Conference discusses Asian trade relations

David Anderson

In this era of economic globalization, Minnesota companies are increasing their presence around the world, particularly in Southeast Asia.
As an example, George Yeo, Singapore’s minister of trade and industry, and other local officials celebrated a March 3 opening of a new 3M manufacturing plant in the city-state.
“For us it’s just another way to keep our global fabric all stitched together,” said Ted Tarsa, development manager for the Minnesota-based 3M Co.
Yeo and Association of Southeast Asian Nations trade officials spoke Wednesday about trade and investment opportunities at a downtown Minneapolis conference.
The association — which includes Indonesia, Brunei, Malaysia, Vietnam, the Philippines, Laos, Singapore, Thailand, Cambodia and Myanmar — is the world’s fourth-largest trade market with 500 million people and a combined gross domestic product of $834 billion. The area is also beset with political conflicts and poverty.
Minnesota is located within one of three regions targeted this year by the U.S.-ASEAN Business Council. New York City and Silicon Valley are other hot spots.
Minnesota exports to ASEAN exceeded $1.3 billion in 1997, and U.S. investments in the area nearly quadrupled in the last decade, to $42 billion in 1998.
Allan Petersen, head of the Minnesota Trade Office, said the conference was intended to bolster economic relations between Minnesota and ASEAN.
“We wanted to expose our exporters to these people, their economies,” he said.
The strengths of the current Southeast Asian economy are market confidence, low inflation and interest rates, improved infrastructures and a growing domestic demand, said Rodolfo Severino, ASEAN secretary general.
However, recent anti-globalization protests in Seattle and around the world on May Day raised concerns about Western companies’ alleged exploitation of workers and children in Southeast Asia.
Yeo, who denied child labor abuses in ASEAN nations, refuted arguments raised by globalization opponents.
“International trade is the best welfare that you can wish for poor people in many Third World countries,” he said. “My concern is many of those who advocate a link between trade and labor in fact have a protectionist motivation behind them.”
Corporate concerns
Minnesota business representatives at Wednesday’s conference expressed interest in ASEAN agricultural and energy markets, but raised concerns about intellectual property theft and the advancement of technology in Southeast Asia.
“We think that as these countries move more toward Internet technology they will be very interested in working with us … to help speed up the flow of goods,” said Robert Goonin of Logistical Software, a Minnesota-based Internet supply chain that is involved in trade with Indonesia and Malaysia.
The 3M Co. supplies industrial customers in Southeast Asia with products they need for their own products, Tarsa said.
“Whatever commonalities that help foster the free flow of commerce is to everybody’s advantage,” he said.
A recovering region
Western companies started to lose interest in Southeast Asia after economic crisis hit the booming region in 1997. Asian Development Bank statistics from 1998 indicate negative GPDs for four ASEAN countries.
This year’s forecasted growth statistics are more optimistic.
“I think that ASEAN is now on the road to recovery, despite the predictions of many at the height of the financial crisis that the recovery would take a long time,” Severino said.
Astrid Budhyagung, a Carlson School of Management graduate from Indonesia, said investing in Indonesia would still be risky because of the local economy’s instability.
The conference was sponsored by the trade office, James J. Hill Group and MIC, a nonprofit organization with ties to the University through interaction with international students.
“Southeast Asia is a growing area for trade in the U.S. in general,” said MIC coordinator Elaine Garbe.
“It’s important for Minnesota to get involved. There (is) a lot of potential for growth … trading, and establishing relations between the area and Minnesota.”

David Anderson covers University communities and welcomes comments at [email protected]