The Association of Southeast Asian Nations (ASEAN) yesterday held its first-ever summit with China and the six members of the Gulf Cooperation Council (GCC), with all three regions promising to deepen trilateral investment and trade against a backdrop of global economic volatility.
In his opening remarks to the summit, Malaysian Prime Minister Anwar Ibrahim expressed hopes that the summit would mark the beginning of “a new chapter in ASEAN’s journey of outward-looking engagement.”
“I am confident that ASEAN, the GCC, and China can draw upon our unique attributes and shape a future that is more connected, more resilient, and more prosperous,” he said.
Anwar pointed out that the three regions have a combined GDP of nearly $25 trillion and a market of more than 2 billion people, offering “vast opportunities to synergize our markets, deepen innovation, and promote cross-regional investment.” He added, “By strengthening collaboration in these areas, we can lay the foundation for stable, resilient, and sustainable growth.”
In his own comments, the Associated Press reported, Chinese Premier Li Qiang said that the three-way cooperation would benefit all sides, and contribute to economic development and peace in the region. He expressed China’s desire to “join ASEAN and the GCC in forging synergies that multiply.”
China already has close economic relations with ASEAN, its top trade partner, and the GCC, which supplies more than a third of its crude oil imports. However, relations between ASEAN and the GCC have more room to grow. While the GCC is ASEAN’s seventh-largest trade partner, with total trade reaching $130.7 billion in 2023, the six Gulf states accounted for only around 3.5 percent of ASEAN’s trade in 2023, compared to 20 percent for China, 12 percent for the United States, and 8 percent for the European Union.
The GCC, which includes Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates, has recently strengthened its relations with ASEAN, with which it held its first summit in Saudi Arabia in October 2023. The two regions also convened a 2nd ASEAN-GCC Summit yesterday, before China joined for the trilateral meeting.
The two summits capped five days of intensive ASEAN summitry in Kuala Lumpur, which took place against a backdrop of regional and global uncertainty linked to the United States’ sharp protectionist turn. While the meeting between ASEAN, China, and the GCC was likely planned far in advance, it is unsurprising that it focused on investment, trade, and economic integration.
The challenges posed by the U.S. tariff policy were made more explicit at the ASEAN-GCC meeting. Addressing the summit, Anwar said that a closer partnership between ASEAN and the GCC states would be key to navigating the world’s current economic challenges. He later said the two sides planned to launch talks to establish a free trade area. Kuwait’s Crown Prince Sheikh Sabah Khalid Al Sabah added that the two blocs would continue to undertake efforts to deepen cooperation and “improve our ability to face crisis.”
Southeast Asia’s export-dependent economies, which rely heavily on access to the U.S. market, are especially vulnerable to the Trump administration’s tariff policy. During Trump’s “Liberation Day” announcement in early April, ASEAN member states were hit with tariffs ranging as high as 49 percent (Cambodia), 48 percent (Laos), 46 percent (Vietnam), 36 percent (Thailand), and 32 percent (Indonesia).
As Anwar said during Monday’s 46th ASEAN Summit, the Southeast Asian bloc is seeking a summit with Trump to discuss the U.S. tariffs and Malaysian officials have called on ASEAN to take steps to increase intra-regional trade, which currently sits at just 21 percent of the bloc’s total. Several Southeast Asian governments have also opened bilateral talks with Washington in a bid to reduce the punishing tariffs.
On this front, Anwar announced yesterday that ASEAN leaders had reached an understanding that any bilateral agreements they might strike with the United States on tariffs would not harm the economies of fellow members. “The consensus rose to have some sort of understanding with ASEAN that decisions should not be at the expense of any other country,” Anwar said, according to a Reuters report. He added that “we will have to protect the turf of 650 or 660 million people.”
Yesterday’s meetings are also a sign that ASEAN will continue to seek greater trade relationships with China and other extra-regional powers. Earlier this week, Malaysia’s minister of investment, trade, and industry announced that ASEAN has concluded negotiations on upgrades to the ASEAN Trade in Goods Agreement, which was signed in 2010, and the China-ASEAN Free Trade Area, which dates back to 2002. The enhanced deals are expected to be signed in October, when ASEAN convenes its next summit.