Abe’s outreach to South-East Asia

Abe pledges to promote free trade with Thailand while offering legal and political assistance to Cambodia.

Background

Japan is the third largest economy in the world by nominal GDP after America and China. It has the fourth largest purchasing power parity. It is also considered the world’s second largest developed economy. After the devastation of World War II, it achieved steady and significant growth in the second half of the 20th century. Much of its expansion was due to its highly successful automotive and consumer electronics industries.

In 2017, it was revealed that Japan has blown past industry and market expectations with its growth. According to the official numbers, its GDP expanded at an annualized rate of 4% in the April-to-June period. The industry had forecast a rise of just 2.5%. This was the sixth straight quarter of growth for the country. The robust growth in the economy was attributed to a rise in exports especially smartphones. The economy has also been boosted due to the investments made to the Tokyo 2020 Olympics.

Analysis

Prime Minister Shinzo Abe and his Thai counterpart Prayuth Chan-ocha on Monday confirmed their cooperation in promoting free trade, with the Southeast Asian country expressing its readiness to join the 11-nation Trans-Pacific Partnership that Japan has helped spearhead.

In a news briefing after their meeting in Tokyo, Abe said Japan hailed Thailand’s willingness to enter the agreement.

Japan has worked hard to conclude the TPP following the withdrawal of the United States last year under President Donald Trump and sought to expand the multilateral framework.

The parties to the trade deal — Australia, China, India, Japan, New Zealand and South Korea plus the 10 members of the Association of Southeast Asian Nations — are aiming for a broad agreement by the end of the year.

Abe told Prayuth that Japan will cooperate with Thailand to promote the Eastern Economic Corridor, a national project to develop a vast industrial area east of Bangkok, and train industrial personnel in the country

In response, Prayuth said, “I appreciate Prime Minister Abe’s push to encourage Japanese firms to invest in the Eastern Economic Corridor that is the centre of the Thai economy and would lead to the development of the Mekong region.” He also invited Abe to visit Thailand.

Abe expressed Tokyo’s willingness to help Bangkok assume the rotating chairmanship of the Association of Southeast Asian Nations next year. The two leaders exchanged views on a variety of regional challenges, including North Korea, the South China Sea and the Rohingya crisis in Myanmar, Abe added.

In a separate meeting the same day with Cambodian Prime Minister Hun Sen, Abe expressed hope for the development of Cambodia through democratic processes amid criticism from the international community over the Southeast Asian nation’s latest election results.

To that end, Abe said Japan will invite young politicians from various parties and senior officials of the national election board to Japan so that they can learn about the country’s electoral systems. Japan will also provide support to strengthen transparency and fairness in Cambodia’s legal process, Abe added.

Counterpoint

Due to China’s geographic proximity to South East Asia, Japan is promising assistance and funding for countries in the region to combat Beijing’s growing influence. In addition, Cambodia and Thailand are two of the few countries in South East Asia which are not actively involved in any maritime dispute with China.

In addition, Japan is looking to expand its own influence based on trade and development after the Trump administration’s largely protectionist policies. The Trans-Pacific Partnership would have represented a windfall in trade for Tokyo and PM Abe has done everything in his power to retain the signatories in the TPP.

Assessment

Our assessment is that Japan is securing its own free trade agreements and trading partners in the wake of a more protectionist and isolationist America. Tokyo has always traded in tandem with Washington’s lead but President Trump has changed Japan’s dependant trade policy. We believe that Japan will reach out to more countries in South East Asia to cement a robust maritime trade corridor in the South China Sea. We also feel that the trade corridor will a bulwark against excessive Chinese presence in the area.