Agile partnerships can help Asia face global challenges: Gan Kim Yong
Such 'flexible multilateralism' could involve moving ahead first with like-minded partners, while 'leaving the door open for others to join when they are ready', he said, in a speech that was streamed online.
He was speaking at the two-day 30th Nikkei International Forum on the Future of Asia, themed 'Asia's Challenge in a Turbulent World'.
As an example of flexible multilateralism, DPM Gan cited the World Trade Organization (WTO) Joint Statement Initiative (JSI) on E-commerce, with Japan, Singapore and Australia as co-conveners.
JSIs allow groups of WTO members to address specific issues, in contrast to usual WTO negotiations which require unanimity. The JSI on E-commerce now involves 91 members that account for over 90 per cent of global trade.
An attempt to incorporate the JSI into the WTO framework this February failed – but the co-conveners are continuing to pursue this, and are exploring options to implement the agreement in the meantime, said DPM Gan.
A NEWSLETTER FOR YOU
Friday, 8.30 am Asean Business
Business insights centering on South-east Asia's fast-growing economies.
Sign Up
Sign Up
New alliances can also be forged by building on existing economic groupings and plurilateral agreements, he added. 'These new alliances will facilitate effective and timely collaboration on key trade policies, and signal our commitment to a rules-based trading system.'
He noted Asean's efforts to deepen economic cooperation with the Gulf Cooperation Council – raised by Prime Minister Lawrence Wong at the Asean Summit earlier this week – including through a possible free trade agreement (FTA) between the blocs.
The Comprehensive and Progressive Agreement for Trans-Pacific Partnership is also looking at how to broaden economic partnerships with Asean and the European Union.
Fundamental challenges
This is one of the ways that Asia can meet three 'fundamental challenges' that it faces, beyond the economic fallout from US tariffs, said DPM Gan.
The first challenge is maintaining 'strategic autonomy' amid intensifying US-China contestation, with both powers seeking to influence others.
This affects many Asian countries that have deep trade and investment ties with both – but countries need to maintain autonomy and act in 'a principled and consistent way', in their own and the region's interests, said DPM Gan.
The second challenge is preserving the rules-based, multilateral trading order. This is based on predictable tariff terms, with clear and shared frameworks for non-tariff policies, including the 'most favoured nation' principle underpinning the WTO.
If members trade only on their own terms, larger economies will have more bargaining power, while smaller ones may be marginalised, said DPM Gan. 'This is why recent moves by some economies to impose and remove tariffs at will are concerning.'
The third challenge is tackling global threats such as climate change and protecting the global commons.
Given the need for urgent action, it is disconcerting that a collective commitment to climate-related treaties seems to be waning, said DPM Gan.
He warned that if the commitment to international institutions – such as the WTO, World Health Organization, International Monetary Fund and World Bank – similarly weakens, the world will be less able to tackle issues such as future pandemics or financial crises.
Integration and reform
Besides agile partnerships, Asia can face these challenges by doubling down on regional integration and reforming organisations such as the WTO, said DPM Gan.
On regional integration, Asia must enhance its trade, digital and physical connectivity and 'raise the ambition' for existing partnerships.
For instance, Asean has concluded talks to upgrade its Trade in Goods Agreement, and is working to upgrade FTAs with other partners.
As cross-border payments are a key enabler of the digital economy, some Asean countries are working with India on a real-time payment network, he noted, inviting more Asian countries to join the project.
Asia can also explore cross-border energy flows, he added.
Not only will the Asean Power Grid enable the region's low-carbon transition, it also presents opportunities for green investments, he said. He welcomed financing support from the World Bank and Asian Development Bank, as well as from Japan.
Finally, Asia can work with partners to reform global institutions, particularly the WTO. While imperfect, the organisation remains 'an important foundation on which to build a better global, rules-based trade architecture', he said.
Such reforms include enabling flexible agreements such as the JSI on E-Commerce to move forward within the WTO framework.
The existing consensus-based decision-making process should also be reformed to avoid gridlock, while the WTO rulebook should be updated to address issues such as state subsidies and industrial policy, and respond to the digital revolution and climate change.
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


CNA
5 hours ago
- CNA
Crucial for cooperation among Singapore, Malaysia and Indonesia: Gan Kim Yong
Trade and Industry Minister Gan Kim Yong has stressed the importance of Singapore, Malaysia and Indonesia working together. He believes that such trilateral cooperation is vital in boosting competitiveness amid current geopolitical uncertainties. Mr Gan also urged businesses to rethink supply chains and diversify markets, as US tariffs are likely here to stay. Nadirah Zaidi has more.
