Be proactive, offer trade deals to Trump now

 

From Ong Kian Ming

At the time of writing, Malaysia and the rest of Southeast Asia have not yet been adversely affected by policies announced under the second Trump administration. Next week, on April 2, a round of “reciprocal tariffs” will be announced and put in place.

This will likely have a more direct and negative impact on Asean members, especially countries with greater exposure to the US market, namely Vietnam, Thailand, Malaysia and Cambodia. Singapore has an existing free trade agreement (FTA) with the US.

Rather than taking a more reactionary wait-and-see approach towards engaging Trump 2.0, Malaysia and Asean should take a more proactive approach in putting possible “deals” on the table for the consideration of President Donald Trump, who sees himself as the ultimate dealmaker.

Since Prime Minister Anwar Ibrahim has already invited Russian President Vladimir Putin to come to Malaysia for the year-end Asean summit, why not offer to host a Trump-Putin summit in Kuala Lumpur at the same time?

Trump is no stranger to having high-profile summits in Southeast Asia. He met North Korean President Kim Jong-Un in Singapore in June 2018 and later in Hanoi in February 2019.

While there is a possibility Trump may want to meet Putin earlier in the year to witness some sort of peace deal between Russia and Ukraine, there is no harm in quietly putting this offer on the table to gain some positive attention in the corridors of the White House.

At the same time, it would be useful for Malaysia to signal our intention to invest in and buy more from the US.

Vietnam, the country with the third-largest trade surplus with the US, has already sent its trade minister Nguyễn Hồng Diên to meet US trade representative Jamieson L Greer earlier this month. A number of agreements were signed during this visit, including commitments to buy more liquefied natural gas from the US.

Malaysia can highlight its existing investments in the US through government-linked investment companies (GLICs) such as Khazanah Nasional Bhd and EPF, including in the property and technology sectors, and also announce new investment plans.

Petronas and other Malaysian oil and gas (O&G) players, including Yinson Holdings Bhd and Dialog Group Bhd, may also consider a coordinated approach to investing in the fragmented fracking and O&G logistics sector in the US.

A business delegation to Washington DC, led by investment, trade and industry minister Tengku Zafrul Aziz, together with heavy-hitters from our GLICs and GLCs, would be a strong signal that Malaysia is ready to do business with the US government and companies.

This would also be a good opportunity to gather other Malaysian companies with investments in and exposure to the US, both small and large, including electrical and electronics players from Penang such as Greatech Technology Bhd and ViTrox Technologies Sdn Bhd, and fast-moving consumer goods companies such as Mamee-Double Decker Sdn Bhd to be part of this delegation.

The recent announcement that Malaysia Aviation Group (MAG) is buying 30 new Boeing planes by 2030 should also form part of the narrative that Malaysia is doing business with the US in a way that benefits US companies, with positive spillover effects on the local industry.

Each Asean country is adopting its own hedging strategies vis-à-vis Trump 2.0 and rightly so because of each country’s unique trading, investment and political relationship with the US. But there are certain value-propositions Asean can put on the table that Malaysia can facilitate as this year’s Asean chair.

For example, Asean can propose to start negotiating for an Asean-US FTA to address the areas of “unfairness” perceived by the Trump administration, which is the underlying basis of the “reciprocal” tariff approach currently being adopted. This may be a good way for us to put Asean in Trump’s good books, at least for now.

Asean can also sign agreements for partnerships in areas such as the supply of critical minerals and development of small nuclear reactors for industrial use, just to name a few.

Some countries already have existing agreements with the US, but these can be enhanced and packaged to be put forth as an Asean value proposition for the US.

Some of these ideas may be impractical, or may not obtain the necessary consensus within Asean. But it is important for Malaysia to think through different strategies and put different options on the table so that we can take a more proactive approach towards engaging with Trump 2.0. - FMT

Ong Kian Ming is a former Bangi MP and was deputy minister for the then international trade and industry ministry.

The views expressed are those of the writer and do not necessarily reflect those of MMKtT.