ASEAN Must Act On Tariff Fallout With Clearer Trade Rules -- BNM Governor

KUALA LUMPUR, Nov 19 (Bernama) -- ASEAN must address the immediate fallout from the rise in tariffs by defining the rules of origin more clearly, closing transhipment loopholes, and developing trade diversion safeguards, said Bank Negara Malaysia (BNM) Governor Datuk Seri Abdul Rasheed Ghaffour.

He said the aim is to facilitate genuine trade and manage excess capacity from this region and its vicinity.

“Over the longer term, the priority is to deepen regional integration and uphold pragmatic multilateralism. 

“This means accelerating implementation of various trade agreements such as the upgraded ASEAN Trade in Goods Agreement (ATIGA), the ASEAN Regional Comprehensive Economic Partnership (RCEP) and the soon-to-be completed ASEAN Digital Economy Framework Agreement (DEFA),” he said in his keynote address at the 48th Federation of ASEAN Economic Associations Annual Conference, here today.

Abdul Rasheed said these agreements can help ASEAN elevate intra-regional sourcing, reduce the cost of doing business and strengthen intra-regional trade and investment. 

“Diversifying and strengthening trade partnerships, particularly with other advanced and emerging economies, is not just a hedge against uncertainty, it is a strategy for recovery,” he said.

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Besides, he said ASEAN’s ties with China, Japan and Korea go beyond culture and values and extend to value chains spanning industries.

“Institutions like the Asian Infrastructure Investment Bank have committed up to US$50 billion (US$1=RM4.15) in climate-related projects across ASEAN, while the Japan-ASEAN Integration Fund has provided over US$894 million in wide-ranging grants for economic integration, disaster management and human capital development since 2006. 

“This needs the groundwork for closer cooperation and ASEAN must be prepared to leverage these opportunities to fully realise the mutual benefits,” he said.

Beyond Asia, Abdul Rasheed highlighted that deepening an agreement with the European Union (EU) and Latin America offers a clear path to diversifying partnerships and unlocking new growth areas. 

“The ASEAN-EU trade already exceeds US$200 billion annually, making ASEAN the EU’s third-largest trading partner. While trade with Latin America is smaller, around US$32 billion, there is genuine potential. 

“By advancing high-standard, mutually-recognised trade agreements with blocs such as the South American trade bloc (MERCOSUR), ASEAN can position itself as a credible, competitive global partner,” he added.

-- BERNAMA