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To consolidate its emergence as a powerful trading bloc, ASEAN member states have been promoting special economic zones (SEZ) as a cornerstone for efforts to encourage more foreign investment.
SEZs – which include industrial parks, special export processing zones, technology parks, and innovation areas – gained increasing prominence after the establishment of the ASEAN Economic Community (AEC) in 2015, and more so now as a tool to attract US investors seeking to diversify their supply chains.
Total two-way trade between ASEAN and the US reached US$260 billion in 2018. The US is also ASEAN’s fourth largest trading partner.
The top export categories from ASEAN to the US are electrical machinery, machinery, textiles and garments, and footwear. Vietnam was the largest exporter to the US, amounting to US$49.2 billion in 2018, along with Malaysia (US$39.4 billion), Thailand (US$31.9 billion), Singapore (US$27 billion), and Indonesia (US$21 billion).
US investors looking to take advantage of SEZs in ASEAN should seek to develop a base understanding before assessing factors that may impact their business.
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