ASEAN: The guardrail that keeps us moving
People often ask me why I remain such a firm believer in ASEAN.
ASEAN, the Association of Southeast Asian Nations, is often praised for its size and demographics, with eleven countries and nearly 700 million people. However, the continuity and stability it provides is perhaps its most significant asset. In 1992, ASEAN committed to building a free trade area, and today, more than 98 percent of tariff lines traded among members carry zero duty, up from 69 percent in 2009.
Trade among ASEAN members has grown tenfold, from $82 billion in 1993 to $823 billion in 2024, while ASEAN's total trade has surged from $430 billion to $3.8 trillion, reaching $4.4 trillion in 2024. Additionally, air passenger traffic in Southeast Asia more than doubled to 510 million in the decade to 2019, and international arrivals to ASEAN grew at an annual rate of 8 percent, outpacing global growth of 5 percent, to 138 million.
These benefits have attracted foreign investors, who recognize the stability ASEAN offers amidst political volatility. ASEAN's commitments to tariff agreements, customs procedures, rules of origin, and services sectors are not renegotiated every election, providing a consistent framework for investors to rely on. By building guardrails both domestically and with neighboring countries, ASEAN creates a more predictable environment that eases investment risk.
While ASEAN's share of global trade has remained relatively stable as a percentage of the total, it remains limited, with only about a fifth of ASEAN's exports going to other ASEAN members. This stems from structural limitations, as ASEAN countries primarily trade components and commodities with one another, assembling finished goods for export beyond the region.
The Regional Comprehensive Economic Partnership (RCEP), which includes ASEAN and major economies like China, Japan, South Korea, Australia, and New Zealand, offers a broader market for ASEAN's final goods. By leveraging its membership in RCEP, ASEAN can expand its export markets and enhance its economic integration. To further this integration, ASEAN should extend its Digital Economy Framework Agreement (DEFA) to include RCEP members, as well as expand its open-skies agreements and QR payment links to cover all fifteen ASEAN nations.
By doing so, ASEAN can better withstand external pressures and create a more cohesive and resilient economic community.
Written by urgent.news from Philippine Star Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
