State by State: ASEAN and New York Trade

Posted by Reading Time: 5 minutes

State-by-State1

By Chris Devonshire-Ellis, Dezan Shira & Associates

Trade between New York and ASEAN is a multi-billion dollar business and rapidly increasing, with the ASEAN nations of Indonesia, Malaysia, Philippines & Thailand particularly big markets. Singapore is the hub for shipping to these nations, and with the United States’ Free Trade Agreement with Singapore in place, now is a good time for New York-based companies to diversify from China and explore the ASEAN market.

In 2012, New York State exported US$4.11 billion in goods and services to ASEAN, which was 3 percent of the total exports from the state. US$2.4 billion of that amount were in goods, indicating ASEAN is a strong market for New York services, especially within the financial arena.

Exports to ASEAN support over 25,000 American jobs in New York. The top five goods exported to ASEAN are as follows:  

  • Machinery
  • Miscellaneous Manufacturing
  • Computers & Electronic Products
  • Chemicals
  • Primary Metal Manufacturing

We can examine New York’s trade status with the primary ASEAN nations as follows:

Indonesia

New York exported US$230.8 million of goods to Indonesia in 2014, up 16.9 percent from 2013. New York exports to Indonesia have risen by 350 percent since 2005. Indonesia receives 12 percent of U.S. waterborne agricultural exports that traveled through New York Port.

In terms of import, Indonesia supplied New York with US$1 billion in 2014, down 15.4 percent from 2013. Buyers are looking at still cheaper sourcing destinations in Asia, such as India and Vietnam.

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Malaysia

New York exported US$316.8 million of goods to Malaysia in 2014, up 4.6 percent from 2013. New York imported US$468.9 million in goods from Malaysia in 2014.

Should the TPP agreement be reached, Malaysia will be a primary market for New York exports of table and kitchen glassware, as well as exports of pumps and compressors which have previously faced tariff rates of up to 30 percent. These will drop to close to zero under the TPP. 

Philippines

New York State exported goods worth US$166.9 million to the Philippines in 2014, up 29 percent from 2013. New York imported US$349.6 million from the Philippines in 2014.

Singapore

New York exported goods and services worth US$1.107 billion to Singapore in 2014, ranking Singapore as the 16th largest market for exports from New York in 2014. This is a fast growing trend – exports from New York to Singapore have risen from US$498.5 million just a decade ago. 

The U.S. – Singapore FTA went into effect in 2004. Since then, New York exports of general purpose machinery to Singapore have increased over 500 percent to over US$185 million as of 2012. New York imported US$647.6 million from Singapore in 2014, up 21.8 percent from 2013. Singapore acts as a regional hub for ASEAN, meaning some of the goods both imported and exported with New York may have transshipped from or to other small ASEAN countries, such as Cambodia and Myanmar. It should be noted that the average per capita New York State income level is US$40,272 against Singapore’s US$55,182.

Thailand

New York State exported US$502 million of goods to Thailand in 2014, with a downward blip caused by the military coup. This situation in terms of trade can be expected to tick up sharply again this year. New York imported US$1.113 billion from Thailand in 2014.

Related-Reading-Icon-Asean Link State by State: China and New York State Trade
Summary

New York State enjoys a healthy trade relationship with ASEAN, with several of the nations within the top 20 trade partners for the state worldwide. However, this situation could be improved with a more coherent approach to dealing with ASEAN as a whole; at present, the component nations of ASEAN tend to be treated as separate entities. In reality, the ASEAN trade bloc unites them in terms of tariffs and provides Singapore as a one-stop shop for shipping, trade and other related financial services. 

Opportunities exist for New York financial services and related companies to use Singapore as an Asian hub, but better trade and commercial ties need to be built with ASEAN. Only Metro Manila in the Philippines is twinned with any New York State city (with Ramapo), while Chinese and Japanese cities dominate. This is a mistake. Asian city governments take great pride in establishing sister city links, and New York has been tardy in acknowledging this. Many of ASEAN’s largest cities, such as Bangkok, Jakarta, Kuala Lumpur and Singapore itself have populations in excess of 20 million, while Indonesia alone is a trillion dollar economy.

This oversight suggests that New York State-ASEAN trade links have considerable room for growth. New York State businesses looking to grow their markets in Asia would do well to break the mould and consider the ASEAN region as a primary destination for export development.

Further Support from Dezan Shira & Associates

Dezan Shira & Associates can service New York-based companies that are looking to further develop their operation in ASEAN. The firm can help companies establish a direct office in the country and can guide them through the affiliated tax, legal and HR issues that come with doing so. To arrange a free consultation, please contact our U.S. office at usa@dezshira.com.


About Us

Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email asean@dezshira.com or visit www.dezshira.com.

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