CHOICES
A publication of AAEA
The Association of Southeast Asian Nations (ASEAN) is an economic and political union comprising ten member countries: Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. These countries have a combined total population of almost 700 million and a combined GDP of $3.2 trillion (Council on Foreign Relations, 2023). ASEAN has also played an important role in Asian economic integration—creating free trade agreements with Australia, New Zealand, China, India, Japan, South Korea, and Hong Kong—and is a member of the Regional Comprehensive Economic Partnership (RCEP), which includes all the above countries except India. ASEAN countries also have their own individual free trade agreements beyond the Asian region. For instance, Vietnam and the Philippines have agreements with the United Kingdom and the EU, respectively, and four ASEAN countries (Brunei Darussalam, Malaysia, Singapore, and Vietnam) are members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The United States does not have a have free trade agreements with any ASEAN countries other than Singapore (Cimino-Isaacs, 2023). These widespread agreements present challenges for U.S. agricultural exports as ASEAN countries deepen trade with competing countries.
ASEAN countries are important to U.S. agricultural trade. (Lee and Jones, 2023). U.S. agricultural exports to ASEAN reached $15.8 billion in 2022 (includes related products like forestry and seafood products), placing ASEAN among the top five destinations for U.S. agricultural exports. In 2023, U.S. agricultural export sales to ASEAN were comparable to the EU and Japan and exceeded South Korea (See Figure 1). In fact, three ASEAN countries are among the top 15 destinations for U.S. agricultural exports: the Philippines (9th largest destination in in 2023), Vietnam (10th), and Indonesia (12th). ASEAN countries account for a major share of U.S. exports of soybeans, cotton, wheat, soybean meal, dairy products, animal feeds, distiller grains, food preparations, fresh fruits, tree nuts, and forest products. In 2023, Indonesia ranked 5th for soybeans, thePhilippines ranked 2nd for wheat, and Vietnam ranked 3rd and 7th for cotton and forest products, respectively (U.S. Department of Agriculture, 2024).
Although agricultural tariffs are relatively low in ASEAN when compared to other countries, the lack of significant trade agreements means that the United States faces some market access and regulatory obstacles in the region. U.S. agricultural exports are subject to tariffs that range, on average, from around 3% in Malaysia to almost 30% in Thailand. Products such as beverages, tobacco, dairy, fruits and nuts, and sugar products are subjected to effective tariff rates exceeding 10%. Additionally, the proliferation of nontariff measures (NTMs) has a substantial impact on U.S. agricultural exports to ASEAN. These NTMs range from import licensing mandates, health and safety regulations, and technical standards to sanitary and phytosanitary measures, including the complexity of bureaucratic procedures (Hossen, 2023).
This Choices theme covers issues affecting U.S. agricultural trade with ASEAN, with a focus on export sectors important to the U.S. agricultural and forest economy. The five articles in this theme describe ASEAN agricultural markets and investigate the potential for U.S. increased agricultural exports to the region. Smith and Khanal provide a detailed summary of production and consumption of agricultural commodities in ASEAN. The authors describe opportunities for U.S. agricultural trade expansion in the region considering increased population, differentiated consumer demands, and ASEAN’s expanding production-consumption deficit for key agricultural products. Hudson and Ghose explore trends in U.S. cotton exports to ASEAN and highlight the factors that offer both opportunities and challenges for U.S. cotton exports to the region. Their analysis reveals that top export destinations for U.S. cotton beyond China include Vietnam and Indonesia, and that recent expansion of U.S. cotton exports to ASEAN are largely driven by yarn exports from ASEAN countries to China.
Next, de Menezes and Countryman describe the trade and policy landscape of ASEAN meat imports and employ a computable general equilibrium modeling framework to investigate the potential effects of tariff eliminations on meat trade between the U.S. and ASEAN. Results provide insights into how tariff elimination could increase U.S. meat exports to the region. Muhammad, Stewart, and Hossen focus on U.S. timber exports to Vietnam given its major import potential. They describe the U.S. investigation of Vietnam’s illegal timber trade, which could have restricted U.S. finished wood product imports from Vietnam, indirectly affecting demand for U.S. timber exports. The analysis gives perspective on the growth potential for U.S. timber in Vietnam. Finally, Story, Gerlt, and Countryman describe ASEAN import markets for soybean and soy products. While ASEAN soybean meal import demand has been increasing since the early 2000s and has largely been filled by Argentina and Brazil, the article explores the potential for expanded U.S. soy product exports to the region. The discussion provides context for how the U.S. may become a key soy product exporter to ASEAN with increased market access.