Business Times
12 hours ago
- Business Times
Ripe time to grow regional industrial giants, work towards Asean-led development: panellists
[SINGAPORE] In an era marked by multipolarity, supply chain disruptions, geopolitical conflicts and growing protectionism, it is a pivotal time to strive towards creating regional industrial champions and advancing Asean-led development to deepen intra-bloc integration. Such sentiments were shared by panellists on Thursday (Jul 3) at the Asean Conference, during a ministerial dialogue titled 'Asean integration in the multipolar world' with Singapore Deputy Prime Minister Gan Kim Yong. The day-long event at the Resorts World Convention Centre was organised by the Singapore Business Federation (SBF), alongside founding partners UOB, RSM Singapore and Rajah & Tann. The panel featured Malaysia Deputy Minister of Investment, Trade and Industry Liew Chin Tong and Indonesia Deputy Minister for Investment Cooperation at the Ministry of Investment and Downstream Industry Tirta Nugraha Mursitama. The hour-long session was moderated by SBF chief executive officer Kok Ping Soon, and explores how each country interprets the mandate of an integrated Asean and their plans to deliver on this. Noting that now is a difficult but interesting time for Asean, Liew posed the question: 'Do we still rely on a foreign direct investment-driven economic model or an export-led industrialisation model where we export to the US – or do we start thinking about growing Asean companies?' A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up The bloc has to start thinking about growing regional giants and creating its own technologies – with it, he said, intra-Asean cooperation, integration and trade will not be too difficult because member states will have to work with one another. On the way forward, Prof Tirta said: 'My optimistic way of thinking is that if we are internally strong as Asean… we can create the idea of not state-led development but Asean-led development.' The Indonesian minister called for stronger cooperation and communication between business and government leaders. Bilateral and regional complementarity On recent news of Vietnam's trade agreement with the US that supposedly culminated in a lower-than-promised 20 per cent levy, Kok noted that the world's largest economy is 'obviously pursuing a divide-and-conquer strategy'. On whether that weakens Asean centrality, DPM Gan, who is also the minister for trade and industry, contended that, at the end of the day, tariffs have to be negotiated bilaterally. Nonetheless, Asean member states have made a commitment to honour agreements signed with one another, so as to ensure intra-bloc trade remains rules-based, he continued. 'Even while we negotiate with the US separately and bilaterally, at the same time, at the back of our minds, we remain committed to Asean cooperation and integration,' added the Singapore minister. His sentiments were echoed by SBF chairman Teo Siong Seng, who highlighted the importance of Asean's collective response in his welcome remarks. Known in the shipping circles as SS Teo, the executive chairman of home-grown carrier Pacific International Lines, said: 'At the enterprise level, many companies initially adopted a wait-and-see stance, viewing themselves as pricetakers or downstream in the supply chain, or assuming the tariffs were just a scare tactic.' But it has become clear that action must be taken, he continued. In an environment characterised by trade realignment and uncertainty around capital flows brought about by a shift in US trade policy, Teo noted: 'Asean's collective response will be crucial (and) we are already seeing our community step up.' UOB deputy chairman and CEO Wee Ee Cheong highlighted in his opening address the opportunities from the rapidly expanding digital economy and new investments in climate and sustainability. Artificial intelligence and environmental, social and governance factors are now central to government and business trends, added Wee, who urged small and medium-sized enterprises to adapt their business models to compete and thrive. 'Let us all work together to build (an) inclusive Asean, where every business – big or small – has a stake in our shared success,' he said. Deepening cooperation The conference also saw UOB ink five memorandums of understanding (MOU) with government agencies and leading industry players across Asean and China. The agreement between the lender and Enterprise Singapore saw both parties pledging to encourage partnerships between local enterprises and foreign companies seeking to expand in the region. A second deal with the Federation of Malaysian Manufacturing and Singapore Manufacturing Federation was aimed at facilitating business opportunities in the region. The third pact was between UOB Hong Kong and the Hong Kong Trade Development Council, and is aimed at establishing a framework of cooperation to strengthen regional ties and promote sustainable growth The fourth agreement was signed by UOB China and ZGC International. It will see UOB China providing complementary financial services and empowering the cross-border development of companies in ZGC industrial parks. The final memorandum, which was between UOB, J-Will Corporation and Hildrics Capital, is aimed at the joint development of business opportunities and supporting Japanese companies entering the Asean market. Noting that the region remains an attractive destination for businesses despite global tensions, UOB's Wee said: 'As opportunities arise from the rewiring of global supply chains, trade flows within Asean and between China and Asean are expected to increase.'
