Latest news with #AseanFreeTradeArea
New Straits Times
25-05-2025
- Business
- New Straits Times
Asean flag deserves a spot next to Jalur Gemilang
How many Malaysians can readily identify the Asean flag, the emblem that represents unity, strength and shared identity among Southeast Asian nations? Not many. Yet in recent weeks, the flag has gained prominence, being displayed in Kuala Lumpur as Malaysia hosts the 2025 Asean Summit, alongside the summit's logo and theme of sustainability and inclusivity. Amid the hustle and bustle usually associated with such high-level meetings, the Asean flag stands as a silent yet powerful reminder of Malaysia's deep-rooted connection to this organisation. But should our recognition of the flag be limited to Asean Summits held every decade or the annual Asean Day celebrations on Aug 8? Certainly not. Malaysia's identity in Asean deserves more than fleeting visibility. It should be ingrained in our national consciousness, just as deeply as our Jalur Gemilang. The Asean flag is more than a decorative emblem; it represents tangible opportunities for Malaysians. For young professionals in Malaysia, it can signify the importance of the Asean Mutual Recognition Arrangements that enable engineers, nurses and tourism specialists to work in Asean nations with recognised qualifications. It also ties into the Asean Smart Cities Network, which drives urban development and digital connectivity in the region. For business owners and corporate executives, Asean offers vast opportunities across multiple sectors, thanks to its regional trade agreements, economic integration and strategic location. Malaysia's strong economic performance, strategic location and trade agreements make it a key player in Asean's growth. Businesses can leverage these opportunities to expand regionally and globally. A key driver is the Asean Free Trade Area, which allows for tariff reduction, thus making Malaysian exports more competitive. Malaysia's trade with Asean reached RM765 billion in 2024, accounting for 26.6 per cent of the country's total trade. With Asean's digital economy growing, it offers new business models for Malaysian firms. And there's also the Regional Comprehensive Economic Partnership, which provides expanded market access to Asean and the Asia Pacific. If Malaysians lack awareness of Asean's significance, how can they seize these opportunities? The answer lies in stronger visibility and education about Asean's presence, starting with recognising its flag and all it stands for. To decode the symbolism of the Asean flag, let's look at the elements: Dark Blue Background: Represents peace and stability, a commitment shared by member nations; Bright Red Circle: Mirrors the courage and dynamism of Asean, signifying collective strength in facing challenges; and, White Circle Enclosing the Emblem: A symbol of unity and harmony, proving that despite diversity, Asean nations stand as one. The 10 yellow stalks of rice represent Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand,and Vietnam, bound together in solidarity and striving for regional prosperity. Rice, a staple food in Asean, further emphasises that shared culture. In promoting the flag's visibility, we must remember that under the Asean Charter, the flag is not limited to embassy grounds; it can be flown in government buildings, ministries, universities and event venues. Asean member states are encouraged to display it alongside their national flags, signifying commitment to the bloc. But there must be protocol for flag display to ensure diplomatic and symbolic respect. The national flag should always take the position of honour. The Asean flag should be of equal size and height when flown with the national flag and should never be placed higher than a national flag, ensuring respect for sovereignty while reinforcing Asean's collective identity. Malaysia, as an integral member of Asean, can normalise the presence of the Asean flag beyond official gatherings. Increased awareness starts with education, visibility and conversations about Asean's role in shaping Malaysia's future. Flying the flag isn't just about symbolism. It t's about acknowledging the economic, cultural and diplomatic benefits Asean provides. If Malaysians are encouraged to embrace it, they will begin to see Asean not as a distant entity but as a powerful force shaping their opportunities and progress. The Asean flag should not be reserved for ceremonial occasions, but should be flown daily as a reminder that Malaysia stands in unity with its neighbours.
