(Italy, 5th) The 28th ASEAN and China-Japan-Korea Finance Ministers and Central Bank Governors' Meeting (AFMGM+3) concluded that rising trade protectionism is putting pressure on global trade, leading to economic fragmentation and affecting regional trade, investment, and capital flows.
This meeting was held on May 4 in Milan, Italy, jointly chaired by Malaysia’s Second Finance Minister, Datuk Seri Amir Hamzah, Bank Negara Malaysia Governor Datuk Seri Abdul Rasheed, Chinese Finance Minister Lan Phoan, and Governor of the People’s Bank of China Pan Gongsheng.
Participants included the Director of the ASEAN+3 Macroeconomic Research Office (AMRO), President of the Asian Development Bank (ADB), Deputy Secretary-General of the ASEAN Secretariat, and Deputy Managing Director of the International Monetary Fund (IMF).
The AFMGM+3 joint statement pointed out that the recent outlook might also be affected by other external risks, including tightening global financial conditions, slower growth of major trading partners, and reduced investment flows.
“We call for strengthening regional unity and cooperation to address the growing uncertainties. Our current policy focus is on enhancing long-term resilience while maintaining flexibility to address short-term challenges, including the rise of protectionism and global financial environment volatility.
“In fiscal terms, this means the need to rebuild policy buffers while continuing to provide targeted support to sustain growth and drive structural reform. We will prudently adjust monetary policy based on our respective domestic situations.
“We will maintain exchange rate flexibility to cushion external shocks. Importantly, in recent years, our export markets and sources of growth have become increasingly diversified, with domestic demand and intra-regional trade becoming primary growth drivers.”
The statement emphasizes that in the context of increasing uncertainty and long-term structural changes, they reaffirm their commitment to upholding multilateralism and supporting a rules-based multilateral trading system with the World Trade Organization at its core, characterized by non-discrimination, freedom, fairness, openness, inclusivity, equality, and transparency.
“We will enhance macroeconomic policy dialogue, promote regional financial cooperation, and ensure the stability and smooth operation of industries and supply chains to jointly maintain regional economic and financial stability.
“We fully support the robust implementation of the Regional Comprehensive Economic Partnership (RCEP).”
The statement mentioned that they urge international organizations to defend multilateralism, promote free trade, and analyze and monitor the potential impacts of trade tensions on the global economy, while assisting member countries by providing policy recommendations to counter possible negative shocks.
“We will promote intra-regional trade and investment flows to enhance the region's resilience to external shocks, address existing and new challenges, and support sustainable and equitable economic development.”
“Given the interconnectivity of our financial markets, we are closely monitoring the regional financial market conditions.”
The statement said the meeting reaffirmed the determination and commitment to ensuring the resilience of the financial system and markets amidst uncertainty, while maintaining open communication among member countries in rapidly evolving circumstances.
This meeting was held on May 4 in Milan, Italy, jointly chaired by Malaysia’s Second Finance Minister, Datuk Seri Amir Hamzah, Bank Negara Malaysia Governor Datuk Seri Abdul Rasheed, Chinese Finance Minister Lan Phoan, and Governor of the People’s Bank of China Pan Gongsheng.
Participants included the Director of the ASEAN+3 Macroeconomic Research Office (AMRO), President of the Asian Development Bank (ADB), Deputy Secretary-General of the ASEAN Secretariat, and Deputy Managing Director of the International Monetary Fund (IMF).
The AFMGM+3 joint statement pointed out that the recent outlook might also be affected by other external risks, including tightening global financial conditions, slower growth of major trading partners, and reduced investment flows.
“We call for strengthening regional unity and cooperation to address the growing uncertainties. Our current policy focus is on enhancing long-term resilience while maintaining flexibility to address short-term challenges, including the rise of protectionism and global financial environment volatility.
“In fiscal terms, this means the need to rebuild policy buffers while continuing to provide targeted support to sustain growth and drive structural reform. We will prudently adjust monetary policy based on our respective domestic situations.
“We will maintain exchange rate flexibility to cushion external shocks. Importantly, in recent years, our export markets and sources of growth have become increasingly diversified, with domestic demand and intra-regional trade becoming primary growth drivers.”
The statement emphasizes that in the context of increasing uncertainty and long-term structural changes, they reaffirm their commitment to upholding multilateralism and supporting a rules-based multilateral trading system with the World Trade Organization at its core, characterized by non-discrimination, freedom, fairness, openness, inclusivity, equality, and transparency.
“We will enhance macroeconomic policy dialogue, promote regional financial cooperation, and ensure the stability and smooth operation of industries and supply chains to jointly maintain regional economic and financial stability.
“We fully support the robust implementation of the Regional Comprehensive Economic Partnership (RCEP).”
The statement mentioned that they urge international organizations to defend multilateralism, promote free trade, and analyze and monitor the potential impacts of trade tensions on the global economy, while assisting member countries by providing policy recommendations to counter possible negative shocks.
“We will promote intra-regional trade and investment flows to enhance the region's resilience to external shocks, address existing and new challenges, and support sustainable and equitable economic development.”
“Given the interconnectivity of our financial markets, we are closely monitoring the regional financial market conditions.”
The statement said the meeting reaffirmed the determination and commitment to ensuring the resilience of the financial system and markets amidst uncertainty, while maintaining open communication among member countries in rapidly evolving circumstances.