As Malaysia’s 2025 ASEAN chairmanship draws to a close, the country can hold its head high and showcase its achievements during its term, which include launching several initiatives, promoting regional integration, strengthening cooperation with dialogue partners, and consolidating ASEAN’s economic pillars.
Among these, the 18 Priority Economic Deliverables (PEDs) led by Malaysia are aimed at deepening integration, promoting trade and investment, and accelerating digital connectivity, thereby linking the region’s economy more closely together and fully unlocking the business potential of nearly 680 million people.
The PEDs will also promote sustainable development, reflecting ASEAN’s simultaneous pursuit of growth and environmental protection.
These issues will become key topics at next week’s 47th ASEAN Summit and related meetings, chaired by Prime Minister Datuk Seri Anwar.
During the summit, discussions will also be held with the United States, China, South Korea, Japan, India, New Zealand, Australia, the European Union, and Russia.
Senior officials’ preparatory meetings will begin on October 23, followed by ministerial meetings, then the official ASEAN Summit from October 26 to 28.
When reviewing Malaysia’s chairmanship and ASEAN’s progress to date, Investment, Trade, and Industry Minister Tengku Zafrul told Bernama that significant progress had been made under ASEAN’s economic pillar through the implementation of the 18 PEDs.
Anwar to Pass ASEAN Chairmanship to the Philippines
These initiatives will gain even greater momentum because, during the final round of this year’s regional and dialogue partner summits chaired by Anwar, regional and global leaders will ratify, agree upon, or sign milestone regional and bilateral agreements.
As Finance Minister, Anwar will pass the chairmanship to next year’s host, the Philippines, on October 28, but he vowed that Malaysia would continue to be at the forefront in addressing the challenges facing the 58-year-old ASEAN.
Before the handover, Anwar will have the honor of welcoming Timor-Leste as ASEAN’s 11th member state.
The economic pillar is the area where ASEAN has made the greatest progress, especially in enhancing intra-ASEAN and partner trade and investment, making Southeast Asia a competitive and key investment destination.
These milestone agreements cover a wide range of areas, including promoting trade, expanding new fields of economic cooperation, fostering regional digital interconnectivity, and reducing non-tariff barriers. They will provide more business opportunities for both large enterprises and micro, small, and medium enterprises (MSMEs).
This aligns with the theme of “Inclusivity and Sustainability” during Malaysia’s 2025 ASEAN Chairmanship.
Any regional initiative must take into account the 70 million MSMEs in the region, which account for between 97.2% and 99.9% of total enterprises in ASEAN countries; otherwise, focusing solely on large corporations would mean ASEAN trade growth could not fully realize its potential.
Undoubtedly, these broad-ranging PEDs are timely and necessary, especially after the United States announced new tariffs in April, to address the adverse effects of rising costs.
Anwar has not taken retaliatory action against the US President Trump’s tariff policy. Instead, he wants to emphasize the urgency of engaging in constructive dialogue with Washington to resolve tariff issues for Southeast Asian countries.
It is worth following the outcome of the ASEAN-US Summit and whether regional leaders can persuade Trump to lower tariffs to mitigate the damage and costs to the ecosystem.
Amid these challenges, ASEAN not only sees it necessary to drive PEDs forward, but also to reach agreements with major trading partners like China through the ASEAN Trade in Goods Agreement (ATIGA) and to sign the ASEAN Digital Economy Framework Agreement (DEFA), both of which will help facilitate trade.
Time for ASEAN and Others to Reduce Reliance on the United States
The message from ASEAN economies is relatively clear: reduce reliance on the US market, which has long been a primary export destination for ASEAN, and diversify towards other regions and markets.
For this purpose, the Regional Comprehensive Economic Partnership (RCEP) Summit, led by ASEAN, is critical for Asian economies seeking to expand trade to offset the impact of US tariffs.
At the upcoming summit, ASEAN and India are expected to reach a trade agreement for a more comprehensive economic partnership and may pursue similar initiatives with other dialogue partners.
The European Union is also seeking to reach bilateral free trade agreements with Malaysia and other ASEAN countries.
Tengku Zafrul pointed out that, as rule-based multilateral trade faces challenges, the signing of ATIGA and the progress on DEFA will be highlights of next week’s summit.
Malaysia is also prepared to sign a Free Trade Agreement (FTA) with South Korea during the summit, which will benefit all sectors.
The ASEAN-China Summit is also crucial for Southeast Asian economies looking to convince Beijing to open its vast market, as ASEAN’s trade deficit with China reached a staggering $190 billion in 2023.
Some analysts believe that ASEAN must request reciprocal market access from key trade partners such as China and the EU.
Dr. Nornirwandi from the Center for Media and Information Warfare Studies at MARA University of Technology pointed out as early as July that the US tariff policy should be a wake-up call for ASEAN, spurring the bloc to unite and take more decisive action to gain more access to lucrative markets.
Historic ASEAN-GCC-China Summit
Tengku Zafrul highlighted that Malaysia will announce agreements concluded in many of the 18 PEDs, including ATIGA and the ASEAN-China FTA, as well as the signing of an agreement with Gulf Cooperation Council (GCC) states—marking the first completed PED—during the ASEAN Leaders’ Meeting.
It is worth noting that Anwar chaired the historic ASEAN-China-GCC Summit in May, ushering in a new chapter of strategic cooperation and reshaping ties amid the realities of an increasingly multipolar world.
Tengku Zafrul said ASEAN is also in the final phase of reaching consensus on substantive elements of DEFA, which will lay the groundwork for building a more interconnected and inclusive regional digital economy.
He also confirmed that Malaysia and the US will sign a reciprocal trade agreement next week.
Following a recent phone call between Anwar and Trump, the US negotiation team has been in Malaysia since last week to finalize the deal.
Additionally, Malaysia will discuss sectoral tariffs with US Commerce Secretary Lutnick next week.
The outcomes of the 47th ASEAN Summit and related meetings will be critical in determining how regional economies, dialogue partners, major powers, and key nations can maximize growth and achieve shared prosperity.