Kuala lumpur: The upgraded ASEAN Trade in Goods Agreement (ATIGA) is poised to accelerate Southeast Asia's development as a self-reliant and unified economic force, enabling the region to navigate challenges posed by global economic superpowers, according to Juwai IQI global chief economist Shan Saeed.
According to BERNAMA News Agency, Shan Saeed emphasized that the enhanced agreement would strengthen ASEAN's economy by deepening tariff and non-tariff harmonization, reducing regulatory fragmentation, aligning standards, and tightening rules of origin to safeguard regional value-chain integrity. He described the expanded free trade agreement as a strategic opportunity for ASEAN members to anchor the region centrally for a prosperous future.
Saeed highlighted that ASEAN is entering a pivotal era of integration, not just as a group of individual economies but as a unified growth engine. The region is preparing to ratify the upgraded ATIGA at the upcoming 47th ASEAN Summit. ASEAN has already liberalized approximately 98 percent of tariff lines under previous ATIGA schedules, leaving less than 0.6 percent of lines with import duties in Malaysia.
The economist noted that the agreement aims to foster seamless customs and digital trade infrastructure through the ASEAN Customs Transit System (ACTS). This upgrade would enhance the efficiency and transparency of cross-border shipments among member states. Saeed also mentioned that the agreement could expand the participation of small and medium enterprises (SMEs) in the value chain, particularly in less integrated ASEAN states.
Over time, Saeed expects intra-ASEAN trade, which currently constitutes 20-22 percent of total trade flows, to grow more rapidly. The new protocols are designed to reduce compliance burdens and provide access to supply-chain roles, transforming ASEAN into a cohesive single production and consumption network, particularly in green growth, electronics, and food systems sectors.
The upgraded ATIGA aims to make ASEAN more self-reliant and less vulnerable to external pressures amid the US-China rivalry. Saeed pointed out that under ATIGA, member states can present a unified trade framework, enhancing their bargaining power with external powers. This agreement allows ASEAN to engage with both China and the US more balanced, reducing the risk of being drawn entirely into one bloc's influence.
Saeed explained that as China expands its free trade agreement (FTA) 3.0, ASEAN's internal cohesion ensures it can set terms on its supply-chain integration rather than becoming a passive participant. With global economic challenges, the ATIGA upgrade strengthens internal buffers and provides a stabilizing backstop through stronger intra-ASEAN trade.
Malaysia is expected to benefit significantly from the ATIGA upgrade, given its trade depth and connectivity. ASEAN is Malaysia's largest trading partner, accounting for a substantial share of its exports and imports in early 2024. Malaysia's role as a global hub for semiconductor and electronics manufacturing is poised to deepen integration with other ASEAN countries under the improved rules of origin and supply flows.
Under Malaysia's ASEAN chairmanship, the country is expected to drive initiatives such as the ASEAN Digital Economy Framework (DEFA) and the upgraded ATIGA. Malaysia has publicly supported the ATIGA upgrade as a crucial tool to enhance trade, reduce friction, and uplift various sectors, including SMEs. As ASEAN's trade architecture strengthens, Malaysia's role as a consensus broker and regional anchor will increase its geopolitical influence.
ASEAN member states are set to sign the upgraded ATIGA at the 47th ASEAN Summit, scheduled from Oct 26-28. Prime Minister Datuk Seri Anwar Ibrahim will chair the summit, with Malaysia's ASEAN chairmanship theme in 2025 being 'Inclusivity and Sustainability.' Preparatory meetings with senior officials will begin on Oct 23, followed by ministerial-level discussions leading up to the summit.