The Star
24-05-2025
- Automotive
- The Star
Steering through automotive supply chain shifts: Malaysia's resilience in a volatile world
HOW time flies. We are already a quarter of the way into the 21st century. In that time, the world has endured a series of shocks. A global financial crisis, and several regional ones. Pandemics and epidemics – one of which brought economies to a standstill. Major geopolitical conflicts, each with deep humanitarian costs. What used to feel like rare events are now reminders that volatility has become our era's default setting. The past few years have taught us a hard truth: The world is no longer predictable. What once were isolated incidences, are now sustained events that reveal how deeply interconnected – and exposed – our global systems have become. Few industries reveal this truth more starkly than the automotive sector. In Malaysia, this reality came into sharp focus for the automotive industry. Long considered a stable contributor to our gross domestic product (GDP) and a core part of the Asean ecosystem, the sector has had to rewire how it thinks about resilience, localisation, and its place in an increasingly fragmented global economy. An industry interwoven with the world Automotive manufacturing has always relied on a cross-border choreography – one in which a component made in Vietnam is shipped to Thailand, paired with software from Japan, and finally assembled in Malaysia. The efficiency was remarkable. But when just one point fails, the entire system falters. Malaysia's automotive players have felt these ripples firsthand. Not from direct tariffs or embargoes, but from the shifting strategies of global suppliers and logistics networks. Suddenly, questions that were rarely considered – 'What if a key supplier halts operations?' – have moved to the centre of boardroom conversations. Shifting from cost to continuity Where once the goal was to lower cost, today it's to lower risk. The automotive sector is beginning to pivot: exploring dual sourcing, reshoring critical parts, and embracing more regionalised models of supply. Supply chain resilience is no longer a 'nice-to-have' – it's a prerequisite. To support this shift, Malaysia's National Automotive Policy (NAP 2020) has laid important groundwork. It emphasises the development of a competitive and sustainable automotive industry by encouraging local component manufacturing, promoting technological advancements, and enhancing supply chain resilience. These include incentives for investment in local research and development (R&D), along with the adoption of Industry 4.0 technologies to improve efficiency and visibility across the supply chain. But policies take time to mature. Real progress hinges on execution. Three Paths to Resilience 1. Regional sourcing and collaboration. By tapping deeper into Asean's collective strength, under the Asean Free Trade Area (AFTA), Malaysian players can reduce exposure to distant disruptions. Shared production hubs, aligned quality standards, and streamlined cross-border trade offer practical ways to secure supply while boosting regional competitiveness. 2. Technology for transparency. More manufacturers are adopting predictive analytics and digital twins to model supply risks before they happen. What used to be a black box – the logistics chain – is becoming a dashboard, allowing for more informed, faster decisions. 3. Redefining local content. Localisation must now mean more than assembly. It means R&D, process innovation, and skilled labour development – all tailored to Malaysia's unique position. That's how we move from being an assembly hub to a knowledge and capability hub. Tariff war begins The imposition of tariffs by the United States under the current administration took many by surprise. While Malaysia's automotive exports to the United States are limited, the tariffs have a ripple effect across the global economy. A disruption at a single tier-one supplier in one country could have cascading effects down the supply chain, halting production lines thousands of miles away. Increased raw material and component costs, along with future uncertainties in trade relationships, will force manufacturers to revisit sourcing strategies and address vulnerabilities in the supply chain. Manufacturers want stability and predictability. More than low-cost sourcing, they seek partnerships with countries that offer sound policies, stable economics, and favourable tariff structures. Tariffs also affect adjacent industries – steel, composites, electronics, telecommunications – all of which feed into automotive manufacturing. Malaysia's manufacturers are still reliant on imported components, and that impacts both local assembly and export competitiveness. Building an adaptive industry So, what are we doing as an industry and economy to mitigate these shifts? Firstly, supply chain diversification. Manufacturers are actively seeking