Asean must double down on economic integration to withstand external pressures: Vivian Balakrishnan

Straits Times

11-07-2025

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Foreign Minister Vivian Balakrishnan said Asean's response to recent developments must be to press ahead with internal reforms and strengthen ties with external partners.
KUALA LUMPUR – Asean must double down on economic integration so that it can better withstand growing global headwinds, including rising protectionism and geopolitical uncertainty, said Singapore's Foreign Minister Vivian Balakrishnan on July 11.
Speaking to Singapore media after the 58th Asean Foreign Ministers' Meeting in Kuala Lumpur, Dr Balakrishnan said the grouping's response to recent developments, including new tariff announcements from the United States, must be to press ahead with internal reforms and strengthen ties with external partners.
'Remember, our overall vision ultimately is to make Asean a single production zone, a single investment zone. And that means bringing down barriers, not just tariff barriers but non-tariff barriers as well,' he said.
Dr Balakrishnan noted that the overall tone of the week-long meetings that he had with Asean as well as its key partners was 'sober', shaped by multiple crises worldwide.
He pointed to the wars going on in Europe and the Middle East, and highlighted how the United States tariff announcements had occurred in 'rapid fire'.
US President Donald Trump had from July 8 started announcing levies of between 25 per cent and 40 per cent on eight of the 10 Asean nations, which are slated to kick into effect in August.
Singapore and Vietnam, however, have yet to receive any formal notification from the White House.
Dr Balakrishnan stressed that in talks with the US, he had always underlined that trade is strategic to Asean, and the flow of trade and investments is a key strategic focus for all governments in the region.
In terms of how the grouping is responding to what is happening to global trade as a result of the US tariffs, Dr Balakrishnan said that the Asean ministers have decided that the grouping will have to coordinate both foreign affairs and trade and economic development far more closely at the Asean level.
He said Asean will need to adjust how it operates, including how meetings are structured, to ensure that its foreign policy and economic agendas are better aligned.
But the most effective way the region can respond is to double down on its own integration, stressed Dr Balakrishnan, as that is under Asean's control.
He gave examples of how the grouping must make sure that it removes every tariff and non-tariff barrier, and optimises its competitive position .
'That's a path of no regret. And I would say the urgency and the salience of doing it now is so much more obvious,' he said.
Dr Balakrishnan also touched on recent developments in cross-border infrastructure, noting that projects such as the
Johor-Singapore Special Economic Zone and the upcoming
Rapid Transit System link between Malaysia and Singapore could serve as models for wider regional cooperation.
'There are complementary strengths of both Johor and Singapore, and to the extent that we can bring these strengths together, we make ourselves more competitive,' he said.
He added that people 'beyond' the two areas are observing the special economic zone project with interest.
The minister added that the region is also exploring how trilateral cooperation between Singapore, Malaysia and Indonesia could be scaled up, in line with the longstanding ''Sijori' concept – a reference to Singapore, Johor and the Riau Islands.
The Sijori was established in 1994 between the three countries Indonesia, Malaysia and Singapore to bolster economic links between them.
'We are also now looking for opportunities in which the three countries, Indonesia, Singapore and Malaysia, can do more in a synergistic and complementary way,' he said.
Singapore is pushing for greater connectivity within Asean in both figurative and literal terms, said Dr Balakrishnan. He cited the
Asean Power Grid , which seeks to connect the region's electricity networks and support the transition to sustainable energy.
The project has attracted strong interest from Asean's external partners, including those with experience in clean energy and infrastructure, he added.
Other ongoing initiatives include the Asean Digital Economy Framework Agreement, which aims to enable seamless digital transactions, data flows and e-payments across borders.
The agreement was introduced in 2023 to boost the growth of digital trade and services in the region. Studies suggest it could double the projected value of Asean's digital economy from US$1 trillion (S$1.3 trillion) to US$2 trillion by 2030.
But digital expansion also brings risks, and Dr Balakrishnan acknowledged how scams have become a problem, noting that people as far away as the US and Europe have fallen prey to some of them.
Some of these operations originate from within Asean and there is a collective commitment by the grouping to try to root out these activities and deal with the criminal syndicates behind them.
Dr Balakrishnan also highlighted efforts to expand Asean's network of external economic ties, pointing out that free trade agreements with Australia and New Zealand have already been upgraded.
Negotiations with China are near completion and work with South Korea is expected to start soon.
These are efforts that Asean has made to expand its existing channels of trade and increase its resilience, which Dr Balakrishnan said was in line with Prime Minister Lawrence Wong's recent comments about the grouping.
In
a video message delivered on July 5 , Singapore's Prime Minister Lawrence Wong urged the grouping to be bolder. He said Asean must become a more seamless and competitive single market if it wants to stay relevant in a changing global economy.
'Prime Minister Wong's call for reform and that sense of urgency was very timely. People recognised that, and it gives an additional push to all these efforts at accelerating integration and expanding the network of ties with our Asean external partners,' said Dr Balakrishnan.