ASEAN+3 Nations Face Critical Juncture in Global Trade

Region Must Navigate Protectionism and Reshape Globalization

In a world of rising protectionism and geopolitical tensions, ASEAN+3—comprising the ten ASEAN members plus China, Japan, and Korea—stands at a crucial crossroads. These nations have a vital role to play in bolstering the rules-based trading system and fostering a more inclusive global economy.

Challenges to the Global Trade System

The established framework for international commerce is strained. Policies favoring protectionism, trade measures targeting specific sectors, and the use of tariffs as weapons undermine global trade stability. This jeopardizes decades of economic progress and threatens the open trade that has long supported worldwide prosperity.

The uncertainty is also influencing business confidence, which negatively impacts investment decisions. Companies are rethinking long-term strategies because of fear of sudden regulatory changes or market volatility. Supply chains, once designed for efficiency, are now being restructured around ideas of redundancy, resilience, and protectionism.

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“Without a coherent, rules-based framework, global value chains become vulnerable, investment risks amplify, and smaller, trade-dependent economies are left exposed.”

—Hoe Ee Khor, Economist

The World Trade Organization (WTO) reports that global merchandise trade volumes increased by only 0.8% in 2023, down from 3.2% the previous year, demonstrating the strain (WTO 2024).

ASEAN+3’s Strategic Role

The ASEAN+3 region—which includes China, Japan, and Korea—holds significant influence, accounting for around 30% of the global GDP, approximately 28% of global trade, and almost 20% of foreign direct investment. Its deeply integrated supply chains, spanning sectors like electronics and automobiles, have fostered interdependence and a shared sense of purpose.

The region has a solid foundation and also the responsibility to help sustain the global trading system, which is based on rules.

A Path Forward

The region must pursue specific strategies to maintain its role. This includes deepening regional integration, revitalizing the WTO, and leading in new areas like green technology and digital trade.

Deepening regional policy discussions and enhancing macroeconomic coordination remain essential. The Chiang Mai Initiative Multilateralisation (CMIM) provides a crucial financial safety net. Simultaneously, the ASEAN+3 Macroeconomic Research Office (AMRO) supports this framework through timely surveillance and policy guidance.

By embracing these measures, the region can help reshape globalization for the 21st century, making it more inclusive, resilient, and adaptable to the changing world.

With a commitment to openness, cooperation, and rules-based governance, ASEAN+3 can demonstrate to the world that the next phase of globalization can be achieved through renewed partnerships and shared prosperity.