alternative suppliers in different regions to reduce single-source dependencies. This includes greater exploration of intra-Asean partnerships and new emerging markets. Secondly, digitalisation. The Covid-19 pandemic accelerated the adoption of real-time tracking, predictive analytics, and supply chain modelling. These tools help automotive companies gain visibility, anticipate disruptions, and respond more effectively. And thirdly, renewed focus on localisation. Government incentives are encouraging both foreign and domestic investments in component manufacturing. This reduces import reliance, creates local jobs, and strengthens the resilience of our export capacity. Talent, innovation and collaboration Localisation will further require, to future proof the transition, a robust talent pipeline. From R&D and manufacturing to after-sales service, human capital is key. Malaysia has long invested in technical and vocational education, and partnerships with automakers ensure that this ecosystem evolves in tandem with industry needs. We are home to a number of tertiary and vocational training institutes, many of which have allied with global manufacturers to generate a steady stream of talent. Localisation must be innovation-driven. It's not about replicating global models, but adapting them to our local strengths. Setting up at pace, scaling responsibly, and embedding quality – these are the new imperatives, and serve as encouragement to invest in increasing local content in locally assembled products. As a member of Asean, Malaysia sits within a regional automotive ecosystem, where our neighbouring countries compete with us to attract manufacturing and investment opportunities. But as the globalisation banner makes way for regionalisation, this opens up a slew of opportunities for collaboration. In complex automotive assemblies, such as a car dashboard, components may come from several countries, so having ease of trading and logistics between partner countries can save time and cost, shared growth leads to shared resilience, benefiting local industries. Conclusion Malaysia's automotive sector is already one of the most developed in Asean. It contributes 4% to GDP and supports over 700,000 jobs. We have one of the highest vehicle populations in the region – and we are not standing still. The disruptions we face are global. But our response must be local, regional, and forward- looking. The future of mobility depends not only on what we build – but how we build it, and who we build it with. In this, Malaysia is not just participating in the conversation – we're helping shape the next chapter. The views expressed here are the writer's own.
New Straits Times
05-05-2025
- Politics
- New Straits Times
From Jungle Diplomacy to Geopolitical Jazz: Why Asean and the EU Are the twin anchors of a fragmenting world
Regionalism: The New Operating System of Global Stability If you really want to understand where the 21st century is heading, don't just look at Washington, Beijing, or Moscow. Look at the regions. Because in a world that's becoming more fragmented, more contested, and frankly more chaotic, regionalism - that is, countries choosing to work together, not out of ideology or conquest, but out of sheer necessity - is emerging as the new operating system of global stability. And if you're looking for the two most successful examples of this system in action, look no further than the European Union (EU) and Asean, the Association of Southeast Asian Nations. They're both regional blocs. They both arose from turbulent pasts. But they couldn't be more different in how they were built, how they function, and how they endure. Europe's Supranational Cathedral The EU was built out of the ashes of two world wars. Europe's leaders, exhausted from centuries of bloodshed, finally asked: What if we tied our economies so tightly together that war would become unthinkable? So they did just that. They started with coal and steel. Then came customs unions, a single market, the euro, and even a European Parliament. Brussels today is more than a capital - it's a nerve centre of supranational power. The European Court of Justice can overrule national judges. The European Commission can slap billion-dollar fines on tech giants. This is regionalism with an operating manual - rules, laws, institutions, and yes, bureaucracy. It's deliberate. It's rules-based. It's integration with teeth. Asean From Jungle Diplomacy to the Asean Way Now, hop on a plane to Jakarta, and it's a different world entirely. ASEAN didn't come out of boardrooms and treaties. It came out of the jungle - literally. It was born in 1967 by five countries - Indonesia, Malaysia, Thailand, the Philippines, and Singapore - all of them struggling with post-colonial nation-building, Cold War geopolitics and domestic insurgencies. The goal wasn't unity. It was survival. From that rough start, Asean stitched together a quiet