Preparing ourselves for the global economy

BABE'S EYE VIEW FROM WASHINGTON, D.C.

- AMBASSADOR B. ROMUALDEZ

With the tariff war launched by the United States vs. Canada, China, Mexico, and the European Union now in full swing, many countries, including ASEAN member-nations, are bracing themselves for any potential fallout from the situation that has been described as a "tit-for-tat" due to the retaliatory tariffs being imposed by the "warring" countries on a widening list of products.

According to analysts, the intensifying competition between the US and China could prove to be challenging for countries in Southeast Asia, with Thailand, Vietnam, and Malaysia being particularly "vulnerable" to the impact of increased tariffs. This is why it's become all the more important to have the Regional Comprehensive Economic Partnership—said to be the biggest regional trade agreement in the Asia-Pacific—since one of its aims is to lower (if not eliminate) tariffs on a wide range of goods and services and reduce trade barriers among member-nations that include all 10 members of the ASEAN, analysts said.

While some countries in Asia may not be directly affected, "the impact of rising tariffs and trade wars could cause major disruptions to supply chains, slow down trade and investment flows and significantly set back the growth of the global economy," Singapore Deputy Prime Minister Gan Kim Yong said during a recent global thought leadership event.

But "in spite of the risk of greater economic fragmentation, there is good reason to remain optimistic that Asia will remain a beacon of growth, opportunities, and prosperity," Gan asserted, pointing to the Asian economy's projected expansion to 60 percent of the world's GDP by 2030, with Southeast Asia also projected to become the fourth largest economy in the world by that time.