ASEAN Intra-Regional Trade Can Touch 40 Pct Through Global Value Chain Upgrade - Economist
By Siti Radziah Hamzah
KUALA LUMPUR, Oct 24 (Bernama) -- The bearish intra-ASEAN trade figure of 20 per cent of the region’s total trade can be doubled through global value chain upgrade and a stronger intra-regional investment which would reshape the 10-member bloc’s economic geography and mark a qualitative shift in regional integration, according to an economist.
The ASEAN+3 Macroeconomic Research Office (AMRO) group head and principal economist Allen Ng opined that initiatives such as the ASEAN Trade in Goods Agreement (ATIGA), the Regional Comprehensive Economic Partnership (RCEP) and the upgraded ASEAN-China Free Trade Agreement (ACFTA 3.0) are vital but not sufficient.
He said these initiatives can help push intra-ASEAN trade to 25 per cent.
“But with a successful domestic upgrading through global value chain linkages and stronger intra-regional investment, it could approach 40 per cent,” he told Bernama.
He cited strong integration into global value chains, particularly with Japan, South Korea, and China, to upgrade domestic capabilities through technology diffusion and productivity growth as among the key areas.
“Second, ASEAN needs to foster greater intra-regional investment, especially through the internationalisation of ASEAN firms, into the region in order to create new regional production and demand linkages and deepen existing ones,” he added.
He added that strengthening intra-regional investment and production networks would help ASEAN build resilience and reduce reliance on external demand.
On other developments, Ng said regional bond market development, local-currency financing and sustainable finance frameworks are improving access to capital and facilitating cross-border business expansion.
AMRO contributes to securing the macroeconomic and financial resilience and stability of the ASEAN+3 region through surveillance, supporting regional financing arrangements, providing technical assistance, serving as a regional knowledge hub, and facilitating financial cooperation.
ASEAN+3’s 14 member economies comprise the 10 ASEAN member states as well as China, Japan, and South Korea.
-- BERNAMA
