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ASEAN at Inflection Point

The 10-nation grouping has placed priority on the Regional Comprehensive Economic Partnership as a centerpiece of its external economic relations, particularly at a time of growing uncertainty in global trade
ASEAN economies are increasingly concerned over collateral damage from the US-China trade war.ASEAN economies are increasingly concerned over collateral damage from the US-China trade war.

Southeast Asia’s foreign ministers on Thursday reiterated the need to integrate further and stay nimble amid technological disruptions. These were laid out in a wide-ranging joint statement that also included a sign of progress for negotiations on a code of conduct in the disputed waters of the South China Sea.

The 26-page joint communique was issued at the end of a series of meetings at the Singapore Expo, where officials from the 10-member Association of Southeast Asian Nations also met with key partners from the region, such as Japan and China, CNA reported.

Speaking at a press conference, Singapore’s Foreign Affairs Minister Vivian Balakrishnan described the wide variety of topics discussed as the grouping’s responses to “tectonic shifts” that have rendered ASEAN at an “inflexion point”.

“We are facing challenges because the world as we know it for the past 70 years has changed,” he said, citing the emergence of a multi-polar world, brewing trade wars and disruptive shifts caused by a "digital revolution".

Despite that, ASEAN has to remain relevant and improve the lives of its people, he said.

For one, ASEAN member states reaffirmed their commitment to deeper economic integration through various ASEAN-led initiatives, as well as the conclusion of the Regional Comprehensive Economic Partnership.

“We reiterated the priority placed by ASEAN on the RCEP as a centerpiece of its external economic relations, particularly at a time of growing uncertainty in global trade,” the joint communique said.

The ministers also agreed to “fully tap the opportunities afforded by new technologies and innovation arising from the digital revolution”, though they stressed the need to stay responsive to emerging issues, such as non-traditional security threats and environmental challenges.

A “major achievement” also came in the form of an agreement with China on a single draft for future negotiations on the code of conduct in the South China Sea, said Balakrishnan.

However, he told reporters that the draft document does not mean that negotiations are over, or that all the competing claims over territory in the South China Sea are resolved. He also said it would be premature to set a deadline for the negotiations.

Cyber Security a Concern for All

Balakrishnan was also asked about a media report on a potential cyber security agreement between ASEAN and Russia.

To that, he would only say that the regional grouping is not looking for any “exclusive arrangements” and that it is open to cooperation with “as many partners as possible in order to secure (the region’s) networks (and) maximize opportunities in this digital revolution”.

The minister added that while the digital revolution brings with it opportunities, the issue of cyber security needs to be addressed before the benefits of the digital revolution can be reliably harvested.

“Cyber security is a concern for all of us. We will work with all partners who are willing to engage us, share technology, best practices and failures so that we don’t repeat mistakes.”

Amid Escalating Trade War

The escalating trade war between the US and China has prompted the ASEAN to call for accelerated negotiations on the RCEP, a free trade framework involving ASEAN and six partner countries, Nikkei reported.

On Wednesday, it emerged that US President Donald Trump had asked his trade representatives to consider increasing proposed tariffs on $200 billion of Chinese imports to 25% from 10%.

"ASEAN will feel the collateral damage from the US-China trade war," said Chua Hak Bin, an economist at brokerage company Maybank Kim Eng.

The joint communique called for "the swift conclusion of the RCEP negotiations and achievement of a modern, comprehensive, high quality and mutually beneficial agreement."

But a number of contentious issues are yet to be agreed, not least India's reluctance to further open its market to Chinese imports, raising questions over how quickly a deal can be reached. The bloc's ability to persuade its partners to move in the same direction will be crucial to reaching an agreement.

The statement described RCEP as a priority, "particularly at a time of growing uncertainty in global trade."

Prepare for the Future

As the rules-based multilateral trading system comes under pressure, ASEAN has to stay the course and press on with economic integration, Singapore’s Prime Minister Lee Hsien Loong said.

"It is important that ASEAN continues to support the multilateral system and work with like-minded partners to deepen our web of cooperation," he said in a speech to foreign ministers from all 10 ASEAN countries and diplomats at the opening ceremony of the meeting.

And with the fourth industrial revolution underway, the region must make full use of technology to bring ASEAN closer together, embrace innovation, build up digital connectivity and prepare itself for the future, Lee said.

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