ASEAN: Enhancing cooperation with the Gulf and diversifying supply chains to face repercussions of Middle East events

The day after signing the landmark Digital Economy Framework Agreement (DEFA) to facilitate cross-border e-commerce and help companies reach customers across the region, the Association of Southeast Asian Nations (ASEAN) underscored the importance of strengthening cooperation with partners, foremost among them the Gulf Cooperation Council (GCC) countries, diversifying energy, food, and pharmaceutical supply sources, bolstering supply chains, and accelerating power grid interconnection among its members to counter economic disruptions stemming from international crises, particularly the fallout from the Middle East crisis and the war in Iran, as its 49th summit commenced in Manila, the Philippines.

Philippine President Ferdinand Marcos, speaking at the opening of the 49th summit, stated that developments in the Middle East had threatened Southeast Asia’s stability and disrupted transport and energy and food supplies. He emphasized the need for regional solidarity in the face of escalating geopolitical tensions, economic uncertainty, climate change, and cross-border threats, noting that no single ASEAN member could independently possess the resources and capabilities required to address these challenges.

For his part, Malaysian Prime Minister Anwar Ibrahim called for diversifying food and pharmaceutical sources and enhancing local production capacities to reduce reliance on external suppliers, expanding intra-regional trade in fertilizers, seeds, and animal feed, and accelerating the regional power grid interconnection project. He warned that energy demand in Southeast Asia is projected to quadruple by 2060.

The association is also moving to enhance cooperation with Gulf partners. Singapore’s Deputy Prime Minister Gan Kim Yong announced that expanding economic ties with external partners, particularly the GCC, would be a priority when Singapore assumes the ASEAN chairmanship in 2027, succeeding the Philippines, alongside deepening economic integration among the 11 member states.

These developments coincide with efforts to develop joint mechanisms for fuel sharing and managing the repercussions of the war in Iran, and to strengthen the resilience of regional economies against trade and energy disruptions. Meanwhile, ASEAN member states signed the Digital Economy Framework Agreement, which establishes common rules for e-commerce, data flows, digital payments, cybersecurity, and artificial intelligence.

Projects linked to the agreement are scheduled to launch in early 2027, including payment systems, digital corporate identities, and e-commerce trade documents, aimed at facilitating cross-border transactions and expanding opportunities for businesses and consumers, despite disparities in infrastructure and regulatory readiness among member states.

On the political and security fronts, Australian Prime Minister Anthony Albanese called for enhanced defense cooperation with the Philippines and oversaw the signing of an agreement in this regard. Kuala Lumpur also proposed establishing a sustainable fund to combat transboundary haze and promoting scientific cooperation to address pollution caused by forest and land fires, particularly in Indonesia.

Regarding Myanmar, ASEAN leaders decided to maintain restrictions on the participation of its leadership until tangible progress is made in implementing the five-point peace plan, adopting a gradual approach based on “calibrated engagement,” with the possibility of restoring full political representation if sustainable progress is achieved.

The summit, hosted by the Philippines in its capacity as the current ASEAN chair, features delegations representing member states and dialogue and development partners. International delegations, including those from the United States, China, and Russia, will also participate in side events associated with the summit.

US President Donald Trump is scheduled to arrive in Manila tomorrow, where he will hold meetings with the leaders of Japan, Australia, and India as part of the Quad alliance, before heading to China. There, a historic summit is expected on Thursday with Chinese President Xi Jinping and Russian President Vladimir Putin, addressing international issues including Iran, nuclear disarmament, and the war in Ukraine.