Asean secretary-general Dr. Kao Kim Hourn speaks at the 12th Asean Finance Ministers and Central Bank Governors Meeting wednesday , April 9, 2025. — RAJA FAISAL HISHAN/The Star.
KUALA LUMPUR: The US tariff measures against Asean countries come as a “wake-up call,” Asean secretary-general Dr. Kao Kim Hourn says as he called on the regional bloc to deepen ties and tap into its strength of a population of over 600 million people.
“Even as our tireless efforts over the decades have anchored Asean as a premier destination for global investment, a vital trade hub, a critical node in global supply chains, and a dynamic centre of growth, the ground beneath us is shifting,” he said during his keynote address at the Asean Investment Conference on Wednesday(April 9).
"The imposition of sweeping tariffs on Asean exports is certainly a wake-up call and lays bare the fragility of the open trading system that has sustained our prosperity over decades.
"Our economic fortune, once buoyed by globalisation, can no longer be taken for granted. Without urgent and collective action to accelerate intra-Asean economic integration and diversify our markets and partnerships, we risk ceding our place in a fractured and fast-evolving global economy.
"To remain relevant and resilient in a world where economic chaos is fast becoming the new normal, we must act—boldly, decisively, and together – to reaffirm Asean’s commitment to a stable, predictable, and business-friendly environment,” he added.
He said the US tariff measure, which went as high as 49% has sent shockwaves through the global trading system and struck at the very foundation of open trade and investment that has underpinned Asean’s growth and prosperity for decades.
We have always understood that interdependence brings vulnerability. But rarely have we seen such stark exposure—so sudden, so destabilising, and so real,” he added.
He said the region is now navigating an era of profound economic disruption, fragmentation, and volatility. On that note, he said Asean must hold firm to its founding ethos, which is openness, resilience, and unity.
We need to deepen our regional bonds, tap into the inherent strength of our 678 million people, unlock the full breadth of our shared potential, and diversify our markets and partners,” he said.
He said enhancing connectivity for an Integrated Asean Economic Community (AEC) was key.
“Asean Connectivity is multi-dimensional, with physical connectivity forming its backbone. Through the Master Plan on Asean Connectivity (MPAC) 2025, we have prioritised 19 strategic infrastructure projects across transport, energy, and digital sectors—laying the foundation for our businesses to go regional and global,” he said.
But hardware alone is not enough. Coherent institutional and regulatory connectivity—enabling the free flow of goods, services, capital, and the facilitative movement of talent— is equally vital. Together, these elements shape the engine of our economic development, and are carried forward through three key strategies.”.
“Asean’s vision to become a global supply chain hub is built on our
transformation into a single market and production base,” he added.
He added that Asean had over the decades actively eliminated tariffs and non-tariff measures by fostering a harmonised trade and investment regime through the AseanTrade in Goods Agreement (ATIGA), the Asean Trade in Services Agreement (ATISA), and the Asean Comprehensive Investment Agreement (ACIA).
These agreements have lowered cross-border transaction costs,
enhanced production factor mobility, and strengthened resilience by leveraging on complementarities between economies.
“Today, Asean stands as the world's third- largest trading bloc with total goods trade reaching US$3.8 trillion in 2024, and ranks among the top recipients of foreign direct investment globally—second only to the US and first among developing economies—attracting US$234bil in 2023,” he said.
He added that the Global Asean Strategy is essential for deepening trade and investment ties with the world economy and Asean would have to uprgrade existing Free Trade Agreements (FTA) with its trading partners.
“Asean has successfully established FTAs with major Dialogue Partners, including China, Japan, Korea, India, Australia, New Zealand, and Hong Kong (China), alongside the Regional Comprehensive Economic Partnership Agreement (RCEP),” he said.
To keep pace with evolving modern business dynamics, we remain committed to upgrading existing FTAs to ensure they remain fit-for-purpose and relevant. The first upgraded FTA, the ASEAN-Australia-New Zealand FTA (AANZFTA), will enter into force on April 21, 2025.”
Additionally, Asean is working toward signing the upgraded Asean-China FTA 3.0 (ACFTA) and finalising the Review of the Asean-India Trade in Goods Agreement later this year,” he added,
He said the digital economy, too, was a catalyst for growth.
