President's Memo: Trade engagement in Asia a sensible must for American firms

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Ever since Trump became president and dumped the Trans-Pacific Partnership (TPP) trade agreement, U.S. companies operating overseas have been nervously watching and waiting for the potentially earth-shattering impact on businesses operating in Asia.

Asia today accounts for about sixty percent of the global economy, and American companies are heavily engaged across the region, in countries stretching from Australia to Japan, in a diverse set of sectors ranging from consumer goods to financial services. There are over 1,400 U.S. companies operating in Hong Kong alone.

At an April meeting of American Chambers of Commerce from across Asia (APCAC), the consensus was clear that the U.S. ought to remain actively engaged. Importantly, the view was also that a strategy of engagement in Asia is not at odds with Trump's America First initiative.

Profitable American companies, wherever they do business, help create healthy profits and jobs back home. By tearing down barriers and raising standards in other markets we will see more American made manufactured goods, agricultural products and services.

Whatever trade strategy may replace TPP, those of us in Hong Kong understand that the United States cannot afford to rest on its laurels in Asia. Competition here is becoming more intense - European, Japanese and Chinese firms are all now competing for an increasingly large slice of trade and profits.

The success of U.S. companies in Asia is also built on a strong multilateral base, namely the General Agreement on Tariffs and Trade (GATT) agreements and subsequent WTO rules.  Abandoning multilateral trade deals in favor of bilateral deals could have negative consequences. A slew of bilateral deals would take a long time to negotiate and add complexity to the business environment, particularly for small to medium sized companies who don't have the expertise and money for consultants that multinationals do. 

It was encouraging to hear that President Trump plans to attend three top Asia Pacific meetings in November - The U.S.-ASEAN summit and the East Asia summit in the Philippines, as well as the Asia Pacific Economic Cooperation (APEC) summit in Vietnam.

The importance of trade between the United States and Asia cannot be underestimated, and the constant flow of goods, ideas and people is testament to the emphasis American companies and their staff have placed on the region over the past few decades.

Tara Joseph
President
The American Chamber of Commerce in Hong Kong