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Opinion | How the US-China trade war will make or break Asean

  • Derwin Pereira says the trade war is pushing Asean to an ideological crossroads
  • The Southeast Asian countries that grouped together during the cold war now have to choose between the US and China, in a decisive test of Asean’s resilience

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Illustration: Craig Stephens
Asean could be split by the trade war that has broken out between the United States and China. The consequences of a rupture would be not only economic but strategic.
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Economically, Southeast Asia is an integral part of global value chains of production in which the economic superpowers – the US, China, the European Union, Japan and India – occupy nodal positions. Without those value chains, the Association of Southeast Asian Nations would lose its catalytic role in the global economy. Deglobalisation, brought about by the Sino-American trade war, would hurt the superpowers but it would be more ominous for Asean, whose regional rationale is founded on its global relevance. Diminishing interdependence and integration would undermine that rationale.

It is a platitude that the liberalisation of trade in goods and services has increased Asean’s economic bandwidth. The more important realisation is that such liberalisation is not the natural outcome of domestic factors but a congruent regional attempt to plug into global economic opportunities.

Despite trade war, US and China now communicating ‘at all levels’

The European Union has benefited from the existence of national, economic and political affinities in a culturally homogeneous region, intrinsic resources it has marshalled to resist North American dominance of the global economy. In contrast, Asean's disparate nations came together not because of their indigenous similarities but because the rest of the world made them come together. The alternative would have been to remain separate.

Globalisation amplified Europe's regional coherence, but it initiated the very economic region called Asean. That is why the US-China trade war has raised the stakes so high for Asean. Its economic coherence will be threatened by the world’s two economic superpowers falling out, and peer powers choosing sides .
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Asean, too, will face having to choose sides. However, it will not go over to one side completely. Since it is neither a country – like the US or China – nor a supranational entity – like the EU – it could break up along the fault lines created by its member nations’ external affiliations.

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