UK–ASEAN trade increased by over 20% last year — worth £47 billion — but there is a huge opportunity for more businesses…reports Asian Lite News
International trade minister Nigel Huddleston is visiting two Southeast Asian countries to kickstart new discussions aimed at ramping up UK trade with the region. Southeast Asia’s economy is expected to become equivalent to the third largest economy in the world by 2027, worth over £4 trillion.
UK–Association of Southeast Asian Nations (ASEAN) trade increased by over 20 per cent last year—worth £47 billion—but there is a huge opportunity for more businesses across the UK to tap into this massive economy. As the first new Dialogue Partner to ASEAN in 25 years, the UK is well positioned to boost economic growth with this dynamic region, contributing to a more prosperous future, the UK’s department for business and trade said in a press release.
The minister recently joined the ASEAN counterparts in Semarang, Indonesia for the ASEAN Economic Ministers UK Consultation to boost ties with the dynamic and fast-growing trading group.
He will then travel to Hanoi to co-host the annual Joint Economic and Trade Committee (JETCO) and the Trade Committee of the UK-Vietnam Free Trade Agreement. During these, the minister will push forward the UK’s ambition to help UK companies sell more products and services to Vietnam’s booming economy.
“Southeast Asia offers big opportunities for British businesses. That’s why our team of specialists has been working hard to remove barriers to trade to help companies sell even more to this dynamic region. We know closer trade ties with exciting, thriving economies like Vietnam and Indonesia will provide a boost for the UK. I’m looking forward to seeing how our expanded links across the Indo-Pacific, including accession to CPTPP, yield economic benefits up and down the country,” said Huddleston.
The visit comes just weeks after business and trade secretary Kemi Badenoch signed the treaty confirming the UK’s accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)—the Indo-Pacific trade bloc now worth £12 trillion in gross domestic product (GDP).
It also follows the resolution of over £600 million worth of trade barriers over five years in the financial year 2022-23 that were hampering UK businesses from selling to Asia Pacific.
Earlier this year, Badenoch made the removal of these trade barriers one of her top five priorities, committing to lifting 100 of the most significant hurdles.
The United Kingdom was the seventh largest foreign investor in the ASEAN in 2022. In 2021, the stock of outward FDI from the United Kingdom to the ASEAN region was at least £25.1 billion, a joint statement released after the meeting said.
The meeting exchanged views on regional and global challenges, such as the multidimensional impact of the pandemic, climate change, heightened volatility in the global financial market, inflationary pressures and geopolitical tensions that affect global food and energy security, all of which could potentially affect economic and trade relations between ASEAN and the United Kingdom.
It reaffirmed its commitment to a rules-based, non-discriminatory, open, free, inclusive, equitable, and transparent multilateral trading system, with the World Trade Organisation (WTO) at its core.
It also highlighted its support to strengthen the WTO and ensure that it remains fit-for-purpose and forward looking by pursuing reforms to improve all its functions, including to have a fully functioning dispute settlement system.
ASEAN’s crucial role
The Association of Southeast Asian Nations (ASEAN), the bloc which, at present, is negotiating free trade agreements with other nations, is expected to play a significant role in the future of the global economy, Japanese Scholar Takashi Hosoda said.
“As long as it helps the ASEAN countries’ economies expand and their societies advance, I have no issues with the decrease or elimination of tariff and non-tariff obstacles through a free trade agreement (FTA), the author writes, adding that if a nation attempts to increase its own influence through strengthening the content of its FTAs, based on a distinct strategic goal inside itself, it becomes a situation to remain alert,” he wrote. The ASEAN region’s security situation is, nevertheless, radically altering and the future of ASEAN depends on this process, the author stated.
Underlining the China-ASEAN pact, the Japanese Scholar opined that in addition to facilitating trade between ASEAN and China, the ASEAN-China Free Trade Area (ACFTA), which was established in 2005 as a trade-in-goods agreement and later expanded to include a trade-in-services agreement, investment agreement, and investment agreement in 2010, has also helped to advance trade in the region as a whole.
However, he also stated that under ACFTA, China may be able to advance its political objectives in this situation by making appropriate concessions to ASEAN nations.
ALSO READ-India, ASEAN discuss trade and cooperation in Semarang Summit