KUALA LUMPUR: Asean members should speed up the process of reforming its trade and investment environment amidst the US-China trade uncertainties to attract more investors and businesses to the region.
Professor Mari Elka Pangestu, Board of Trustees Member of the Centre for Strategic and International Studies Foundation, said domestic reform was necessary, while at the same time, Asean countries should continue to engage and manage their trade relations with these two major economies.
“Domestic reform also means that Asean countries (must) open up their markets to each other, continuing to strengthen the Asean partnership.
“It would give assurance to investors in terms of certainties, especially in the current situation whereby investors and businesses are confused (by the trade war),” she told reporters at the Asean Roundtable Series on ‘ASEAN 2040: The Imperative of Collective Leadership, Integration and Centrality in Uncertain Times’ yesterday.
Asean countries should not be squeezed, and get trampled between the two big elephants (US-China) nor take any sides in this matter, she said.
Mari, who was the former Minister of Trade of Indonesia, elaborated that Asean countries, particularly Malaysia, Thailand, the Philippines and Vietnam would most potentially be the alternative exporters from Asean to replace goods from China in the US market.
However, she noted that the global value chain (GVC) linkage to China would put more downward risks on some Asean countries.
“While countries such as Malaysia and Vietnam may benefit from trade reallocation, they might also lose due to slower Chinese exports and link to the GVC,” she said.
In Malaysia’s case, she said exports of the country’s electronics component would be affected as the country is one of major suppliers of electronic goods to China, with the latter being targeted by the US due to its electronic exports.
Hence, to overcome this, Malaysia should look into offering its own electronic end-products to the US as well as look into offering contents of the electronic goods.
“Malaysia should be able to benefit from the trade war if US electronic companies are looking for another option than to assemble in China, and Malaysia should be looking more than becoming a transhipment hub,” she added.
Meanwhile, the panellists at today’s roundtable session emphasised that Asean must take proactive steps in pushing for global multilateralism as an alternative to waning US hegemony, and at the same time, deepen dialogue and cooperation with fellow middle powers including Japan, India and Australia to navigate the current great power rivalry.
Economic Research Institute for Asean and East Asia chief economist Professor Fukunari Kimura said Asean should be proactive to utilise information technology including artificial intelligence and robotics as well as communication technology such as the Internet and smartphone to further activate existing industries and create new businesses.
“Asean, particularly Malaysia and Thailand, has aggressively participated in international production networks of machinery industries and we believe that complementarities between robotics and local resources may be the key for keeping production blocs in Asean,” he added. — Bernama