No visitor to Jakarta in 2023 could miss it: the Indonesian capital was festooned with the branding of the Indonesian ASEAN chair year’s slogan that spruiked Southeast Asia as the world’s ‘epicentrum of growth’.
Here was one area where ASEAN’s self-congratulation matched the reality. GDP growth across the bloc is estimated to stabilise around 4 per cent throughout the rest of this decade — stronger than average growth in the G7 or European Union and in the same league as China.
But as any investor in the region will tell you, ASEAN is not one market. And despite ASEAN’s decades-long efforts to increase economic integration among its members, eventually creating a ‘single market’ among them, only around 20 per cent of ASEAN trade is with other ASEAN countries, whereas around 40 per cent of North American trade is with other North American partners and 60 per cent of European trade occurs within Europe.
But ASEAN can’t — and arguably shouldn’t — make the intensity of trade among its members the benchmark for success of its integration process; indeed, ASEAN’s mode of integration has always rejected the inward-looking closed-shop approach typified by the EU or NAFTA/USMCA. ASEAN’s own long-term plans for the achievement of the ASEAN Economic Community — as its single market ambitions are labelled — emphasise the importance of integration as a tool of creating a base for ASEAN’s integration into the global economy.
ASEAN is already deepening that integration into global value chains. Exports from ASEAN have increased by 480 per cent since the turn of the century, taking ASEAN’s share of global exports from 5.4 per cent to 7.8 per cent over the same period. ASEAN has successfully grown trade to over 100 per cent of its collective GDP compared to 70 per cent in Europe and 22 per cent in North America.
The bottom line is that ASEAN is now a central stakeholder in globalisation. Its economic success this century owed much to the protections of the rules-based global trade regime and its own integration achievements. It is a club of small and middle powers who recognise the value in collective action if they aren’t to be complete policy ‘price takers’ in a global environment where open and rules-based trade is becoming collateral damage amid the instrumentalisation of economics for geopolitical ends.
But ASEAN will need to show leadership to match the scale of the challenge — and it needs the active participation of dialogue partners like Australia who share a common interest in resisting protectionism and reinforcing multilateral management of common economic challenges.
Economic cooperation with ASEAN is where ASEAN’s agenda dovetails with Australia’s urgent interest in building new political partnerships to defend what Foreign Minister Penny Wong has called the ‘open, free and predictable trading arrangements’ that both Australia and Southeast Asia depend upon for their prosperity.
The Australian government has flagged closer economic engagement with Southeast Asian governments to elevate trade and investment ties with the region, which are underdeveloped relative to their potential. This underpinned the recommendations of the Moore report on Australia’s Southeast Asia economic strategy.
Economic cooperation with Southeast Asia in support of ASEAN’s integration agenda will pay dividends for Australian exporters and investors’ access to Southeast Asian markets, making it a worthwhile goal in its own right. But this should not be the primary guiding logic of Australia–ASEAN economic cooperation — nor should the goal of seeing closer commercial ties with Southeast Asia be defined only in terms of the possibilities for ‘diversifying’ trade away from China.
Australia’s economic cooperation agenda with Southeast Asia needs to kill two birds with one stone — boosting economic ties with the region by supporting ASEAN’s ambitions to remove impediments to trade and investment, while fulfilling Australia’s strategic interest in positioning collaboration with ASEAN as a core part of Australia’s global diplomatic strategy.
To do this, Australia must proactively engage with ASEAN’s ongoing integration processes — both those focused on its own membership as well as region-wide ones — to chart an economic cooperation agenda focused on lowering barriers to trade and investment in the region, defending and backstopping the WTO-based multilateral trade regime, and getting the rules right to unlock finance and technologies to achieve rapid decarbonisation of regional economies.
The green focus is now of paramount importance because of the imminent withdrawal of the United States not only from constructive participation in multilateral economic governance, but also from multilateral climate cooperation.
Australia should work with ASEAN to make the achievement of a Single Green Market the touchstone of regional cooperation efforts. Free trade and investment in green goods, credits, technology and financing can be achieved through cooperation to harmonise regulatory settings across borders to unlock private investment in the technologies and climate mitigation strategies that are needed to make Southeast Asia’s growth sustainable.
While diplomatic engagement with national governments will be necessary to keep the political momentum going in this process, prioritising whole-of-ASEAN modes of cooperation has the most strategic payoff by reinforcing the idea that our region’s transnational policy challenges are best tackled multilaterally, and with ASEAN playing an honest broker role in the centre.
Key platforms in this regard are the ASEAN–Australia–New Zealand Free Trade Agreement (AANZFTA) and the nascent Regional Comprehensive Economic Partnership (RCEP) economic and technical cooperation pillar.
At the 2024 ASEAN–Australia Special Summit, ASEAN and Australia affirmed their joint aspiration to collaborate to achieve their shared interest in an open, rules-based, and sustainable economic order. The sooner this agenda exists in practice rather than theory the better, as Australia needs to take a more realistic look at which allies count among the ‘like-minded’ in a world where longstanding friends flirt with a protectionism that is anathema to our national interests.
This article first published in the East Asia Forum.
December 15, 2025 East Asia Forum
