Trade protectionism disrupts global trade - ASEAN+3
The meeting was held on May 4, 2025, in Milan, Italy, under the co-chairmanship of Malaysia's Finance Minister II Datuk Seri Amir Hamzah Azizan, Bank Negara Malaysia governor Datuk Seri Abdul Rasheed Ghaffour, China's Finance Minister Lan Fo'an, and the People's Bank of China governor Pan Gongsheng.
The ASEAN+3 Macroeconomic Research Office (AMRO) director, the Asian Development Bank (ADB) president, the ASEAN Secretariat deputy secretary-general, and the International Monetary Fund (IMF) deputy managing director were also present.
In a joint statement, AFMGM+3 said that near-term prospects may also be affected by other external risks, including tighter global financial conditions, growth slowdown in major trading partners, and reduced investment flows.
'We call for enhanced regional unity and cooperation as we endeavour to weather the heightened uncertainty. Our current policy priority is to reinforce long-term resilience while maintaining flexibility to address near-term challenges, including rising protectionism and volatile global financial conditions.
'On the fiscal front, this means rebuilding policy buffers while continuing to provide well-targeted support to sustain growth while implementing structural reforms. We will also carefully recalibrate monetary policy based on domestic conditions,' said the group.
AFMGM+3 emphasised that they will maintain exchange rate flexibility as a buffer against external shocks.
'Our export markets and sources of growth have become increasingly diversified over the years, with domestic demand and intraregional trade now serving as key drivers of growth,' it said.
The group said that amid rising uncertainties and long-term structural shifts, they reaffirm their full commitment to multilateralism and a rules-based, non-discriminatory, free, fair, open, inclusive, equitable, and transparent multilateral trading system, with the World Trade Organisation at its core.
'We will enhance macro-economic policy dialogue, promote regional financial cooperation, and ensure stable and unimpeded industrial and supply chains, to jointly safeguard regional economic and financial stability.
'We fully support the robust implementation of the Regional Comprehensive Economic Partnership (RCEP) Agreement,' it said.
They urge international organisations to uphold multilateralism and promote free trade, analyse and monitor the potential impact of trade tensions on the global economy, and support their members in providing policy advice to manage the negative shocks that may arise.
'We will promote greater intra-regional trade and investment flows to strengthen the region's resilience against external shocks, to adjust to pre-existing and new challenges, and to support sustainable and equitable economic development.
'Given our financial market interlinkages, we are closely monitoring regional financial market conditions,' it said.
AFMGM+3 stated that the meetings reaffirm their resolve and commitment to ensure that financial systems and markets remain resilient despite uncertainty, while maintaining open communication among members in light of rapidly evolving developments.
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Aw explained that the key American products that Malaysia imports are integrated circuits, computers, semiconductor manufacturing equipment, engines and aircraft, all of which the United States is already a dominant source, especially in aircraft and engines. 'This puts forth the question as to whether Malaysia can import more from the United States. 'In Malaysia's imports of electronic integrated circuits where the United States accounts for 14%, is Malaysia able to reduce imports from other key sources such as Taiwan, Singapore, China and Japan to increase US-originated imports? 'This may be possible in the long term as supply chains evolve, but a tall order in the short term,' said Aw. To meet its investment commitment, Aw further approximated that Malaysia is to invest US$7bil each year in the United States over the next 10 years. Citing the country's balance of payments data, he reported that Malaysia's direct investment abroad in 2024 totalled to around US$13.9bil. 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