Strengthening Trade Relationships with Significant Allies
ASEAN ministers, including Commerce Minister Pichai Naripthaphan, have pledged to bolster economic partnerships with key trading partners amid global economic uncertainties, particularly due to US tariffs. This commitment was made during a teleconference on May 24, with attendance from ASEAN's economic ministers and those of China, Japan, Australia, and New Zealand, in conjunction with an ASEAN Economic Community Council meeting in Kuala Lumpur.
The meeting focused on the need for ASEAN and its trading partners to reinforce their multilateral trading system, emphasizing predictability, transparency, freedom, fairness, inclusiveness, and sustainability within the World Trade Organization framework. Deputy Prime Minister and Trade Minister Pichai also called for deeper trade and investment relationships among ASEAN and its partners.
To mitigate economic uncertainty's impact on trade, investment, and the overall economy, Thailand, along with ASEAN, intends to leverage economic cooperation, particularly by maximizing the benefits of existing trade agreements. Notably, China, ASEAN, and Thailand are working diligently to expedite the signing of an upgraded ASEAN-China Free Trade Agreement, with hopes of finalizing it this year. This upgrade will expand cooperation in emerging sectors, such as the digital economy, green economy, and supply chain connectivity.
During discussions with Japan, Thailand proposed expanding collaboration in the semiconductor industry, aiming to position the regional bloc as a significant manufacturing hub and a crucial component of Japan's supply chain. Regarding Australia and New Zealand, ASEAN's sixth and 10th largest trading partners, the ministers agreed to accelerate the implementation of the upgraded ASEAN-Australia-New Zealand Free Trade Agreement, with a focus on the circular economy, green economy, blue economy, renewable energy, and e-commerce.
China remained ASEAN's top trading partner in 2024, with total trade amounting to $770.94 billion, representing a 10% increase from the previous year and accounting for 19% of ASEAN's global trade. Exports to China reached $290.8 billion, a minimal increase of 1.2%, while imports totaled $480 billion, a 17.2% upsurge. Trade with Japan was valued at $235.1 billion, with ASEAN exporting $119.6 billion to Japan and importing $115.4 billion. Trade with Australia reached $94.4 billion ($51.9 billion in exports and $42.4 billion in imports), while trade with New Zealand totaled $11.9 billion ($7.1 billion in exports and $4.7 billion in imports).
Incorporating details from Enrichment Data, the upgraded ASEAN-China Free Trade Agreement, or ACFTA 3.0, prioritizes tariff reductions for pharmaceutical products and active ingredients, regulatory alignment, and fresh emphasis on the digital and green economies. Meanwhile, the ASEAN-Australia-New Zealand Free Trade Agreement focuses on fostering economic growth through trade liberalization in goods, services, and investment, particularly in emerging sectors like the digital economy, green economy, and supply chain connectivity.
- To further strengthen economic collaborations, ASEAN ministers have expressed the importance of reinforcing their multilateral trading system in the finance sector, emphasizing transparency, predictability, fairness, inclusiveness, and sustainability, specifically within the framework of the World Trade Organization.
- In the digital industry, Thailand has proposed expanding collaboration with Japan to position the regional bloc as a significant manufacturing hub for semiconductors, playing a crucial role in Japan's supply chain.
