It is probably time that the US and Southeast Asia shift gears in their conversation. The one they have been having thus far is in danger of being stuck in a rut, Lee Sue-Ann writes. Just as the US needs to find new ways to economically reengage the region, Southeast Asian leaders also need to internalize what the US has been saying. In a new paper, the third in our series on China and globalization, Stewart Paterson asks: Did free markets fail globalization? As states that eschew market forces as their major policy drivers rise to prominence in the global trading order, many of the mechanisms that should have ensured sustainability and equity in the system have broken down. Plus, catch a sneak peek and register for the official launch of our Hinrich-IMD Sustainable Trade Index 2023, and our latest reading list on WTO reform.
NEW ARTICLE
Hard truths in the US-Southeast Asia dialogue
Lee Sue-Ann 3 October 2023
The strategic conversation between the US and Southeast Asia is in danger of being stuck in a rut. Southeast Asian leaders have repeatedly stressed to Washington that it should rejoin a regional free trade agreement here and expressed reservations about US initiatives like IPEF. American leaders have told counterparts here that these refrains are getting worn. The sense of frustration over how differently the two sides perceive the China threat was palpable in a recent Asia Society Task Force report, ISEAS-Yusof Ishak Institute Senior Fellow Lee Sue-Ann writes. This mismatch in perceptions has serious implications. The question before Southeast Asian leaders now is how to convince the US and its allies that there is a way forward to cooperate.
In the last three decades, the global trading system slashed tariffs and fostered borderless commerce. But the system was built on free-market theories, over which there was little scope for enforcement behind national borders. As a consequence, the rise of giant economies such as China that eschew market forces as their major policy mechanism led to many of these theoretical mechanisms – which should have ensured sustainability and equity in the system – failing to materialize or breaking down. More nations than ever before are ditching a laissez-faire approach to trade in favor of a return to state-driven mercantilism. Research Fellow Stewart Paterson asks: Did free markets fail globalization?
The Hinrich Foundation will launch the fifth iteration of its Sustainable Trade Index (STI) on 24 October 2023. The index, developed in partnership with IMD World Competitiveness Center, measures 30 key global economies, representing two-thirds of the world's population and GDP, on 71 economic, societal, and environmental indicators that provide a framework for sustainable global trade. Register here to join the official launch of the STI 2023 on 26 October.
World leaders are talking about reforming the World Trade Organization (WTO), but what are the prospects for change? Who are the leading participants in developing critical technologies? Explore our reading list for the latest developments in global trade.
