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GICA RESOURCE LIBRARY

Policy Brief

Building Complementarity and Resilience in ASEAN amid Global Trade Uncertainty

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Published
2018
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This brief explores how greater regional cooperation and integration within the ASEAN Economic Community can guard against the effects of global trade uncertainty.

Growing bilateral trade tensions between the United States (US) and the People’s Republic of China (PRC) are a concern for members of the Association of Southeast Asian Nations (ASEAN). Most ASEAN economies are open and benefit from export-led growth. They have significant trade ties with the US and the PRC and also export goods — such as electronics or automobiles — now targeted by US trade restrictions. In the near term, the US–PRC trade tensions will likely undermine global trade by raising import prices.

The escalation of US–PRC trade tensions will have both direct and indirect effects on ASEAN. The direct impact will likely be negative — as global trade falls due to the increase in import prices. The indirect impact—which would include possible trade diversion or creation effects — could be positive, particularly for countries that compete with the PRC in the export goods market.

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