ASEAN-Australia ties to deepen on various fronts

Outlook

In March, ASEAN states and Australia held a Special Summit, at which it was agreed to deepen trade links further between the countries. In Fiscal Year 2016-17, ASEAN states took 11.3% of Australia’s exports, or 42.3 billion Australian dollars (32.0 billion US dollars), just below the 12% of exports the previous year.

With efforts underway to form a new eleven-member Trans-Pacific Partnership and to agree the Regional Comprehensive Economic Partnership, ASEAN-Australia trade is set to grow. Yet other linkages will also matter: Canberra and the ASEAN states have agreed to deepen counterterrorism and maritime cooperation, among other initiatives.

Impacts

• Canberra will support South China Sea freedom of navigation exercises, but this could provoke further Australia-China frictions.
• Canberra will seek Washington’s further security cooperation; the Trump administration will help but also be guarded, seeking a ‘fair deal’.
• Despite seeking greater ASEAN trade, Canberra’s leading export markets are north-east Asian for now (China accounted for 29.6% in 2016-17).
• Canberra will have to navigate regulatory and human rights disparities in deepening ties with ASEAN states.
• Growth areas for Australian exports will include metals and energy products and travel- and education-related services.