The ASEAN Economic Ministers’ Retreat in Johor Bahru Malaysia focuses on economic resilience and digital transformation amid global US tariff trade tensions.
The looming threat of US tariffs fuelled a strong drive for unity among ASEAN countries, which was on full display at the recent 31st Economic Ministers’ (AEM) Retreat.
The meeting saw a wave of regional consolidation as member countries moved to strengthen economic partnerships through various treaties and initiatives. Held from February 26 to 28 in Desaru, Johor, Malaysia, the retreat underscored ASEAN’s commitment to economic resilience and cooperation amid global trade uncertainties.
US President Donald Trump’s plan to impose a 25% tariff on imports, including automotive, semiconductors, and pharmaceuticals, has sparked widespread concern among ASEAN countries.
Worried that these protectionist measures could disrupt their economies due to substantial trade ties with both the US and China, ASEAN leaders focused on strengthening regional stability and economic cooperation.
The bloc made progress on ASEAN Trade in Goods Agreement (ATIGA)which aims to further liberalize the movement of goods and services.
A key outcome of the retreat was the endorsement of 18 Priority Economic Deliverables (PEDs), which aim to deepen economic integration, support inclusive growth, promote sustainability, and expand the digital economy across member states.
The ministers also made substantial progress on the ASEAN Digital Economy Framework Agreement (DEFA), aimed at modernizing regional economies through digital innovation and cross-border digital trade.
As part of this digital push, ASEAN adopted a roadmap for implementing Unique Business Registration Numbers (UBIN) across the bloc, which will streamline business processes and enhance transparency.
These initiatives are seen as vital steps toward advancing the ASEAN Economic Community (AEC) and preparing for future challenges.
While US tariffs dominated the discussion, ministers also addressed the broader issue of protectionist policies that could hinder the services sector.
The consensus was that ASEAN must position itself as a neutral trade hub to attract investments that might otherwise flow to the US or China. This approach would not only strengthen regional economies but also help mitigate the negative impacts of the global trade war.
Apart from internal agreements, the retreat emphasized building stronger economic links with major global partners such as China, India, and Gulf Cooperation Council (GCC) countries.
The ongoing negotiations for the ASEAN-China Free Trade Area (FTA) 3.0 received a positive update, with plans for signing later this year. Additionally, progress was made on the ASEAN Framework Agreement on Intellectual Property, ensuring better protection for innovations and digital assets.
The retreat also discussed the potential economic opportunities arising from the US-China conflict. One promising initiative is the proposed Johor-Singapore Special Economic Zone, aimed at boosting cross-border trade and investment. Furthermore, ASEAN is looking to leverage the current global economic uncertainties by positioning itself as a reliable and neutral trade destination.
With Timor-Leste’s potential membership and the progress on the AEC Strategic Plan 2026-2030, the retreat concluded on an optimistic note. ASEAN leaders reiterated that they are determined to build a resilient and digitally advanced regional economy that can withstand global disruptions and foster sustainable growth.
According to a recent Reuters news report, ASEAN is planning to hold a summit with the United States to allow its member countries to present their concerns and perspectives on the proposed U.S. tariffs.
