Bloomberg: “More than a century and a half after Millard Fillmore dispatched an emissary to Asia to transform commerce across the Pacific, a U.S. president again sees an historic opportunity to strengthen America’s role in the region.
Barack Obama sent his secretary of state, Hillary Clinton, to Asia for a record 86 days in his first term, including — for the first time — stops in all 10 members of the Association of Southeast Asian Nations. Obama himself became the first sitting commander-in-chief to visit Myanmar, a nation the International Monetary Fund says may be the next economic frontier in Asia.
As in the wake of U.S. Commodore Matthew Perry’s 1850s voyages to Japan, American companies are seeking greater opportunities, with General Electric Co. (GE) and Ford Motor Co. backing Obama’s plan for an 11-country Pacific trade deal that could bring in $108 billion a year. Instead of Perry’s gunships, what may propel Asian nations toward Obama’s vision is concern from Japan to Vietnam that China’s ascendance may pose a threat.
“The U.S. is serious about its commitment to Asia and sees Asia as the future in terms of economic growth in the 21st century,” said Simon Kahn, chairman of the American Chamber of Commerce in Singapore and Google Inc. (GOOG)’s chief Asia-Pacific marketing officer. “That has a very real impact in discussions with business counterparts in terms of thinking about long-term investments.”
Personal History
The connection is part personal for Obama, 51, who lived in Jakarta from 1967 to 1971. In his second year in office, the president returned to Indonesia’s capital, addressing an audience of about 6,000 at the University of Indonesia highlighting prospects for deeper economic ties, “because a rising middle class here means new markets for our goods, just as America is a market for yours.”
Less than two years after Obama’s visit, Boeing Co. (BA) confirmed a record 230-plane order valued at $22.4 billion at list prices from PT Lion Mentari Airlines, a budget carrier in Indonesia, the world’s fourth most-populous nation.
“If you look at global growth, obviously this region is where the action is,” Bill Ford, executive chairman of the second-biggest U.S. automaker, said in a response to questions while on a visit to Thailand, where he toured a $450 million plant that the Dearborn, Michigan-based company opened this year. The administration’s support for U.S. manufacturers has helped Ford expand its exports of the Explorer sport-utility vehicle to more than 90 nations, he said.
Growth Prospects
The IMF forecasts developing countries in Asia to grow 7.7 percent in 2017, almost triple the pace of advanced economies, increasing demand for everything from toothpaste and automobiles to missile systems as nations protect their newfound wealth.
Asian stocks also demonstrate the region’s lure, with the MSCI Asia Pacific Excluding Japan Index climbing 100 percent since Obama took office, a period when the MSCI World Index rose 56 percent. Price-to-earnings ratios present “no obstacle” to more gains, according to Nomura Holdings Inc. equity strategists led by Michael Kurtz in Hong Kong. Kurtz’s team targeted 530 for the MSCI Asia Pacific Excluding Japan Index in 2013 in a note dated Dec. 3, marking a 14 percent gain from current levels.
Obama’s trade strategy is built around the Trans-Pacific Partnership. Negotiators from 11 countries — Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, the U.S. and Vietnam — will meet in Singapore in early March for the 16th round of talks aimed at bringing down tariffs, strengthening patent protection and allowing greater access to government contracts.
Stepping Up
“There are significant risks to the U.S. of being marginalized in Asia if they do not step up to the trade plate,” said Deborah K. Elms, head of the Temasek Foundation Centre for Trade & Negotiations in Singapore. “They have to be able to push the TPP past the finish line.”
Japan, South Korea, Thailand and the Philippines are all considering joining the TPP talks — a move that, along with an entry by Indonesia and 11 mostly smaller nations, could bring the U.S. annual income of $108 billion a year, according to Asia-Pacific Trade, a website whose contributors include Peter A. Petri, a Brandeis University professor.
The U.S. aims to complete the TPP talks by the end of next year and have it take effect by 2015, Michael Froman, deputy national security adviser for international economic affairs, said in an interview.”
via Obama Eyes $108 Billion Annual Asia Prize Vying With China Trade – Bloomberg.
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