Diverging trade strategies at ASEAN

Two important developments took place on the sidelines of the 28th Summit of the Association of Southeast Asian Nations (Asean) in Kuala Lumpur, Malaysia, late last month. They involved the world's two largest economies and reflected their contrasting approaches to global trade. China advanced its push for trade liberalisation and regional integration, upgrading its free trade agreement with the 11-member bloc to include areas such as supply chain connectivity and the digital and green economies. The United States, meanwhile, signed individual trade deals with four members of the grouping, though not offering them any tariff relief. Since its signing in 2010, the China-Asean Free Trade Agreement (Cafta) has greatly expanded Beijing's trade with the region, which has a collective GDP of $3.9 trillion. Bilateral trade has surged more than fivefold – from $192.5 billion in 2008 to $982 billion in 2024, according to Chinese data. Now, "Version 3.0" of Cafta seeks to expand it further, introducing nine new chapters covering areas such as the digital economy, green economy, and supply chain connectivity, according to China's commerce ministry.