's still a reduction from 24-25% that we had, although there are still rooms for improvement for us to do more.
03:38Because we saw that, yes, 90% have been retained.
03:42But in that text that was released by the White House on the U.S.-Malaysia trade agreement, there were some languages that were quite, number one, a bit open-ended still.
03:54And if you look at some of the limitations, for instance, it includes Malaysia's pledge not to ban or restrict exports of critical minerals to the U.S.
04:05So just one of the highlights that stood out to me.
04:07So in your opinion, how do you see this?
04:09What are the biggest gains and where do you think we made some trade-offs?
04:14Right.
04:15The biggest gain for Malaysia is to ensure that the territories are not increased beyond what we have seen.
04:19Because we have seen precedents of President Trump increasing tariffs, such as what happened to Canada.
04:25That's one.
04:25Secondly is that we have managed to secure exclusions or exemptions for our strategic sectors, particularly for electronics as well as semiconductors.
04:34So that forms about maybe 15% of strategic exports to the U.S.
04:39So that's not tariff, zero-rated.
04:42Although there are conversations on how difficult it would be to actually fulfill those requirements.
04:47But that's a different conversation altogether.
04:50But also more importantly is to ensure that Malaysia remains in the trust environment, a trusted environment of the U.S.
05:00Because by being an aligned partner of the U.S., essentially that means that we have been chosen to actually be participative in the supply chain of the U.S.
05:12And you mentioned about rare earth.
05:14So that's probably one of the highlights of which the U.S. may take home as a victory.
05:19Because they are trying to diversify the markets, but to diversify from only selected partners, of which Malaysia is one of them.
05:27But of course, there are also concerns from the Malaysian side on what would happen for the companies who are not included as part of the exclusions.
05:35Because the tariffs are going to be a hindrance for our products and services to be more competitive in the U.S. market, for example.
05:43And the compliance requirements can be quite rigorous, especially for SMEs to match up to.
05:50So perhaps there should be more conversations at the industrial policy, national industrial policy,
05:55on what the Malaysian government can actually do more to ensure that those who are not benefited,
06:00those who have not benefited from this arrangement can still remain on the winning side rather than losing.
Be the first to comment