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US-China trade spat looms over regional WEF meeting
HANOI, Sept 12, 2018 (BSS/AFP) – Threats by US President Donald Trump to
slap more punishing tariffs on Chinese goods are set to dominate a meeting of
Asian business bigwigs and leaders that opens Wednesday in Hanoi.
The escalating trade spat between Washington and Beijing has caused global
ripples — and is being closely watched in Southeast Asia where many export-
focused economies are set to gain from the fallout.
Trump has already imposed 25 percent customs duties on $50 billion worth
of Chinese goods — triggering a tit-for-tat response from Beijing — and
vowed last week to increase tariffs to hit $200 billion in Chinese imports
“very soon”.
The mounting dispute looms over a regional World Economic Forum (WEF)
kicking off in the Vietnamese capital Wednesday morning where leaders from
the Association of Southeast Asian Nations (ASEAN) and business executives
are meeting.
“ASEAN countries don’t want to count their chickens before they hatch, but
I think they see it on a net basis as a gain for them because it means
shifting manufacturing into Southeast Asia that was…(earlier) in China,”
Fred Burke, managing partner at Baker McKenzie in Vietnam, told AFP.
Rising labour costs in the world’s second largest economy have already
precipitated a push into countries like Vietnam and Cambodia where Adidas
shoes, H&M T-shirts and Samsung phones are made on the cheap.
But the trade war has accelerated that process, with several Chinese firms
turning to the region to produce items from bike parts to mattresses in a bid
to avoid the new US tariffs.
– Protectionist woes –
Although the spat is likely to boost foreign investment in Southeast Asia,
some analysts warned the long-term impact may be less rosy.
“There are concerns that protectionism is not good for Asia as a region
because it’s a very export-driven region, so any shift toward more trade
barriers… is not good,” Rajiv Biswas, Asia-Pacific chief economist at IHS
Markit, told AFP.
MORE/HR/0922
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ASEAN trade increased by a value of nearly $1 trillion between 2007 and
2014, according to WEF, as the bloc has enthusiastically embraced trade
liberalisation — in contrast to the policies promoted by Trump.
In one of his first post-election moves, the US president pulled out of
the sprawling 12-nation Trans-Pacific Partnership (TPP), calling it a job
killer.
The current edition of the WEF, which closes Thursday, is officially
themed ‘Entrepreneurship and the Fourth Industrial Revolution’, with a focus
on how economies should adapt to so-called ‘disruptive technologies’ like
automation and artificial intelligence that threaten to replace human jobs.
Several regional leaders are slated to attend the forum, including
Indonesian President Joko Widodo, Cambodia’s newly re-elected strongman Prime
Minister Hun Sen and Myanmar’s de facto leader Aung San Suu Kyi, who faces
fresh global scrutiny over the Rohingya crisis.
She is scheduled to speak at the forum Thursday, though organisers have
not said whether she will discuss last week’s ruling by the International
Criminal Court that allows its chief prosecutor to investigate the forced
deportation of 700,000 Rohingya Muslims by Myanmar’s military as a possible
crime against humanity.
Myanmar has also faced international censure over the decision to jail two
Reuters journalists for seven years for their coverage of a Muslim massacre,
under a draconian state secrets law.
South Korean and Japanese foreign ministers will also host a session
touching on tensions with North Korea and regional security issues Thursday.
BSS/AFP/HR/0925