but remarkably durable diplomatic fabric. Where the EU trades sovereignty for strength, Asean clings to sovereignty like a lifeline. There's no Asean Parliament. No regional court telling leaders what to do. Instead, you get what's known as "the Asean Way" - consensus over confrontation, non-interference over integration, diplomacy over directives. It's slow, sometimes maddeningly so, but it has its own rhythm. If the EU is a cathedral, Asean is a village marketplace - chaotic, diverse, but very much alive. Economic Milestones: From AFTA to AEC And yet, Asean has made real progress - particularly in economic cooperation. It started with the Asean Free Trade Area (AFTA) in 1992, which reduced tariffs and encouraged intra-Asean trade. That matured into the Asean Trade in Goods Agreement (ATIGA) in 2009, introducing more standardised trade rules and customs procedures. Parallel to that came the Asean Framework Agreement on Services (AFAS) in 1995, which chipped away at barriers in sectors like banking, education, and transport. The crown jewel, for now, is the Asean Economic Community (AEC), launched in 2015 - an ambitious blueprint to turn Southeast Asia into a single market and production base. It's not perfect. Enforcement is uneven, and gaps remain in the movement of skilled labor and investment rules. But it's more than symbolic - it's structure, it's ambition, and it signals forward momentum. Internal Cracks and Public Perception While both blocs show resilience, they also face internal fissures. In the EU, Brexit served as a sobering reminder that integration can be reversed. Populist movements across Europe, whether in Italy, France, or Hungary, are questioning the very legitimacy of Brussels. Meanwhile, calls for "strategic autonomy" are growing louder, as Europe debates whether it can continue relying on NATO and US protection. Asean's own cohesion is tested by internal disparities - from the humanitarian crisis in Myanmar to ongoing questions about Timor-Leste's accession. Citizens across the region often perceive Asean as distant, elitist and technocratic. Public awareness of Asean remains low, despite the lofty economic and diplomatic goals. The Great Power Squeeze: China, Russia, and U.S. Retrenchment The post-Cold War honeymoon is over. The world is entering what some call a new Cold Peace - a turbulent, multipolar age where American isolationism, China's gravitational pull in Asia, and Russia's strategic assertiveness in Europe's backyard are reshaping the global order. In Europe, the Ukraine war has jolted the EU into a more geopolitical stance. It's spending more on defense, talking about strategic autonomy, and confronting the uncomfortable truth that NATO alone might not be enough. But cracks are showing - Hungary vetoes aid packages to Kyiv, Germany hesitates on military commitments, and populist parties continue to gain traction. In Southeast Asia, the challenge is subtler but just as existential. China isn't invading - it's enveloping. Through the Belt and Road Initiative (BRI), trade dominance, and maritime assertiveness in the South China Sea, Beijing tests Asean's unity on a neardaily basis. Some members lean toward China. Others hedge with the US, Japan, or India. But without a coherent front, Asean risks becoming a bystander in its own backyard. Then there's America - the former guarantor of global order. Whether it's Trumpian nationalism or progressive disengagement, US foreign policy increasingly signals retrenchment. Both Asean and the EU now quietly ask: Who do we turn to when Washington turns away? Conclusion: Can the Cathedral and the Marketplace Survive the Storm? This is the real stress test of regionalism in the 21st century. Can Asean and the EU hold their ground in an age of great power rivalry? Can they evolve from mere talking shops or trade blocs into serious geopolitical actors? Or will they buckle under pressure - fragmenting into narrow nationalisms, caving to internal divisions, or simply becoming irrelevant as the world hardens into spheres of influence? The answer isn't written yet. But here's what we do know: both blocs were built in times of uncertainty. The EU turned war zones into wine routes. Asean turned jungle firefights into trade forums. Their success wasn't inevitable - it was earned. And if they can keep adapting, keep trusting the process, and most of all, keep talking to each other instead of yelling at each other, they just might emerge from this messy multipolar moment stronger, not weaker. Because in a world of weaponized trade, information warfare, and geopolitical poker, regions that can cooperate - however loosely - still offer the best hope for peace, prosperity, and yes, a little sanity. * The writer is an adjunct lecturer at Universiti Teknologi Petronas, international relations analyst and a senior consultant with Global Asia Consulting. The views in this OpEd piece are entirely his own.
