ASEAN-GCC-China: Building a resilient trilateral trade architecture

New Straits Times

7 days ago

If procrastination is the thief of time, then pussyfooting around the Asean-GCC-China Summit agenda might well be wanton heedlessness!
Indeed, Asean must lead, not wait, because Malaysia is well-positioned to set that agenda.
While the Kuala Lumpur Declaration on Asean 2045 outlines an ambitious vision – a developed Asean that is the epicentre of growth in the Indo-Pacific – this aspiration won't come to pass in isolation.
As Prime Minister Anwar Ibrahim said, Asean's journey "is a story of cooperation across borders, dialogue across differences and hope across generations."
Rising as an engine of global growth hinges on how Asean diversifies its economic linkages, including with the GCC and China.
The Joint Statement of the trilateral Summit and the Asean-GCC Joint Declaration on Economic Cooperation mark a significant step forward.
Both documents lay the foundation for a convergence that could reshape the region's trade architecture and deepen existing economic synergies, through three interconnected tracks: the Asean-China Free Trade Area (ACFTA) 3.0 Upgrade, the Asean-GCC FTA, and indirectly, the China-GCC FTA.
Each agreement is progressing at a different pace. The ACFTA 3.0 is nearing completion, incorporating new-generation chapters on digital trade, competition, green economy and regulatory coherence. On the other hand, the China-GCC FTA, long under negotiation, is close to finalisation.
Meanwhile, the Asean-GCC FTA is at the feasibility study stage, with negotiations to be launched soon. It gives Asean and the GCC a rare opportunity to draw on the structure and substance of the other two negotiations and design an agreement that bridges the earlier two initiatives.
The sequencing could, in fact, work tremendously in favour of Asean, positioning it as the central node in a new trade framework.
What is often overlooked is that these are not discrete bilateral tracks.
Rather, they weave a coherent structure connecting Southeast Asia, the Gulf and China, three of the world's most dynamic economic blocs.
Such a scheme could lend further credence to the rules-based multilateral trading system, which, in Anwar's words, is being subjected to "the onslaught of arbitrary imposition of trade restrictions."
It would also provide greater certainty and predictability for investors, and institutionalise Asean's centrality in the evolving global trade order.
The economic logic is compelling, and the numbers are convincing. The GCC was Asean's seventh-largest trading partner in 2022, with trade totalling US$130.7 billion, and is projected to grow at 30 per cent annually.
Asean-China trade surpassed US$722 billion in 2022, making China Asean's largest trading partner for the past 14 consecutive years.
These relationships already run deep. What is missing is strategic coherence, something the trilateral FTA configuration could decisively address.
Woven into such an arrangement must be substantial commitments in key growth sectors such as Islamic finance, digital economy, and renewable energy, which offer mutual benefits and long-term dividends.
Introducing them explicitly into such an FTA would mark a refreshing departure from conventional trade accords, not to mention, create a more innovative partnership. Naturally, working together on currency settlements, cross-border payments, and sovereign wealth fund linkages could further strengthen financial resilience.
Malaysia, as Asean Chair, has already taken the lead.
We are pushing for the early conclusion of ACFTA 3.0, supporting a clear timeline for Asean-GCC FTA negotiations, while advancing the formation of a permanent mechanism that would coordinate the multiple trade tracks strategically.
Additionally, setting up a regional business council could ensure private sector alignment, enabling businesses to benefit from this evolving topography.
While some noted the absence of several GCC Heads of State at the Summit, the GCC was nonetheless robustly and adequately represented, underscoring institutional earnestness. Premier Li Qiang's attendance, meanwhile, is a clear signal of China's commitment.
If a picture paints a thousand words, then the appearance of Asean leaders being flanked by GCC leaders, clad in traditional Arab attire, on one side, and Chinese leaders on the other, does make for amazing optics!
Granted, while faith may move mountains, looks alone won't. But add in the substantive discussions and professed undertakings, we are looking at a level of engagement that must perforce inspire Asean to seize the moment.
The coming decade will not be shaped by more of the same. It will be shaped by those who can integrate across fault lines, build resilient frameworks, and champion multilateralism with a powerful sense of purpose.
A trilateral trade architecture linking Asean, the GCC and China is not just about trade flows. It is a strategic bet on a more cohesive, rules-based and opportunity-rich regional order.
The ball's in Asean's court. And Malaysia, as Chair, must hit it!