Business Times
13 hours ago
- Business Times
As end of tariff pause looms, Malaysia could ‘gain greater prominence' in trade: Maybank
[SINGAPORE] Malaysia may be poised to shine in the next phase of global trade, said analysts from Maybank Investment Banking Group. This is in light of a likely fresh wave of US-led tariffs under 'Trade War 2.0'. The overall pause on reciprocal tariffs set by US President Donald Trump will be lifted on Jul 9, with the leader broadly suggesting that he will not extend its deadline. Malaysia could become more competitive as a trading partner, said regional co-head of Maybank's macro research team, Chua Hak-Bin, on Tuesday (Jul 1). 'Outcome of the negotiations between US and key trading partners – including Malaysia – on US reciprocal tariffs as the end of the 90 days suspension approaches will be key to watch,' he added. The country's weighted average tariff rate stands at 12.6 per cent with the pause – lower than that of other regional counterparts, such as Indonesia's 16.9 per cent, the report indicated. On Wednesday, Trump announced that a new trade deal with Vietnam was reached. Exports from the South-east Asian country to the US would be tariffed at 20 per cent, while US exports to the latter would face no tariffs. Goods that were deemed to be transhipped via Vietnam to the US would also face a 40 per cent tariff. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up Maybank analysts on Thursday said that the deal appears to be rather 'one-sided', compared to the other deals with the UK and China. They also noted it has not been officially confirmed by Vietnam. 'Vietnam may see some rewards for its efforts to get its tariffs reduced substantially, but the possibility of a full reduction to zero tariff or even a 10 per cent tariff could be slim,' the analysts said. 'This is why Vietnamese dong may continue to remain on the backfoot,' they added. Malaysia versus Vietnam Due to companies increasing their imports and boosting stockpiles before the next round of tariffs come into effect – also known as 'frontloading' – exports to South-east Asian countries are increasing exponentially as firms capitalise on the 90-day pause period, said Maybank. For example, Asean electronics exports grew 31.4 per cent year on year in April, accelerating from 17.8 per cent in Q1 2025. Chua said: 'In the first trade war earlier this year, the biggest beneficiaries of shifts in supply chains were Vietnam and Malaysia.' He observed that the frontloading boost is particularly strong in Vietnam, in addition to countries such as Malaysia, Thailand and Indonesia. In June, the country's benchmark VN Index touched a three-year high, buoyed by expectations that the final tariff rate after ongoing negotiations with the US will be significantly lower than the current headline rate of 46 per cent. Vietnam's visitor arrivals also continued to spike in Q1, around 130 per cent above 2019 levels, and above 140 per cent in Q2 this year, significantly faster than its peers in the South-east Asian region. 'But for the next round, in light of its potential wider gap in reciprocal tariff rates compared to Vietnam, Malaysia may catch up and gain greater prominence,' he said. The macro research analyst said that Malaysia will also likely remain at the lower band after the US unveils the finalised reciprocal tariffs, along with Singapore, whose current tariff rate is set at 5.1 per cent. In the event reciprocal tariffs remain, with key exemptions in the areas of pharmaceuticals, semiconductors and relevant equipment, and various metals and minerals, Malaysia's weighted average tariff rate is expected to rise to 17 per cent. Other countries in such a scenario could face up to 53.3 per cent in these tariffs such as Cambodia, while Indonesia may take on a tariff rate of 34 per cent, according to Maybank's estimates. Significant rebound potential amid weak market performance However, Malaysia's market performance has not been strong. As at Jun 19, it recorded a year to date decline of 8.6 per cent in US dollar terms – the second widest loss in Asia after Thailand. The FTSE Bursa Malaysia KLCI has also only been able to recover to pre-Apr 2 levels and is still in negative territory year to date. This is primarily due to macro overhang posed by pending semiconductor and electronics sector-wide tariffs which could severely disadvantage these key export industries, said Anand Pathmakanthan, head of regional equity research at Maybank. For context, Malaysia exports over US$10 billion of semiconductors to the US or around 3.3 per cent of its total exports. But Pathmakanthan is 'overweight' on the laggard Malaysian market, and is confident that it has 'the biggest rebound potential', with clarity around sector-specific tariffs in the areas of semiconductors and electronics. 'Investors can now refocus on robust domestic macro momentum per broad investment upcycle, resilient consumer spending (amid a forecasted rate cut in the third quarter of 2025 to provide further support), and maturing policy initiatives such as fiscal reforms and the up-and-coming Johor-Singapore Special Economic Zone,' he said. Lim Sue Lin, head of research of Malaysia at Maybank, said that the Malaysian government continues to be in negotiation with the US on these reciprocal tariffs while this report was written. 'A further risk that could arise from here is the extended Middle Eastern tensions,' she said. 'Softer macro and any market weakness in the second half of 2025 would offer investors an opportunity to accumulate stocks, especially the banks, which we believe stand out as long-term winners,' she added.