ASEAN-US ECONOMIC RELATIONS : PROBLEMS AND PROSPECTS

Abstract

Although ASEAN is a regional organisation, bilateral relations have always been more important than intra-regional activities. This academic exercise attempts to examine the asymmetrical bilateral economic relations between ASEAN and the US, the problems faced and prospects in view of the Japanese challenge. The US has always been a major source of market for ASEAN's products. Both investments and technological transfer flow one way from the US to ASEAN. Declining commodity prices, non-tariff barriers imposed on ASEAN's exports to the US and barriers imposed on US investments in ASEAN are problems in their economic relations. Although Dialogue Systems have been established, they have not been very successful in addressing the economic problems faced by the ASEAN countries in their relations with the US. In recent years, increasing economic importance of Japan in the world and especially in the Asia-Pacific region has threatened the ASEAN-US economic relations. Although the US has never regarded ASEAN as an important economic partner, she has now realised that her ablility to take up the Japanese challenge and to maintains her economic status in the Asia-Pacific region would be seen as her ability to remain important in the world economy. Besides, the Asia-Pacific region still maintain political, strategic and ideological importance in the eyes of the Americans. As such, the US has been formulation policies to strengthen her economic ties with ASEAN. Whether the US will succeed depends very much on her ability to regain her macroeconomic balances and whether she is going to continue imposing self-defeating protectionistic measures on Japan. ASEAN on the other hand, has realised that she has become too dependent on the two economic superpowers. Attempts to foster tighter intra-regional economic cooperation h1ve not been very successful due to similarities in the structure of the ASEAN economies and the political ideologies of their governments. Prospects for strenthening relations with some existing economic partners have not been very bright due to world wide protectionism. Therefore, the ASEAN countries still have to rely on both the US and the Japanese economies, at least in the short run. Hence, prospects of the ASEAN-US economic relations in view of the Japanese challenge depends on the economic conditions of the world in general and the economic policies of ASEAN and the US in particular.