The ASEAN Trio by Harun Rashid May 10, 2002

Asean Is Singing A New Song, Soon To Become Familiar

Malaysia has bargained for an extension until the end of 2004 before lowering the high duties (100-300%) that protect its car industry. Recently Malaysia hinted it might renege on the agreed extension, complaining that its Proton car could not compete. Thailand is the major beneficiary of lowered auto tariffs.
Now Thailand has introduced a new bargaining chip, the threat of a new trans-peninsular canal near the Burmese border. The economic consequences are potentially enormous to both Malaysia and Singapore to the south, whose ports would be isolated by this short cut to the East. It forces Malaysia, most comfortable in truculence, into a more tractable posture.

Singapore and Malaysia, presently squabbling over the opening of the Causeway, must now cooperate to forestall the Thailand canal. The ASEAN Trio is sure to be a popular group as they seek to find the right note to achieve a lasting harmony.

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