Malaysia Oversight

Look before you leap into new trade bloc, economist advises Asean

By FMT in April 24, 2025 – Reading time 2 minute
Look before you leap into new trade bloc, economist advises Asean


image?url=https%3A%2F%2Fmedia.freemalaysiatoday.com%2Fwp content%2Fuploads%2F2025%2F04%2F06987dee shipping port yard resize reuters pic 220425
Economist Geoffrey Williams has shot down a proposal by his counterpart Woo Wing Thye for an East Asia buffer bloc, labelling it ‘unnecessary’. (Reuters pic)
PETALING JAYA:

An economist has cautioned Asean against rushing into a new trade bloc with Japan and , saying that US trade policy is more predictable than it appears.

Geoffrey Williams said a proposal to form an East Asia buffer bloc — comprising Asean, Japan, and — rests on weak assumptions and overlooks more practical solutions.

“The proposal assumes that Asean, and Japan share common and aligned incentives. If that were true, then they would already have close relationships that would be resilient to the US- tensions,” he told FMT Business.

In the first place, Williams said, there are trade barriers within Asean that have to be dismantled beforehand. “It took the European Union (EU) 70 years to do this, leading to the creation of a protectionist, low-growth trade bloc,” he said.

He warned that Malaysia may not have much to gain from being part of such a bloc. Instead, he added, the country risks getting itself entangled in bureaucracy that can disrupt its diversified trade strategies.

Instead, Williams said, countries should focus on removing trade barriers and supporting open markets.

“This proposal ignores the most obvious strategy, which is to move towards free trade. This increases economic growth for everyone,” he said.

Williams was commenting on a recent proposal by Penang-born US economist Woo Wing Thye to form an East Asia buffer bloc to withstand the impact of unpredictable US trade policies and growing US- tensions.

Woo said that Asean is currently too small to face global economic pressures on its own.

For the record, Asean is already party to major trade pacts such as the Regional Comprehensive Economic Partnership (RCEP) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

The US is not a part of either bloc while is party only to RCEP.

Williams also said that the 90-day pause on proposed “reciprocal” tariffs shows that the US is still open to negotiation and is not acting irrationally.

“If countries respond positively by reducing trade barriers everyone is better off. (On the other hand), if they respond negatively, the tariffs will remain, and everyone is worse off. This is perfectly predictable,” he said.

Investment, trade and industry minister Tengku Zafrul Aziz and finance minister II Amir Hazmah Azizan are scheduled to visit Washington this Thursday to discuss the administration’s decision to impose a 24% tariff on imports from Malaysia.

Williams said the country is seeking “a mutually acceptable, fair and equitable solution” both bilaterally and multilaterally.



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