Express Tribune
16-02-2025
- Business
- Express Tribune
Trade, economic partnership agreements fuel growth
Listen to article BRUSSELS: Pakistan, by developing its own internal integration through free trade agreements and economic partnership agreements with Central Asian Republics (CARs) including Kazakhstan, Uzbekistan, Tajikistan, Kyrgyzstan, Turkmenistan and most importantly with China, can provide refuge at times when other markets suffer. The free flow of products and people across country borders increases overall economic efficiency, widens consumer choices, decreases production costs and enables faster economic growth. It contributes to improved living standards and increased investment opportunities. As total trade flow increases, liquidity increases. With an increase in liquidity comes a decrease in volatility, which is eventually followed by broader, deeper markets with an improving risk profile. So, while optimal policy prescriptions within all four grand kingdoms of macroeconomics (fiscal policy, monetary policy, income policy and trade policy) are desirable, effective trade policy can be especially important for fueling economic growth and equity market outperformance. Free trade among Central Asian countries and Pakistan will make the region more competitive and more productive. By reducing arbitrary government constraints on trade flows, businesses enjoy increased market access and can exploit economies of scale and other local advantages, allowing them to purchase resources from the cheapest suppliers and locate manufacturing operations where they are most efficient. Expansion of free trade in Southeast Asia among member countries of the Association of Southeast Asian Nations (Asean) is an example to follow. Total trade (exports and imports) in the Asean bloc has surged since 2002-03, when the Asean Free Trade Area drastically reduced tariffs within the region. Today, total trade stands at more than $750 billion and foreign direct investment (FDI) above $200 billion. Furthermore, trade within the Asean bloc represents 60% of their total trade and their annual growth rates for the last two decades have averaged between 8% and 10%. The Asean region has shown that they understand trade dynamics and a major stimulus to growth. Besides the Asean-China free trade agreement, they also have free trade deals with India, South Korea, Japan, Australia and New Zealand. Included in the Asean-China free trade deal is an agreement on FDI. The agreement stipulates that there will be similar transparency and legal protection for Chinese companies in the Asean region as those granted to member countries of the bloc. This simply makes it easier for capital to flow from China to the Asean region. The net inflow of FDI into Asean countries from China has been substantially positive since the start of tariff reductions in 2005. It is thus much easier for companies to seek competitive advantages within the region, leading to increased investment and ultimately higher growth. It is high time that Pakistan and Central Asian countries with China create a similar regional free trade agreement that involves reduction or elimination of tariffs and decreased regulations on investments and services. There are investment opportunities across the board as trade acceleration increases the pace of economic growth. Currently, Pakistan's trade with CARs is between $400-500 million annually and is mostly via Afghanistan. This should not be the case. Pakistan shares deep cultural and historical ties with Central Asian states since centuries and therefore it is imperative to enhance mutual interest in regional trade connectivity. Additionally, Pakistan's geographical location would offer CARs the potential to integrate their transit trade routes via Sost-Khunjerab in Gilgit-Baltistan all the way down to Gwadar and Karachi ports on the Arabian Sea. Kashgar, located in southwestern Xinjiang, China is well positioned to become a major regional logistic hub for Transports Internationaux Routiers (TIR) and can be used for access to and from all neighbouring Central Asian countries and integrate with the China-Pakistan Economic Corridor (CPEC). The regional land route connectivity under TIR holds the key to diversifying Pakistan's total trade and unlocking markets in Central Asia. This quicker mode of transportation for regional connectivity can be undertaken by National Logistics Corporation (NLC) and others under TIR and Multimodal conventions. The road route can also be connected for transshipment by rail towards Pakistani ports, which are currently underutilised, then by sea towards their final destinations and vice versa. As trade volumes continue to rise, more and more transit/TIR hubs will emerge within CARs and Pakistan, at last fulfilling the crucial component of CPEC. The writer is a philanthropist and an economist based in Belgium
