Fresh Ideas for New Trade Agenda

I shared my view at the Indo-Pacific Economic Forum – Singapore 2024 organised by French premier economics institution Le Cercle des économistes.

The theme of the conference was “Indo-Pacific: shaping a new global balance” whereas my session was themed “the Indo-Pacific’s role in value chain reconfiguration.”

I spoke about the need to acknowledge that the free trade agenda of the hyper-globalisation era of the 1990s up to around Covid-19 in 2020 is no longer appealing nor practical.

The world has experienced a devastating pandemic, financial upheavals from crises to inequality and its consequences on the fabric of societies, geopolitical tensions and rivalries as well as two wars – Ukraine and Gaza – in our midst, and a massive climate crisis.

All these will mean that the trade agenda needs fresh thinking. Trade shouldn’t be about racing to the bottom to compete with each other. Countries should complement each other as much as possible. In the case of Southeast Asia, the shift away from China’s supply chain creates a once-in-a-generation opportunity for lots of new activities and new investments into Southeast Asia’s manufacturing sector.

To harness the opportunity, Southeast Asian states should work together even closer. Once Malaysian businesses move up the hierarchy, we will not compete with Vietnam, Thailand or Indonesia. By aiming to position ourselves at a middle-to-higher level, Malaysia would be able to move up the value chain while working in a collaborative manner with our more populous neighbors.

This means we will set the new standards and approaches to make Malaysia stand out.

A form of vertical integration is taking shape for semiconductors in Southeast Asia with Singapore occupying the top in terms of complexity, Malaysia in the middle and Vietnam at the bottom. The same form of vertical integration can be extended to other industries.

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