KUALA LUMPUR, Nov 25 — Malaysia’s chairmanship of Asean has undoubtedly supercharged the bloc’s quest to become the world’s fourth-largest economy by 2030 with a string of landmark initiatives.

Under the Ministry of Investment, Trade and Industry’s (Miti) stewardship, the Asean Economic Community (AEC) has completed 12 Priority Economic Deliverables (PEDs) as of October 2025, with another six on track for completion by year-end. 

The PEDs are aimed at deepening regional integration, boosting trade and investment,  accelerating digital linkages, and strengthening sustainability efforts  to weave a more resilient, inclusive and future-ready Asean economy.

The significant achievements came against the challenging backdrop of hard-hitting tariffs from United States President Donald Trump on South-east Asian nations and the ongoing intense trade war between the US and China.

Here’s a quick recap of Asean’s economic gains under Malaysia’s helm:

1. Strengthening intra-Asean integration

The Asean Member States (AMS) adopted the Asean Economic Community (AEC) Strategic Plan 2026-2030 during the 46th Asean Summit in May, outlining six strategic goals, 44 objectives, and 192 strategic measures.

Contrary to the usual 10-year timeframe, the AEC Strategic Plan has a shorter cycle of five years for timely review and updates of strategic measures for regional integration.

Miti Minister Tengku Datuk Seri Zafrul Aziz has been reported saying the economic blueprint aims to increase intra-regional trade between AMS, promote Asean’s openness to extend beyond traditional trading partners and demonstrate the readiness of members to embrace reforms.

At the 47th Asean Summit, Malaysia also led efforts to deepen regional integration by signing the Second Protocol to amend the Asean Trade in Goods Agreement (ATIGA), strengthening trade facilitation, reducing non-tariff barriers and improving customs efficiency. These updates are expected to support Asean’s push to raise intra-regional trade above the current level of ~23 per cent.

The AMS also signed another two critical agreements to bolster a resilient and sustainable energy future, namely the enhanced Asean Power Grid MoU and the Asean Framework Agreement on Petroleum Security. 

These efforts reflect Malaysia’s steadfast pursuit to create an Asean-led economic future, guided by Asean centrality and solidarity, as the region tackles emerging challenges such as energy security and global supply chain shocks. 

2. Gearing up for green goals

On the sustainability front, Malaysia led AMS to endorse new clean energy targets — including raising the region’s renewable energy capacity to 45 per cent of the region’s total capacity and a 40 per cent reduction in energy intensity from 2005 levels by 2030. 

AMS also adopted the Asean Sustainable Investment Guidelines to create a more responsible and inclusive investment landscape in the region.

Separately, through the Asean Centre of Excellence for MSME in Green Transition, the bloc targets to facilitate the transition of 10,000 micro, small and medium enterprises (MSMEs) into green, sustainable business models. 

These green initiatives align Asean with global climate ambitions and are crucial to ensure the region’s economic expansion remains environmentally resilient.

3. Fortifying trade ties — through regional and bilateral agreements

Malaysia’s chairmanship also enabled Asean to expand and strengthen its inter-regional partnerships, especially through the first-ever Asean-GCC-China Summit held in May.

At the historic trilateral summit, Asean, the GCC and China agreed to explore deeper regional cooperation in areas such as capital markets, fintech, local currency and cross-border payments, and business opportunities in clean energy sectors, among others. 

Subsequently, the Asean-China Free Trade Area (ACFTA) 3.0 Upgrade Protocol was signed at last month’s summit, expanding cooperation into new areas like digital and green economies, while enhancing supply chain resilience, competition and consumer protection, and support for MSMEs.

Malaysia also utilised the global diplomacy stage to strengthen its domestic economy by clinching several crucial trade deals on the sidelines of the 47th Asean Summit.

The pacts include the highly-anticipated Malaysia-United States Agreement on Reciprocal Trade (ART) and the Malaysia-Korea Free Trade Agreement (MKFTA). 

The ART, resulting from Putrajaya’s months-long negotiations with Washington, has cemented Malaysia’s role in the US supply chain as it exempts 1,711 tariff lines (worth RM22 billion) from the 19 per cent reciprocal tariffs. 

The ART has also shielded Malaysia’s semiconductor exports to the US (worth RM56.2 billion) from the 19 per cent tariffs. It has also potentially saved over 1.1 million jobs and secured the future of some 7,000 SMEs. 

4. Shaping digital economy ambitions

The Asean Digital Economy Framework Agreement (DEFA) — the world’s first regional-wide digital economy arrangement — has also moved closer to conclusion under Malaysia’s chairmanship. 

With a mobile penetration rate of 136 per cent — one of the highest in the world — South-east Asia is already hyperconnected and digitally vibrant.

Capitalising on this potential, the DEFA aims to facilitate the seamless and secure flow of goods and services — with data security at its core — underpinned by enabling regulations, infrastructure and talent. 

With substantial conclusion reached under Malaysia’s leadership this year, the DEFA is slated to be signed next year. 

As the inclusion of Timor-Leste as Asean’s newest member completes the region’s geographical map, the DEFA will shape how the region’s nearly 680 million people can enjoy an open, secure and inclusive digital future.