As the Asia-Pacific Economic Cooperation & G20 summits closed last week, U.S. media have mostly focused on key bilateral deals struck between the U.S. and China, including a landmark climate change agreement. What’s gotten lost in the media coverage, however, is the annual East Asia Summit of 18 countries held last week in Myanmar.
This gathering is important to the U.S. for many reasons. The summit includes 10 member nations of the Association of Southeast Asian Nations (ASEAN) – Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. Together, these countries have a population of more than 625 million with an economy valued at $2.4 trillion.
Collectively, the ASEAN nations are America’s third-largest Asian trading partner, after China and Japan, and the largest destination of U.S. investment in Asia, according to Alex Feldman, president and CEO of the US-ASEAN Business Council.
U.S. businesses have long known about the strategic and market value of Southeast Asia; as of the end of 2012, the U.S. has invested more than $190 billion cumulatively in the 10 nations of ASEAN. That’s more than U.S. companies have invested in Brazil, Russia, India and China combined, Feldman wrote in an email in August.
By contrast, U.S. direct investment in China through 2012 has totaled only $51 billion, with an additional $48 billion going to Hong Kong, according to the latest figures provided by the East-West Center, a nonpartisan Hawaii-based think tank.
Feldman says that the ASEAN region is one of the best destinations in the world for U.S. business and could see U.S. investment accelerate after the December 31, 2015 formal launch of the ASEAN Economic Community, or AEC — in essence a single, integrated 10-nation common market in Southeast Asia with free movement of goods, services, investment, skilled labor, and freer flow of capital.
That’s all the more reason amidst the alphabet soup of summits and proposed trade deals that American business should pay more attention to progress coming out of Southeast Asia. The world may have been captured momentarily by the pageantry and photo ops out of Beijing’s stage-managed APEC summit or of the G20 meeting in Brisbane, but official Washington and more of America’s businesses must recognize that there’s much more to opportunity in Asia than in China alone.
With the midterm U.S. elections behind us, a revitalized White House and U.S. Senate now have the chance to show that Washington can work in a bipartisan manner in support of strengthening economic relations with Southeast Asia as part of an Asia-wide strategy that goes beyond a narrow China focus.
One step forward would be bipartisan Senate action that would give the U.S. president greater authority and ability to win approval of any future free trade deals.
As another step, Congress and Obama must remove or at least revise U.S. laws and regulations that make it increasingly challenging for U.S. small and medium-sized businesses and entrepreneurs based in Asia to succeed. One example is the need to reassess the Foreign Account Tax Compliance Act, or FATCA, a U.S. federal law that was passed in 2010. Intended in part to ensure U.S. citizens abroad and at home pay all taxes owed, the law has instead made some foreign financial firms less likely to serve U.S. citizens living in Southeast Asia and elsewhere abroad given new costs and reporting requirements.
During his recent visit to Asia, Obama reiterated and reaffirmed America’s commitment to the region.
A critical part of the need to re-focus foreign policy to the growth of the Asia-Pacific must include building on, not unintentionally undercutting, the success of U.S. businesses in Southeast Asia. With Obama back in Washington, he need not wait until the leadership of the Senate changes early next year.
Curtis S. Chin is a senior fellow at the Milken Institute and a managing director of advisory firm RiverPeak Group, LLC. He is a former U.S. ambassador to the Asian Development Bank.