US can't force Asian countries into its trade camp

Trump’s deals with Malaysia and Cambodia will not turn them into economic satellites in a cold war of commerce.

- Alan Beattie

Last week’s trade truce between US President Donald Trump and his Chinese counterpart Xi Jinping has deferred all-out trade conflict between the world’s two great geo-economic superpowers.

But the rivalry remains in lower-profile theatres of combat, including the struggle between Washington and Beijing to pull other countries into their economic orbits.

A few days before the summit, the US apparently gained some valuable Southeast Asian territory in that particular ground war in the form of deals with Cambodia and Malaysia.

The agreements — unusually detailed by Mr Trump’s standards - were the first of a planned string of deals with Asean nations that not only gave American exports highly preferential treatment but also appeared to recruit the countries firmly into the US geo-economic gang.

READING THE FINE PRINT

On the face of it, this is evidence of anewly politicised trading system, countries forced to choose between the US and China. In reality, I strongly suspect governments will continue to chart a course between the two, which will depend on real-world incentives like access to rare earths or export markets rather than signing pieces of paper.

On closer inspection, the Malaysia deal looks more like formalised coercion than a grownup trade agreement.

It contains a sweeping commitment that, if the US introduces any import restriction it considers necessary for its national or economic security (an exceedingly elastic concept), Malaysia will “adopt or maintain a measure with equivalent restrictive effect... or agree to a timeline for implementation that is acceptable to both parties”.