Despite U.S. withdrawal from the Trans-Pacific Partnership (TPP), AmCham President Tara Joseph – who expressed her views on the subject in the SCMP last month – explains that trade with Asia is increasingly tied to U.S. economic growth
By Kenny Lau
How important is Asia to U.S. businesses, and vice versa?
Asia is the fastest developing market for both goods and services in the world. There is a rising middle class, fresh potential for large infrastructure projects stretching from Sri Lanka to the Philippines, and a developing pipeline of opportunities for finance, law and technology firms.
Asia today accounts for about 60 percent of the global economy, and American companies are heavily engaged across the region. There are over 1,400 U.S. companies operating in Hong Kong alone. Overall, 15,000 U.S. companies are open for business across the region, and the value of investment across the region totaled US$620 billion in 2016.
A free flow of trade will help smaller, underdeveloped economies grow and lift people out of poverty across Asia. Greater engagement between the U.S. and China will bring a slew of fresh business opportunities to Hong Kong, the first and ultimate gateway city between East and West.
What should be the approach to “engagement?”
Engagement means developing strategies for growth, not strategies for isolation. Importantly, a strategy for trade engagement in Asia is not at odds with President Trump’s America First initiative. Conversely, it helps it.
Profitable American companies, wherever they do business, help create healthy profits back home. By tearing down barriers and raising standards in other markets, we will see more American manufactured goods, agricultural products and services sold around the world.
Whatever trade strategy may replace TPP, those of us in Hong Kong understand that the United States cannot afford to rest on its laurels. Competition has become more intense – European, Japanese and Chinese firms are all competing for an increasingly large slice of trade and profits.
Are there any positive signs of development despite all the uncertainty?
The worries remain as to what kind of trade framework will replace TPP, but we’ve also seen a few welcome developments in the past months.
First, the United States and China last month came to agreement on a trade deal rather than starting a trade war. It was a step by U.S. President Trump and Chinese President Xi to address a trade imbalance worth US$350 billion.
The plan to accelerate trade and investment in agricultural products, energy and finance may only be a starting point for providing U.S. businesses greater access to China’s vast market, but it provides a major signal of an intention on both sides to engage.
It was also encouraging to hear that President Trump plans to attend three top Asia Pacific meetings in November – The ASEAN summit and the East Asia summit in the Philippines, as well as the Asia Pacific Economic Cooperation (APEC) summit in Vietnam.