How ASEAN plans to strengthen ties with Latin America

The Association of Southeast Asian Nations (ASEAN) is looking to strengthen ties with Latin American countries at a time of growing protectionism in the global economy.

As part of these efforts, the Secretary-General of ASEAN, Dr. Kao Kim Hourn, is attending the ministerial meeting of the Asia-Pacific Economic Cooperation (APEC), held in Peruvian capital Lima.

Along with Peru, Chile, Colombia and Mexico, which make up the Pacific Alliance, ASEAN is also engaged in reinforcing ties with other nations.

"Brazil is the first country in South America to set up a separate mission to ASEAN, separate from the embassy, for example. So obviously there is growing momentum on both sides," Hourn tells BNamericas in this interview, which touches on a wide range of topics, including global trade, protectionism, China and the energy transition.

BNamericas: What can you tell us about your visit to Lima this week?

Hourn: We've been working with a number of countries in Latin America through various levels of engagement. The reason why I'm here in Lima, is because Peru is the host of this year's APEC series of meetings, including the latest meetings this week. 

Peru was the first country in Latin America, in South America, to accredit its ambassador to ASEAN back in 2009, and in 2019 it signed the Treaty of Amity and Cooperation in Southeast Asia [TAC] and, of course, became a high contracting party to the TAC.

BNamericas: What are the main effects that you expect from the new term of US president-elect Donald Trump on the global business and political environment?

Hourn: I think at the moment it's a little bit early to say because he won't take office until January. But we had the experience of working with Trump as president in his first administration. One time he attended ASEAN’s summits: the ASEAN-US Summit and the East Asia Summit.

Now, of course, we’re watching very closely the selection of who will be serving in the cabinet.

ASEAN and the United States are long-standing partners. In 2027, we will celebrate the 50th anniversary of the dialogue between ASEAN and the United States. So, we hope that we will continue to work together on a wide range of areas of cooperation.

I also want to say that back in 2022, ASEAN and the United States commemorated the 45th anniversary. Also in November 2022, the ASEAN-US partnership was elevated to the highest level, to a comprehensive strategic partnership. So here we're talking about a lot of understanding, a lot of trust, a lot of working relationship.

Of course, we understand that the administration may be changing priorities, shifting priorities, but that remains to be seen. We hope we can maintain the momentum of cooperation, relations and partnership.

What I'm saying here is that the United States has been one of the key partners supporting ASEAN, particularly looking at foreign investment. Last year, the US was the number one source of FDI to ASEAN. In terms of trade, the US was number two. So, it's at the very, very top in terms of trade and investment. 

We work with the US in all areas of cooperation. So, I hope that there will be a positive impact. But of course, it remains to be seen because the geopolitical and economic landscape may be shifting. We don't know how much, how drastically or how fast. It remains to be seen.

BNamericas: Today there’s a trend of increased trade protectionism. How might this impact the economic development of different regions in the world, and what mechanisms or strategies could be used to reverse this trend?

Hourn: ASEAN is a strong advocate for multilateralism, an open trading system.

We believe that trade is a win-win cooperation. We hope this will continue to be the case. That's why ASEAN has been moving forward of having not just peaceful bilateral relations with key partners, but also the establishment of the regional comprehensive economic partnership. The 15 countries that comprise 30% of the world's population and 30% of the world's GDP, at the same time supporting the WTO. 

I think in the US you see that this has been the case, the growing protectionism, but it's something that we hope there will be a lot of discussions about, a lot of negotiations. It's all about how we can work together.

There are a lot of uncertainties at the moment, but what's important is that we should, in the case of ASEAN, continue to stick to the position of open engagement.

I think the way ASEAN has been working is that we’re open, we’re transparent and inclusive. That's the ingredient for the strengthened trust between ASEAN and our partners, including the United States.

So, we hope with the US that we will continue to strengthen that relationship, there are many benefits from working together.

BNamericas: How could potential protectionist measures by the United States against Chinese products affect other regions, with China potentially diverting manufactured products to other countries?

Hourn: China is a major economic player globally. So, it's natural that China is looking for different markets.

For us too in ASEAN we continue to work with our partners in the current markets, but at the same time looking at new markets, new areas of growth, for example, the digital economy is a new area, the blue economy, the green economy. This is something that we will have to work on very hard and develop. But of course, there's a lot of economic competition.

We heard that the United States may be racing to increase [import] tariffs, whether by 10%, 20% or 60%. This is something that will have serious implications, not on a particular country, but on trade blocs.

We hope that trade won't contract, but rather we need strong trade blocks and strong multilateralism in the case of the WTO, for example. All of us have so much to gain from an open trading system.

But again, I don't want to put the cart before the horse, we need to see how these things will evolve eventually.

BNamericas: The energy transition issue has gained momentum in recent years. Do you believe it will continue to gain increasing interest, or are there risks of a reversal of this trend?

Hourn: There are many factors that will be involved when we talk about the renewable energy sector, when we talk about green finance.

We see investors continue to put a lot of investment into green finance, whether you're talking about investment in EVs, for example, or talking about the change in behavior of consumers going for more EVs. 

So, there's a lot of things that will change. And of course, how it will change through the consumption of energy, that will be a pattern, that will be a shift.

Of course, in the transition, there will be a lot of costs. There's much need for investment. The weather [events] have become more severe, more deadly too and more frequent. So, these are affecting all of us.

How should we respond? At the national level, of course, at the regional and global level, and even at the individual level, we have to do something about it.

Let's come back to both regions here, ASEAN, Southeast Asia, and South America. How are we able to sustain the current energy transition to a new renewable energy sector? All of us have a commitment. So for us in ASEAN, we now have about 33% renewable energy and there's strong interest. That's why in Southeast Asia we have seen a lot of investment coming in for EV production, and later EV hubs in ASEAN, whether in Thailand, Malaysia, Indonesia or in Vietnam, for example.

The transition means it will take some time to move forward, but we have to start from somewhere. The sooner we get on board, the better for the global community, for all of us. I hope that both regions will remain committed.

BNamericas: Several countries in Latin America are considered key for the development of critical minerals. How could Asian partners and companies tap into this potential?

Hourn: We have to work from a position of strength, meaning that all of us would have to be able to benefit from the current development.

But I must say several things here. Number one, we all have to subscribe to sustainability. I think sustainability is the key in the long term for every country, particularly for our two regions here, of course, for the global community.

Second, I think it comes back to the energy sector. We cannot continue the way we have been doing it for decades. 

Energy demand will grow, it will continue to grow with the growth of the population, with the growth of the economy. How are we able to ensure that the current long-term energy need will be sustainable so it won't come back to affect us all because of the impact of climate change.

The other issue is how we can use technology, AI, the digital transformation, all of this to support what we do. And how do we embrace such technology? We know that the big countries really have the influence and control of the new technologies, including AI.

And that's something that we have to look at, how we distribute all of that. It shouldn't be confined to only a few countries that have the resources to do it.