US senator urges Obama to sign FTA with ASEAN

Updated On: Jun 30, 2011

United States senator Richard G. Lugar, Republican Leader of the Senate Foreign Relations Committee, has introduced legislation encouraging the Obama administration to start Free Trade Agreement (FTA) talks with ASEAN.

Lugar said US passivity on this front sends the wrong message to ASEAN, which collectively represents the fourth-largest and fastest-growing export market for the US. The US is also a major importer of ASEAN goods.

In a statement, Lugar warned "the reluctance of the Obama Administration to signal its commitment to developing a strategy for pursuing an FTA with ASEAN suggests to ASEAN leaders that they should first look to China, India and elsewhere for comprehensive trade interaction."

Report: Lugar urges US-Asean FTA negotiations [The Nation, 30 June 2011]

Lugar introduced similar non-binding legislation two years ago, calling on the US to pursue FTA talks with ASEAN. It was referred to the Senate Committee on Finance, but no progress was made.

The idea of a US-ASEAN FTA enjoys some support among US lawmakers, but it has been unable to gain traction in Washington due to a general lack of enthusiasm for complex free trade deals. Myanmar's membership in ASEAN presents another stumbling block.

Report: US senator renews call for Asean FTA [Straits Times, 30 June 2011] (Requires login)

The Obama administration also seems to favour a different regional trade agreement, the Trans-Pacific Partnership (TPP), rather than signing a deal with just ASEAN countries.

The TPP is an existing multilateral FTA between Brunei, Chile, New Zealand and Singapore, which entered into force in 2006. Five more countries are currently negotiating to enter the agreement, the US, Australia, Malaysia, Peru and Vietnam.

Officials are drafting a new deal to include the prospective members, and hope to finish talks by November this year. Last week, trade representatives met in Vietnam for a seventh round of talks, discussing issues like investment liberalisation, facilitating supply chains, and creating opportunities for small-and-medium enterprises.

Report: Trans-Pacific partnership yields good results - and more on way [Viet Nam News, 28 June 2011]

But Lugar has suggested that a potential US-ASEAN FTA need not be mutually exclusive with the TPP, as the two trade deals could co-exist. The US senator added that the US must match action to words and expand its relationship with Southeast Asia.

Total trade between the US and ASEAN hit US$178 billion in 2010, with US exports to ASEAN up 31 percent over 2009 and US imports from ASEAN up 17 percent.

Singapore topped the list of ASEAN countries for US exports last year, followed by Malaysia, Thailand, the Philippines and Indonesia. The top five ASEAN import suppliers to the US were Malaysia, Thailand, Singapore, Indonesia and Vietnam.

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