ERIA Seminar Urges ASEAN to Recalibrate Strategy Amidst Global Trade Disruptions
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Jakarta, 24 June 2025: Leading experts, policymakers, and practitioners convened at ERIA for a high-level seminar on how ASEAN can respond to mounting global trade tensions and economic fragmentation. The seminar, titled ’Remake or Recalibrate? ASEAN Strategies for Resilience in the Face of Trade and Economic Uncertainty,’ explored strategic options for strengthening regional resilience in light of recent developments, including the United States’ announcement of broad-based reciprocal tariffs on 2 April 2025.
The seminar featured a distinguished panel of speakers during the first session:
- H.E. Professor Dr Mari Elka Pangestu, Special Advisor for International Trade and Multilateral Cooperation to the President of Indonesia
- H.E. Dato Seri Paduka Lim Jock Hoi, former Secretary-General of ASEAN
- Datuk Seri Jayasiri Jayasena, former Secretary-General of the Ministry of Investment, Trade, and Industry, Malaysia
- Dr Yose Rizal Damuri, Executive Director, Center for Strategic and International Studies (CSIS), Indonesia
The second session gathered trade specialists from ERIA, the Philippine Institute for Development Studies (PIDS), the Institute of Developing Economies – Japan External Trade Organization (IDE–JETRO), and Viet Nam’s Foreign Trade University.
In his opening remarks, ERIA President Tetsuya Watanabe underscored ASEAN’s exposure to trade-related risks as a region deeply embedded in global value chains. With ASEAN’s total trade in goods with China and the US exceeding USD 1 trillion in 2024, President Watanabe warned of challenges including supply chain decoupling, shifting investment patterns, and softening growth. Yet, he emphasised that ASEAN is not merely reacting to change – it is actively shaping the transition.
‘Rising FDI inflows and supply chain realignments demonstrate ASEAN’s economic dynamism and its commitment to openness and integration,’ he said.
The high-level dialogue reinforced the historical value of ASEAN unity in navigating global trade. Amidst growing unilateralism, speakers called for stronger adherence to multilateral trade rules and the reinforcement of WTO mechanisms. As simulations predict substantial GDP losses if retaliatory tariffs escalate, panelists urged ASEAN to fully implement regional economic commitments to minimise internal fragmentation.
Recognising that these shifts represent structural, not merely cyclical, changes, the panel advocated for recalibrating ASEAN’s internal mechanisms to tackle multi-dimensional challenges. Recommendations included improving the quality and implementation of the Regional Comprehensive Economic Partnership (RCEP), accelerating trade in services liberalisation, and improving utilisation of ASEAN’s Free Trade Agreements (FTAs).
In the technical session, ERIA presented preliminary findings from an empirical study on the impact of US reciprocal tariffs, highlighting vulnerabilities in supply chains and scenarios for reconfiguration of parts and components exports. The session also identified emerging opportunities for ASEAN to capture portions of China’s shrinking US market share – particularly in electronics, automotive components, and consumer goods.
To capitalise on these opportunities, the panel stressed the need for deeper investment in infrastructure, workforce development, and capacity building. Presenters from IDE-JETRO and PIDS discussed scenarios where trade diversion could benefit ASEAN but also cautioned that constraints in national and regional capacities could limit gains.
Maintaining transparency, regulatory predictability, and a strong rules-based foundation was deemed essential for attracting sustainable investment and advancing regional integration.
Closing the seminar, Dr Aladdin Rillo, ERIA’s Managing Director for Policy Design and Operations, emphasised the importance of scaling up ASEAN’s collective response to safeguard long-term stability and prosperity.
‘Whether the answer is to remake or recalibrate, ASEAN must rebalance policy priorities and address underlying structural imbalances,’ he said.
He concluded by urging countries to build stronger domestic demand to reduce reliance on external trade, noting that coordinated trade, fiscal, and monetary policies are key to addressing inflation, shaping market confidence, and securing future economic resilience.