BERNAMApic
KUALA LUMPUR: The upgraded trade in goods agreement, reciprocal tariff deals with the United States and renewed commitments by dialogue partners such as Australia to pour millions of ringgit in investments into the region and New Zealand to enhance economic partnership were hallmarks of the 47th Asean Summit and Related Summits which ended here Tuesday (Oct 28).
Asean Chair and Prime Minister Datuk Seri Anwar Ibrahim said that besides this, fresh momentum was injected into the 15-nation Regional Comprehensive Economic Partnership (RCEP) from its summit on Monday (Oct 27) after a lull of five years, bolstering the world’s largest free trade area.
Anwar’s consistent message throughout the summits was that expanded trade would deepen economic integration and strengthen the region’s competitiveness and inclusivity, which would ultimately support Asean’s goal of becoming the world’s fourth largest free trade area.
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For Asean, which now has an expanded membership of 11 with the inclusion of Timor-Leste, the message is abundantly clear: to renew integration, expand trade and dismantle non-trade barriers to advance its free trade area.
Deeper integration is an imperative component towards building an unshakeable cornerstone for the South-East Asian economy which is now reeling from increased costs from the "Liberation Day” tariffs.
Economic gains from this resolve towards integration must be consistently accompanied by political will if Asean is to emerge as an effective regional economic grouping.
More than this, initiatives such as the Asean Digital Economy Framework Agreement (DEFA) to boost digital trade are vital to empower Asean’s more than 70 million micro, small and medium enterprises (MSMEs).
Increased region-wide online transactions will unleash an explosion of digital business and elevate these firms to becoming mid-sized and larger companies.
As for the Asean Trade in Goods Agreement (Atiga), the pact will include more goods for free trade and expand their regional market comprising a consumer base in excess of 680 million people.
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The signing of an expanded Asean-China Free Trade Agreement (ACFTA) followed by the grouping’s feverish discussions to conclude trade expanding agreements with India by next year are undeniably steps in the right direction, given that they are populous markets and substantial trading partners of Asean.
The reciprocal tariff agreements signed by the United States with Malaysia, Vietnam, Thailand and Cambodia individually ensured tariffs would remain unchanged but included greater commitments for two-way trade and investments and opened up more sectors for economic cooperation.
Malaysia also signed a comprehensive strategic partnership agreement to elevate trade and investment linkages with the United States.
Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Aziz dismissed criticism that these pacts would affect Asean sovereignty because of excessive concessions granted to Washington, saying Malaysia stands to gain in exports and investments.
Citing Malaysia’s case, he said some 1,711 product lines to America will enjoy tariffs lower than 19% including palm oil, rubber, cocoa, pharmaceutical components and aerospace equipment, with these exports collectively amounting to about US$5.2bil (RM21.84bil) or about 12% of total exports.
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In the agreement signed with US President Donald Trump, Malaysia would be open to US investments or imports of critical rare earth minerals while Malaysia would continue to export semiconductors to the United States without fear of sectoral tariffs as long as the agreements are adhered to.
Trump has promised unprecedented market access for these countries.
While this took place at the Kuala Lumpur Convention Centre, US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng were engaged in intense trade talks a short distance away in Malaysia’s tallest skyscraper, Merdeka 118, in efforts to reach a trade agreement.
Much to everyone’s relief, especially Asean countries whose economies are intrinsically intertwined to the markets of both economic superpowers, Washington and Beijing reached a framework agreement averting a 157% tariff on Chinese goods and a trade war in the process.
To take this further, Asean leaders expect that Trump and China’s President Xi Jinping will meet face-to-face in Gyeongju in South Korea at the Asia-Pacific Economic Cooperation (Apec) Leaders’ Summit this week to soothe trade tensions.
It was also encouraging to note Trump held talks while here with Brazilian President Luiz Inacio Lula da Silva and they agreed to start discussions to tackle tariffs immediately, which effectively put an end to the brewing animosity between them.
Elsewhere, Australian Prime Minister Anthony Albanese affirmed Canberra’s commitment to an A$20bil (RM55.2bil) investment pipeline across South-East Asia to deepen cooperation with Asean.
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South Africa, invited to the Asean Summit personally by Anwar, reaffirmed its commitment to deepen economic cooperation with Malaysia on palm oil while dialogue partner Canada is looking to conclude a Comprehensive Free Trade Agreement with ASEAN (ACAFTA) by next year.
Meanwhile, Malaysia and New Zealand aim to conclude the review of the Malaysia-New Zealand Free Trade Agreement (MNZFTA) by the end of this year and to strengthen cooperation in the halal sector, particularly to enhance the export of halal meat products to Malaysia following the exchange of the upgraded Halal Implementing Arrangement (HIA) with Putrajaya on Tuesday.
Another major gathering convened here was that of the RCEP, regarded as the largest free trade grouping in the world.
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Besides the Asean 11, China, Japan, South Korea, Australia and New Zealand renewed their commitment to uphold an open, inclusive and rules-based multilateral trading against a backdrop of uncertainty in global trade.
As the baton of chairmanship is passed to the Philippines, Malaysia can hold its head high for its exemplary astute diplomacy in further promoting Asean as an inclusive, reliable and competitive partner able to share its propensity for prosperity with both mature and developing economies alike.
Ths was evidenced by the numerous agreements, deals, trade expansionary initiatives and renewed commitment to open regionalism which marked the summit. – Bernama
